An often irreverent look at some of the week's other news, including a silly Windows AntiSpyaare rumor, Apple's iPod patent flub, iPod competition from Microsoft, Dell revenues Microsoft at LinuxWorld, Vista WAIK, Xbox 360 add-ons and so much more...
I spent the past week with my family on vacation in Quebec City, Quebec, which was fantastic. Thanks again to everyone who wrote to me about Quebec City after I first mentioned the trip. We tried to visit as many of the places you recommended as possible and got what I think was a great overview of the city. Highlights of this amazing European-like city included Vieux Quebec (old Quebec), the Terrasse Dufferin and Funicular (elevator), the St. Lawrence River ferry, the views from L' Observatoire (the observatory), and the Fairmont Le Chateau Frontenac Hotel. We took a horse carriage tour of the city, and we visited a few places outside of town, including La Chute Montmorency (a gorgeous waterfall) and Valcartier Village Vacances (the largest water park in Canada). Everyone had a great time. In fact, we'd still be there if the kids were paying the bills.
I've done a lot of travel, both inside the United States and internationally, and a few things about Quebec City, specifically, and Quebec, in general, really stood out. First, Quebec is a tidy and orderly place, and it seems like parts of it are always being cleaned. The people are wonderful and friendly, in sharp contrast to what we experience here in Boston. Interestingly, there's more of a language barrier in Quebec than we experienced in Germany. Many people can speak English but typically don't. This wasn't a problem because my wife speaks French, plus whenever people claimed to speak just a little English they were actually quite fluent. The food was superb, the weather fantastic. I feel like Quebec is a secret most people don't know about. It's just hours away by car, and yet it's more European than much of Europe, if that's even possible. We'll be going back--soon, I hope.
Because I was away for an entire week, I figured Microsoft would drop an enormous news bomb on me the way the company did in July when I was on vacation in Vermont. That didn't happen, thankfully. But this time I was prepared: The hotel we stayed in (Hotel Palace Royale, which I recommend) was nicely decked out with Ethernet connections, and I brought an extra notebook computer, just in case. You just can't trust those guys at Microsoft.
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Rumor Control: Windows AntiSpyware Will Be Free
Reports inexplicably circulated on the Internet this week that Microsoft will eventually cease development of the free Windows AntiSpyware tool so that the company can instead sell a service called Windows OneCare Live. Those reports are completely bogus. Microsoft will continue to offer the unmanaged Windows AntiSpyware product for free, will update it for the foreseeable future, and will include similar technology in Windows Vista. The Windows OneCare Live service will include a managed version of the Windows AntiSpyware technology and will be available for a yearly subscription fee, probably starting early next year. Microsoft won't stop supporting or upgrading Windows AntiSpyware when Windows OneCare ships.
Is Microsoft Behind Apple Patent Misfire? Not Exactly
It was a busy week for conspiracy theorists, thanks to the news that Apple Computer was rejected--again--in its bid to acquire patents for the iPod UI. The US Patent and Trademark Office (USPTO) rejected Apple's patent application for two reasons. First, other companies (notably Creative) were selling devices with iPod-like interfaces long before Apple entered the MP3 market. Second, someone else had already registered for a patent for the same UI before Apple made its application. Here's where it gets interesting: That someone, John Platt, is a former employee of Synaptics, the company that designed the iPod's innovative scroll wheel. But Platt now works for Microsoft. So the conspiracy is obvious, right? Microsoft is trying to prevent Apple from getting a patent on the UI for its lucrative iPod. That's a cute idea, but the truth is much less exciting. If Apple had simply filed its application earlier, Platt never would have had a chance to do so. I guess procrastination isn't necessarily the best strategy.
Microsoft Promises Better iPod Competition. Pffftttt ...
Speaking of the iPod, 6 months must have passed because Microsoft is once again promising that its hardware partners are on the cusp of offering real, viable competition for Apple's seemingly ubiquitous MP3 player. Microsoft, of course, doesn't make MP3 player hardware (not yet, anyway), but the company is now working with partners such as Creative and iRiver to ensure that the next generation of PC-based MP3 players work as well as, look as good as, and integrate as well as Apple's iPods. People, let me save you a lot of time and money: It ain't gonna happen. Even if it does, Apple could simply open up the iPod to Windows Media Audio (WMA) files and PC-based online music services and accomplish two things: The iPod would then literally be perfect, and it would blow away any reason to consider any other kind of music player. Don't think Apple will take those bold steps? My guess--and it's only a guess--is that the company will do so if competition finally starts to appear. But, again, that won't happen.
Creative Loses Even More Money
If we can continue the iPod theme for just one more news item, let's take a look at poor MP3 maker Creative, which announced earlier this year that it was going to spend oodles of money to advertise its MP3 players and take back market share from the iPod. That didn't happen. The company just announced worse-than-expected quarterly results, thanks to price cuts and inventory write-downs associated with its failed bid to compete with the iPod. Creative lost $31.9 million in the quarter that ended June 30 (compared with a $6.6 million profit a year earlier) on revenues of $305.4 million. Although Creative's MP3 player shipments increased by more than 300 percent, they didn't live up to the company's expectations.
Dell Rockets to Record Revenues, but Investors Aren't Impressed
Only when we're talking about Dell could a record rise of revenues (28 percent) and a 15 percent rise in earnings be considered disappointing. But that's what happens when you're the computer juggernaut and analysts expect constant growth of more than 20 percent. Is Dell starting to mature (and, thus, slow down)? You be the judge: The company posted earnings of $1.02 billion on revenues of $13.4 billion for the quarter ending July 29. But its average revenue per product fell from $1610 a year ago to $1480. Dell blames the shortfall (ahem) on overly aggressive pricing. The company typically lures PC buyers to its Web site with promises of lowball prices, then successfully upgrades those products with lucrative memory and peripherals. This quarter, apparently, fewer consumers took the bait, with many sticking to the stock PC configurations. Dell says that it's addressing that concern. I'm a big fan of Dell's products, and I don't understand how anyone can see bad news in this quarter's results.
Microsoft Goes to LinuxWorld
Visitors to the LinuxWorld Conference & Expo in San Francisco this week were treated to all kinds of free goodies. The surprise was that some of those freebies came from Microsoft, a company not particularly well known for its free software (and, please, don't cite Microsoft Internet Explorer--IE--or any of the other applications you need to own Windows to run). Microsoft didn't offer much in the way of free beyond some simple goodies, however. Instead, the company was really trying to sell its Linux interoperability story, which, from what I can tell, isn't exactly broad or deep. "My role is not to exterminate Linux," Microsoft Director of Platform Technology Bill Hilf told attendees during a session. "It is to be very critical and objective for Microsoft, our customers, and the open-source community." Then, presumably, he'll try to exterminate Linux. That's the Borg way, after all.
WAIK Is Nice but Where Are the Promised Windows Vista Deployment Tools?
When Microsoft briefed me about Vista Beta 1 in early July, the company promised me that the beta would (finally) include the new image-based corporate deployment tools that Microsoft has been touting for more than 3 years. That wasn't the case. Last week, however, Microsoft released to testers a tool called the Windows Automated Installation Kit (WAIK), which is basically a wizard that walks IT pros through the process of creating new XML-based automated installation files for Vista. WAIK isn't quite everything the company has been promising, but it's a start. Although the WAIK beta isn't available for public download, the user guide, curiously, is.
Microsoft's Case Against Google Rests on File Found in Recycle Bin
You've probably heard about Microsoft's lawsuit in which the software giant is attempting to prevent one of the people who helped found its China-based research center, Kai-Fu Lee, from starting a similar enterprise for Google. What you might not know is that Microsoft's legal case is apparently based largely on a file the company found in the Recycle Bin of one of Lee's XP computers. The document describes terms of the hiring agreement between Google and Lee and notes that Google anticipated Microsoft's lawsuit. That's pretty hilarious because Google's public comments about this case are quite different. The company at one time noted that Lee isn't a "search expert" and therefore shouldn't be bound by the employment agreement he signed when he originally joined Microsoft. So if he isn't a search expert, why would Google believe that Microsoft would attempt to block his hiring, based on the fact that the employment agreement prevented him from seeking a job at a direct competitor of Microsoft? More important, why wasn't Lee smart enough not to load Google documents on his Microsoft work PC and not delete them properly? He must not be a PC expert, either.
Amazon Considers Online Music Service
Online retailer Amazon revealed this week that it's looking into starting an online music service to rival entries from Apple and a wide field of pretenders no one much cares about. Amazon recently held talks with record company executives about its plans, which would include per-song downloads and a subscription service. If it happens, the company will likely launch the service in late 2005, just in the time for the lucrative holiday selling season. I guess the big question is whether an established player such as Amazon can make a dent in Apple's sales. I'd point to Wal-Mart's lame digital music service as evidence to the contrary.
Microsoft Lowers the Boom on Xbox 360 Peripheral Makers
Companies that are interested in making controllers and other add-on peripherals for the Xbox 360 will need to pony up some extra cash to do so. Microsoft is requiring all companies that want to milk Xbox 360's expected success to sign a license in which they agree to pay the software giant a commission on each peripheral sale. So is this really a problem? Will it result in fewer or more expensive Xbox 360 peripherals? I'm not sure that Microsoft's requirement is all that onerous, frankly. It's a good thing if the company uses the licensing scheme to ensure that only high-quality products appear--as Nintendo has done for ages with its video games. Besides, Microsoft would understandably want to profit from its Xbox product line for a change. The last time I looked, buying an Xbox was like getting a check for $100 from Microsoft. The company isn't exactly making money on the current-generation Xbox.