Short Takes: January 17, 2014

Short Takes: January 17, 2014

An often irreverent look at this week's other news

An often irreverent look at this week's other news...

Latest Microsoft CEO Rumor: Ericsson CEO Hans Vestberg

Another week, another rumor for the Microsoft CEO position: Bloomberg reports this week that Microsoft's board of directors is considering Ericsson CEO Hans Vestberg as a possible successor to Steve Ballmer. "We never comment on rumors and speculation," an Ericsson spokesperson said, clearly confirming the rumor.

Wake Up, World: An Android-Based Microsoft Phone Makes Absolutely No Sense

As I reported last year, Nokia was working on a prototype for an Android-based replacement for its Asha line of entry-level smartphones before Microsoft finally decided to buy the firm's devices and services businesses. But after a series of leaks of these phones that will never happen, some bloggers and tech enthusiasts are suddenly calling on Microsoft to keep the dream alive and actually produce these phones. Folks, that isn't just dumb, it's contrary to everything Microsoft is trying to achieve. And more to the point, Windows Phone works even better on these low-end devices than would Android, so why would Microsoft want to use another company's OS and then have to reproduce special versions of every one of its already-created Windows Phone apps? The answer: It wouldn't. And it won't. And let's get back to reality.

Microsoft Confirms Its Email Was Hacked by the Syrian Electronic Army

No real surprise here, but in the wake of reports that Microsoft blogs and social networking accounts had been hacked by the Syrian Electronic Army, the company has confirmed that employee email accounts had also been hacked. We sort of knew this because the SEA had published some excerpts from some of those messages, but now we have the official word. "A social engineering cyber-attack method known as phishing resulted in a small number of Microsoft employee social media and email accounts being impacted," a Microsoft statement notes. "These accounts were reset, and no customer information was compromised. We continue to take a number of actions to protect our employees and accounts against this industrywide issue." I suppose this simply confirms what we've known all along about computer security: When it comes to keeping electronic systems secure, human beings are indeed the weakest link.

Using Intel as a Bellweather for the PC Industry

Intel released its quarterly earnings last night, and with the PC industry swooning and analysts wondering whether they've hit rock bottom, it's only natural that we might try to parse those earnings a bit more closely than usual. It wasn't horrible: Intel announced net income of $2.6 billion on revenues of $13.8 billion, up 2.6 percent. And full-year net income was $9.6 billion (up 6.4 percent, year-over-year) on revenues of $52.7 billion, with the firm generating about $21 billion in cash over the course of 2013. But ... (and yes, there's always a "but") ... Intel says that revenues will be flat in 2014. Revenues in its PC chip business were flat in Q4, but here's a shocker: Unit sales were actually up 3 percent overall in the quarter. Both of these indicators are more positive than the PC unit sales drops claimed by IDC and Gartner. And server chip revenues were up 8 percent, better than expected, though that was due mostly to cloud computing purchases, not servers aimed at individual businesses. So what's the key takeaway? More questions than answers, really, and I guess the overall view, put simply, is "mixed."

Xbox One Was the Best-Selling Video Game Console in the United States in December

According to the market researchers at NPD, the Xbox One was the best-selling video game console in December, with Microsoft selling 908,000 units. Xbox 360 was number three, with 643,000 units, so we can assume the PlayStation 4 was number two, though Sony would need to provide the sales number for that console. (NPD releases these figures to the hardware makers, not the public.) Taken together, Xbox One and Xbox 360 controlled 46 percent of console sales in the United States in the month, a gain of 10 percent over December 2012. Which, when you think about it, isn't all that much, since December 2012 was the last holiday month for the previous-generation console and there wasn't much going on. And here's why: Sales of video game titles, overall, actually fell 17 percent year-over-year in December, an astonishing problem given that two major new consoles had just launched. (That said, overall hardware sales did rise 28 percent, which makes sense.) And here's another little tidbit: The top-selling video game hardware overall in December wasn't the Xbox One, it was Nintendo's 3DS handheld gaming device.

Xbox Exec Says He Left Microsoft Because of the Reorg

I figured it was only a matter of time before the people on the wrong side of Microsoft's sweeping reorganization started publicly complaining about why they left (or were forced out of) the company. And here's the first: Last week, Xbox multimedia executive Blair Westlake suddenly announced his departure from Microsoft, and this week he actually explained why. "Over the last few months, Microsoft has been undergoing a large-scale reorganization," he told Variety. "It has become clear to me that the organization is moving in a direction that does not fit either my expertise or my skill sets." Westlake was at Microsoft for 10 years, but it's unclear what his expertise and skill sets are. Variety claims he played a role in getting Xbox to focus on entertainment, not games, and that has certainly paid off. But I'm curious how the reorg could have impacted that direction. I sort of doubt that it did.

Apple Fails in Its First Major Chinese Offensive

Apple announced a deal to sell its expensive iPhone smartphones through China Mobile, the world's largest wireless carrier, with great fanfare in December. But someone should have told the Chinese what was expected of them: There were no lines at stores, Apple or otherwise, anywhere in the country when the phones went on sale this week. And at the gala event at the Apple Store in Beijing, where Apple CEO Tim Cook actually showed up to hand out the first phone, only 12 people were waiting. Apple, which was once expected to sell between 10 million and an infinite number of iPhones in China, is suddenly being demure about its sales in that country. Or, if I could complete a quote the New York Times reported: "An Apple spokeswoman, Carolyn Wu, said the company did not plan to report first-day sales figures" ... anymore.

Nintendo Sinks Into Irrelevance in the Video Game Console Market

And now the flip side. Nintendo might be seeing continued success with its handheld video game systems, but the firm this week took the unexpected step of confirming that its Wii U console is a flop. In an earnings announcement in which Nintendo described its third straight annual operating loss, it also slashed its Wii U sales forecast by ... wait for it ... an incredible 70 percent. It now expects to sell just 2.8 million units for the entire fiscal year ending in March, a figure that is lower than the first month of sales for the Xbox One or PlayStation 4. (And even the best-selling 3DS isn't doing as well as expected; Nintendo cut its forecast for that from 18 million units to 13.5 million.) "We failed to reach our target for hardware sales during the year-end, when revenues are the highest," Nintendo President Satoru Iwata said in a prepared statement. The firm says it has no major shakeups coming in the short term, meaning of course that it does. Apparently in the cards, finally, is a move to get its valuable game properties on other mobile devices, like smartphones and tablets. "Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business," Iwata said. "It's not as simple as enabling Mario to move on a smartphone." Actually, yes it is.

Apple and Samsung Dominate the US Market for Smartphones

Apple might be a distant number two and falling in the worldwide market for smartphones, but things look quite different in the firm's home market. According to NPD, Apple's iPhone is used by 42 percent of smartphone owners in the United States, up from 35 percent a year ago. (And to be clear, this NPD study measures usage, not market share or unit sales.) Samsung is number two with 26 percent usage, up from 22 percent a year ago. The rest of the market is split between Motorola Mobility, HTC, and BlackBerry, all of which saw usage drops, and other players. I pinged NPD about this study, and the firm confirmed that it doesn't measure Windows Phone usage since it requires a native app of some kind and they don't supply one for Windows Phone. But I think it's fair to say that Windows Phone usage in the United States is painfully small, in the low single digits.

Again I Ask, What Is the Point of Yahoo!?

A few weeks back, I asked a semi-rhetorical but serious question: What exactly is Yahoo!? Seriously, why does this company even exist? Who are its customers, and why do they care about this company, and what products and services do they actually use? I don't get it. I still don't get it. But now I can see the mainstream press is finally catching on to the real story. After a month of back-slapping CEO Marissa Mayer and calling out her fashion sense or whatever, it finally occurred to someone over at the New York Times that she hasn't actually turned the company around. In "Bumps on a Road to Revival for Yahoo," the news agency finally admits that "turning around Yahoo! would be far more difficult than has sometimes been suggested by the media attention she has received." Thank you. Now, could someone please explain what it even means to "turn around" Yahoo!? Turn it into what?

But Wait, There's More

Don't forget to follow me on Twitter and the Paul Thurrott's SuperSite for Windows. And check out my free ebooks, Paul Thurrott’s Windows Phone 8, Paul Thurrott’s Xbox Music, and the currently in-progress "Windows 8.1 Book," which I'm now writing—and publishing as we go—with Rafael Rivera.

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