WinInfo Short Takes, October 29, 2010

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

PDC10: Emphasis on Web, Cloud, and Mobile

At its Professional Developers Conference 2010 (PDC10), held this week on its Redmond campus, Microsoft doesn't have a major new platform to push on developers—well, at least not one it hadn't previously announced. Instead, the software giant is focusing very specifically on recently released (or recently announced) platforms that Microsoft believes are key to its ongoing success. These include Internet Explorer (IE) 9, which embraces hardware-accelerated HTML 5 and a blurring of the lines between traditional Windows applications and web apps; the company's numerous cloud services, but especially the dramatically powerful Windows Azure platform; and of course, Windows Phone 7, which has both raised the bar for what's possible on the go and redefined the way consumers can use these suddenly pervasive devices. If you're familiar with how PDCs used to work, this might be somewhat surprising. But in the wake of so much bad news about Microsoft, this PDC and this week's earning announcements sort of put things in perspective. The company is actually doing a lot of things right.

PDC10: Microsoft Demos Amazon Kindle App for Windows Phone

The highlight of PDC10 for me, so far, has been a demo of Amazon's upcoming Kindle app for Windows Phone 7. Although Microsoft had previously revealed that the app would ship by the end of 2010, this week was the first public look at the app, which is shaping up to be the nicest Kindle app experience yet. (Amazon ships Kindle apps for the iPhone, iPad, Android, and BlackBerry already, as well as for the PC, Mac, and web.) Unique to the Windows Phone version of the app are the Metro-style UI, which is gorgeous, and a "suggestion" feature that lets you send book suggestions to friends from within the app using Windows Phone's normal sharing interface. The Windows Phone version also surfaces personalized book suggestions to the app's start screen. I can't wait to snag it; the Kindle is the superior eBook platform by far, and part of its appeal is the pervasiveness of its clients.

Microsoft Earnings Toss Aside Apple Worries

Although someone should at least point out that Apple and Microsoft are no longer the same kinds of companies at all, the comparisons are inevitable. But with Apple posting revenues of about $20 billion in its most recent quarter and Microsoft posting "just" $16 billion, some have decided that this comparison is what they'll use to spin the news. There are other ways, of course. Microsoft's operating income was $7.12 billion (up 59 percent) and its net income was $5.41 billion; Apple earned "just" $4.3 billion. This isn't an anomaly; Microsoft routinely outperforms Apple when it comes to profits, though Apple is quite fond of pointing out what seem to be quite heady gross margins. Microsoft's earnings were also dramatically higher than Wall Street analysts' estimates—all the more remarkable because Microsoft doesn't conservatively "guide" these estimates like Apple does (underreporting what it expects so that its results look even better). So, Wall Street expected Microsoft to earn 55 cents per share, but it really earned 62 cents per share—a huge difference—and unlike with Apple, not an artificial one. Naturally, Apple fans will react to this news the way they always do, with Monday Morning Quarterback syndrome. "Well, of course Microsoft's margins are higher," they'll claim. "After all, software is so much cheaper to make than hardware." Is it now? Someone should look into how much these companies spend, respectively, on research and development. I'll ruin the surprise: It's not even close. And one more thing: Although two-thirds of Apple's revenues come from products that didn't recently exist, Microsoft's revenues come largely from long-time product lines. There are two ways to spin that one, too: Apple is either correctly seeing market changes before they happen (the established view), or maybe the company is just admitting that its previous approach—taking on the entire PC industry—was an utter failure. Apple has to move into new markets, whereas Microsoft's continued success in its traditional markets can help it migrate to new revenue models—cloud computing, especially, but also mobile and entertainment—at a more steady clip, one that won't rock the boat for its voluminous number of enterprise customers. There are 1.4 billion PCs in the world. According to Apple, fewer than 50 million of them are Macs. Do the math.

Apple Jumps Past RIM, Is 4th Largest Mobile Phone Maker Worldwide

According to IDC, Apple surpassed Research in Motion (RIM) in the most recent quarter to become the world's fourth-largest maker of mobile phones. Number one on the list, of course, is Nokia, with 32 percent market share and flat sales, year over year. At number two is Samsung (21 percent, up 19 percent), while LG Electronics (8 percent, down 10 percent), Apple (4 percent, up a crazy 91 percent), and RIM (3.6 percent, up 46 percent) round out the top five. Apple's strong gains here mirror its gains in the PC market in a way, with its year-over-year increases possible because of a relatively small starting point. (Even RIM jumped a huge amount year over year.) Total mobile phone sales were 340 million units in the quarter (compared with about that many for the full year for PCs)

This Week, on the Windows Weekly Podcast

Leo and I recorded a new episode of the Windows Weekly podcast on Thursday, as usual. It should be available by the weekend on the Zune Marketplace, in iTunes, and wherever else quality podcasts are found, in both audio and video formats. Next week's podcast, if all goes well, will be recorded live from Microsoft's PDC.

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