re: Microsoft Office, Server Sales Fuel Strong Earnings
Thanks for reading, jabberwolf.
Apple's actually an interesting case. IDC pegged Mac sales as down, whereas Gartner said Apple actually increased sales in the US market. Cupertino took the unusual step of slashing prices on the 13-inch Retina MacBook Pro, which suggests sales aren't where the company wants them-- but it also looks like Apple is outperforming the Windows-centric parts of the PC market. Apple also enjoys favorable margins on its computing products, somewhat insulating its Mac offerings from declining hardware sales. Throw in the fact that Apple's overall revenue is less tethered to OS X than Microsoft and its OEM partners' respective earnings are to Windows and you have a pretty solid outlook for Apple. Can it stave off Android? No, probably not, but if Apple really sells 75 million iPhones in developing markets once the rumored low-cost model hits, Cupertino could be sitting pretty.
As for the one device idea-- I think a lot of people would like one device that can do almost everything, but form factors (e.g. screen size, ease-of-use with legacy keyboard-and-mouse applications) still get in the way of a true "one-size fits all" solution. The first round of Windows 8 devices were too compromised to live up to this ideal, but If Windows Blue brings some unity to the two side of the OS, Microsoft could make up some ground. Even so, many people will require more than one device simply because no one has found a way to make one form factor that adequately addresses all major use cases.
Also, while some people would value an all-in-one device, there's also evidence that consumers actually prefer the mutli-screen experience. Microsoft would still be wise to cram as much functionality into its tablets as it can, if for no other reason than to carve out an identity that offers value not found in iOS or Android. But it also needs a range of devices, from cheap (hopefully sub-$300) tablets to powerful Utralbooks and Surface models to giant 30-inch tablet/monitor hybrids designed to be communal household devices. I think a single form factor could come to be the most popular option but the market will nonetheless demand a variety of options, and, as the Forrester analysts predict, perhaps different versions of Windows tailored for each one. I see a lot of people continuing to haul around tablets and smartphones for certain use cases while turning to more traditional devices for others. Success will involve not only compromise-minimizing hybrid tablets but also software that embraces a multi-screen lifestyle, seamlessly moving online experiences from one device to the next.
A lot of this is reading into tea leaves, but one thing is clear: Windows 8 adoption is stagnant right now, meaning Microsoft faces two particularly important and foreseeable tests: 1) Windows Blue and the upcoming Intel chips (both Haswell and Bay Trail) need to deliver not only meaningful improvements but also branding differentiation that consumers care about; 2) As Windows 7 migrations concludes and businesses, probably between 2014 and 2016, start buying new computing products, Microsoft needs to find a way to both serve its install base while also making inroads with consumers. I think June should be a big month for Microsoft, with both the BUILD conference for developers and its TechEd conference in New Orleans. I've been told Redmond's evolving corporate strategy will be an emphasis in New Orleans, and BUILD seems like it has to be all about Windows Blue. So we'll have a better idea soon.
Michael Endler, IW Associate Editor