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July 19, 2002—In this issue:
1. SHORT TAKES
- Microsoft Earnings Stronger Than Expected
- Apple Earnings: Not So Bad
- Apple vs. Microsoft, Part Deux
- But What About Adobe?
- Microsoft Removes Java from Its Web Site
- MSN 8 to Emulate Hotmail Strategy
- Jobs: Apple to Consider Intel Chips After OS X Transition Is Finished
- Dude, You Just Got an Email from Bill Gates!
- Xbox Sales Hit 3.9 Million
- Liberty Alliance: We're Not Anti-Microsoft
- OK, PC Sales are Down Again, But Recovery Is on the Way. No, Seriously.
2. ANNOUNCEMENTS
- Enter the Windows & .NET Magazine/Transcender Sweepstakes
- Real-World Tips and Solutions Here For You
3. CONTACT US
- See this section for a list of ways to contact us.
1. SHORT TAKES
(An irreverent look at some of the week's other stories, contributed by Paul Thurrott, [email protected])
Microsoft beat its lowered-earnings expectations by pulling in $1.53 billion on revenues of $7.25 billion for the quarter ending June 30; these results are a dramatic improvement over the paltry $65 million the company earned in the same quarter a year ago. Microsoft credited strong sales of Windows XP, Office XP, and the Xbox game console for the results and predicted modest financial gains over the next year. This quarter is the first to be affected by Microsoft's recent Securities and Exchange Commission (SEC) settlement, in which the agency charged the company with massaging the books to present a more controlled picture of its growth. The results of any bookkeeping changes were imperceptible, however. Microsoft also noted that software sales rose 9 percent year-over-year; enterprise sales were up 4 percent.
The night before Steve Jobs' MacWorld keynote address in New York this week, Apple Computer released its quarterly results—a 50 percent drop in profits from the same quarter last year. The company posted a net profit of $32 million on revenues of $1.43 billion. Frankly, given the economy and the state of the PC industry, these numbers aren't too bad, although they sent the company's stock tumbling. Apple shipped 808,000 Macs in the quarter, down only 2 percent from a year ago.
You might recall the little flap earlier this week when Microsoft Mac Business Unit (MacBU) Chief Kevin Browne complained that Apple didn't do enough to push Mac OS X, thereby dooming sales of Office v. X, which Microsoft designed solely for Mac OS X and which has sold poorly. Browne elaborated on the charges a few days later, after a little "did-not, did-too" action between Apple and Microsoft executives. "We are concerned that Apple is simply assuming their existing customers will move to OS X," Browne wrote in an email to MacWorld magazine. "We have empirical and anecdotal data that up to half of current Mac users just don't know what to think of \[OS\] X. There is investment required. We have concerns about the long-term because Apple has not focused on moving the Mac installed base to Mac OS X ... Since OS X was introduced, Apple has spent 20 \[times\] more \[money\] advertising iPods than advertising OS X. They have a great product in OS X, but changing operating systems is a big undertaking for customers. It involves directs costs for hardware and software upgrades; you have to learn the new interface, etc. We would like to see Apple do a better job of explaining the benefits of OS X, so more people will feel the investment is worthwhile." Although I've always believed that converting Windows users is the key to Apple's growth, I can't help but agree with Browne on this one: If Apple's existing user base doesn't adopt OS X first, the game's over.
During my coverage of the Microsoft-Apple flap, a few Mac aficionados complained that I included information about developers such as Corel who agreed with Microsoft but that I neglected to mention that Adobe actually experienced a small growth in OS X-based software sales. For those of you who aren't familiar with the situation, Adobe is Apple's closest partner and routinely optimizes its software for the Mac and the Mac's unique hardware components. This arrangement lets Apple use Adobe products in Windows-Mac face-offs, where the Mac, inexplicably, seems to win time after time. But saying that Adobe supports Apple is like saying that the Pope supports God: obviously. The truth, however, is that even Adobe can't do anything to help Apple. Although Adobe shipped the first OS X-compliant version of PhotoShop this past quarter, sales of Apple's "pro" machines—the top-of-the-line PowerMac systems that run PhotoShop—fell dramatically. Furthermore, a little disclaimer from Adobe CEO Bruce Chizen, who noted that Adobe's "experience may not be representative, since Adobe customers tend to be early adopters of technology \[anyway\]," made Adobe's backing of Apple even more spurious. Funny that the complainers didn't think to mention that quote in their arguments, eh?
Microsoft recently removed its Java software from its Web site, causing conspiracy theorists to fire up their keyboards yet again. But Microsoft removed the software in anticipation of Windows XP Service Pack 1 (SP1), which will include the software. The problem is that Sun Microsystems claims that Microsoft doesn't have the right to distribute Java online because of the Sun-Microsoft Java settlement. Microsoft disagrees, but rather than face yet another court battle, the company decided to simply remove the software and distribute it solely in SP1. If Sun wants to force Microsoft to include Java in Windows, why would the company complain that Microsoft was offering the software, for free, to Windows customers on its Web site? This continuing rift makes my head spin.
If you're curious about Microsoft's decision to start charging non-MSN users for using MSN 8 (formerly MSN Explorer), consider that the strategy obviously follows the successful Hotmail model. First, you give customers a wide range of functionality for free, and then you start switching those features to be part of a subscription-only service. MSN 8 is to MSN Explorer as Hotmail Extra Storage is to Hotmail, methinks, and the situation is only going to get worse unless, of course, you want to join the MSN family. And that, my friends, is exactly what Microsoft wants. Welcome home, guys.
Apple CEO Steve Jobs said this week that his company will consider moving to Intel chips, but that he'll wait until at least 2003 because the transition to Mac OS X is more important. But the speed of Power PC hardware is increasingly falling behind Intel's chips (the Pentium 4 will hit 3GHz this year), so Apple would be wise to do a bit of research. I recommend AMD's upcoming 64-bit Opteron, which will give Apple a technological leg up on Windows and, perhaps, offer Windows compatibility through the Opteron's full compatibility with 32-bit x86 code. Come on, Apple: Do the right thing.
In an effort to appear more human, Chairman and Chief Software Architect Bill Gates and CEO Steve Ballmer will issue occasional email newsletters to Microsoft's customers, discussing technology and the company's public policy. Gates and Ballmer recently mailed the first such email, and it's a real fireside chat, let me tell you. In it, Gates discusses Trustworthy Computing (naturally) and how Microsoft hopes to make people forget about the thousands of security problems the company's software has foisted on them during the past year alone. You know, I've often said that the proof is in the pudding: We'll judge you on your deeds, not your words, Mr. Gates. Now get back to work making better software. We'll be sure to rally around you when the hack attacks stop working.
Despite constant news stories reporting that the Xbox is a sales disaster, the truth is that it's selling well, especially in the United States. As part of its quarterly earnings report, the company said that it sold 3.9 million Xbox consoles through the end of June 2002, right on target with its reduced expectations of 3.5 to 4 million sales. Originally, Microsoft had expected to sell 4.5 to 6 million units, but the Xbox has fared poorly in Europe and the Far East.
The Liberty Alliance issued specifications for its single sign-on (SSO) technology early this week, then immediately had to fend off criticism that the organization is anti-Microsoft. Not so, says the Alliance. Indeed, the Alliance would welcome Microsoft with open arms if the company would just accept the fact that Microsoft Passport isn't the answer to Internet identity management and that interoperability is key. "Microsoft, with its depth of experience in developing the \[Microsoft\] .NET Framework, would be a welcome addition to the Liberty Alliance membership," an Alliance representative recently wrote. "However, their resources and expertise are not essential in delivering future technical specifications. With more than 65 members, the Liberty Alliance already has the necessary expertise to deliver open, platform-agnostic specifications for federated network identity."
PC sales declined for the fifth straight quarter, but the International Data Corporation (IDC) and Dataquest both maintain that the industry will recover this year. PC shipments have finally evened out, apparently, and will even rise slightly for the remainder of the year, the firms say; IDC predicts 4.3 percent growth in 2002 and 11 percent in 2003. However, among the top PC vendors, only Dell saw year-over-year shipment growth, and its results are somewhat amazing. Dell shipped 4.6 million units in the last quarter alone, up 15.5 percent from last year. Most of the top PC vendors experienced shortfalls of 4 percent to 16 percent in the same time period.
2. ANNOUNCEMENTS
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2. ANNOUNCEMENTS
(brought to you by Windows & .NET Magazine and its partners)
Nothing can help you prepare for certification like Transcender products, and no one can help you master your job like Windows & .NET Magazine. Enter our combined sweepstakes contest, and you could win a Transcender Deluxe MCSE Core Pak (a $569 value) or one of several other great prizes. Sign up today!
http://www.winnetmag.com/sub.cfm?code=swei202fus
Windows & .NET Magazine LIVE!'s full-conference schedule is now online. Don't miss this chance to network with the finest gathering of Windows gurus on the planet. This conference is chock full of "been there, done that" knowledge from people who use Microsoft products in the real world. Register now and access concurrently run XML Web Services Connections for FREE.
http://events.pentontech.com/windows/register.asp
3. CONTACT US
Here's how to reach us with your comments and questions:
- ABOUT NEWS AND VIEWS — [email protected]
- ABOUT THE NEWSLETTER IN GENERAL — [email protected]
(please mention the newsletter name in the subject line)
- TECHNICAL QUESTIONS — http://www.winnetmag.net/forums
- PRODUCT NEWS — [email protected]
- QUESTIONS ABOUT YOUR WININFO DAILY UPDATE SUBSCRIPTION?
Customer Support — [email protected]
- WANT TO SPONSOR WININFO DAILY UPDATE?
[email protected]
This daily email newsletter is brought to you by Windows & .NET Magazine, the leading publication for Windows professionals who want to learn more and perform better. Subscribe today.
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