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WinInfo Short Takes: Week of November 4

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

Microsoft Ruling: My Prediction
OK, I know it's a mistake to do this, but here's what I think is going to happen today when Judge Colleen Kollar-Kotelly issues her dual rulings in the Microsoft antitrust case. First, Kollar-Kotelly should reject the US Department of Justice (DOJ)/Microsoft proposed settlement because it is most definitely not in the best interests of consumers, and suggest changes that make the agreement have more bite. Then, the judge should accept most, but not all, of the more stringent remedies requested by the non-settling states. Specifically, the judge should accept a states' request that Microsoft be forced to provide customers with a modular Windows version in which components such as IE, Windows Media Player, and Windows Messenger can be removed for good, and not just hidden. It's just the right thing to do. Will any of this happen? Stay tuned. Today is the day.

Microsoft Foe Described as "Obsessive"
The timing of Judge Kollar-Kotelly's ruling is interesting, coming as it does just days before elections in which many of the attorneys general that backed further remedies in the Microsoft suit are coming up for reelection. In one such case, Martha Dean, the Republican candidate for Attorney General of Connecticut is demanding that her rival, incumbent Attorney General Richard Blumenthal, give up his "obsessive" legal pursuit o the software giant. "Mr. Blumenthal's bold attempt to grab Microsoft's source code shows just how extreme his position is," Dean said this week. "Note to Mr. Blumenthal: Here in America, we do not allow our tax dollars to be used to take by force the intellectual property of one successful business and give it to its competitors." Yikes. Note to Mrs. Dean: Here in America we also don't allow a company to illegally gain a monopoly which it can then use to crush competition. Or maybe you're just not familiar with the ruling against Microsoft in its sweeping antitrust case.
Reactions to the Office 11 Support Issue
I was rather surprised by the reactions readers had to the story about Microsoft dropping support for Windows 9x (and NT 4.0, though I had forgotten to mention that) in its upcoming Office 11. But it was a happy surprise: Though I didn't mention it in my story, I do feel that Microsoft is justified in jettisoned the aging and obsolete Win9x technology; after all, you must move ahead eventually, and certainly those customers will be well served by Office 2000 and XP going forward (On a related note, I find it hard to believe that anyone still using a 5 year old operating system would be interested in the latest and great office productivity suite). Sure, there were a few grumbles out there, but most people actually supported Microsoft's decision. Well, I do too. The sooner we drop Win9x, the better.

Next Week: Tablet PC Launch
Is it hot or not? With the Windows XP Tablet PC Edition launch bearing down on us like a freight train, publications technical and otherwise are weighing in with their opinions of the new OS and the exciting new hardware that takes advantage of it. Some, like WIRED, think Tablet PCs are the second coming ("Its Rocks," they write breathlessly), while others aren't so sure. The respected Charles Cooper writes in a article that Tablet PCs are just a work in progress. So where do I sit in this debate? Right on the fence, of course. I don't think Tablet PCs are going to be important, per se, until their unique features are available in all portable PCs. Same thing for Windows XP Media Center Edition: There shouldn't be Media Center PCs. Instead, all home computers should be Media Center PCs.

Microsoft Investors: No Dividends for You!
One of the hot financial issues that has been beaten to death this year is Microsoft's refusal to issue stock dividends to its investors. Instead, the company has racked up an unprecedented amount of on-hand cash--almost $41 billion at last count--that Microsoft says it will use for long-term investments, purchases, and other uses. However, some investors logically argue that the money should be shared with the people who own the company, and not horded like a medieval treasure trove. Microsoft CFO John Connors said again this week, however, that dividends are not happening. First, the company faces numerous potential lawsuits in the wake of its federal antitrust case, some of which could cost the company billions of dollars. Also, the European case against the company could result in a large fine. Microsoft's case horde is thus an admission of sorts that it's going to be paying out a lot of money to its foes in the near future. Where do I get in line for that handout?

Windows Movie Maker 2: Give it a Chance
A lot of people unfairly criticized the Windows Movie Maker (WMM) version that appeared in Windows XP last year as being underpowered and over-simplified, but I always felt it was good at what it did (video capture and simple editing) and I actually used it a lot. But if you're among the crowd that shudders when you hear the words "Windows Movie Maker," suck it up and give WMM 2 a chance. The new version is surprisingly powerful and full-featured, and I suspect it's going to win some converts. More importantly, it finally removes that one last reason to even consider a Macintosh: Not only is WMM 2 more full-featured than Apple iMovie, it's also easier to use. Check it out (Windows XP users only need apply, of course). I suspect you'll be pleasantly surprised.

Handheld Market Shrinks, and takes Pocket PC with It
According to a Dataquest report issued this week, the market for handheld computing devices shrank 2 percent in the third quarter when compared to the same period a year earlier. More alarming for the Pocket PC camp is news that devices based on the Microsoft OS lost ground as well. Palm OS maker Palm Inc. saw its market share rise, year over year, from 28.8 percent to 30.6 percent. But the big winner was Sony, now the number two handheld maker, whose share of the market rocketed from 3.5 percent of the market last year to 13 percent this year (the company owns almost 20 percent of the US market). Third place HP, maker of the popular iPaq, lost ground, falling from 12.1 percent to 11.5 percent. But it could be worse. The big loser, Handspring, saw its share drop from 22.5 percent in 2001 to 6.6 percent today. How will all this shake out? Consumer acceptance of Palm and Sony's new multimedia-oriented devices seems to have halted the Palm OS' slide, but a new generation of Pocket PCs--due next Spring--and a slew of new Pocket PC licensees might keep things see-sawing for a while yet. Stay tuned.

Windows Media 9 Sees Its Name Up in Lights
Microsoft's Windows Media 9 Series technologies will be used to digitally project a series of 8 movies in 25 cities around the United States beginning next week. Microsoft is presenting the movie series in partnership with Digital Cinema Solutions (DCS), BMW, and a variety of independent movie studios, and will begin with a documentary called "Standing in the Shadows of Motown." Unlike the expensive digital projection equipment required by state-of-the-art movies such as "Attack of the Clones," the Microsoft movie series will be presented using low-cost PC-based systems that cost only $70,000. The goal, here, I believe, is to show that Windows Media 9 is ready for prime-time, even in the most demanding environments. If what I've seen is any indication, Microsoft has a hit on its hands.

Dell Selling Apple iPods
In the oddest pairing since Arnold Schwarzenegger and Tom Arnold, PC giant Dell Computer has begun selling Apple Computer's iPod in its online store. "Dell is selling the iPod, and we are delighted to offer iPods for Windows," a Dell spokesperson admitted. "The iPod has been a big success to date, and we'd like to make it even bigger." And for its part, Apple spokepeople reported added, "But we still hate Dell."

Charles Schwab: Apple a Loser
Speaking of Apple Computer, the company was given an "F" rating under the new equity ratings at Charles Schwab, sending the company's rabid fans into a tizzy this week. However, Charles Schwab senior vice-president Greg Forsythe explained that the company's rating had more to do with real-world financial concerns than religion. "People certainly are emotionally linked to Apple," Forsythe told Business Week recently. "However, emotions are the enemy of the objective investor. Per our analysis, Apple is pretty unattractive across the board. It's still selling at an above-average multiple of earnings and cash flow. Management is issuing shares (as opposed to buying them back), which we don't like to see. And short-sellers are selling more and more of Apple short. Its fundamentals aren't great either, when you look at free cash flow growth and free cash flow return on investment. Its earnings quality is very poor. We come to this conclusion by looking at the difference between operating cash flow and reported net income. There is some management discretion as to how you report your net income, but in the long run, operating cash flow and net income must converge. If net income is much higher than operating cash flow, the tendency is for net income to fall back in line. Apple looks particularly poor on that measure." Yikes.

Study: Mac OS Among Least Prone to Attack. Paul: It's Also Least Prone to be Used
And in the interests of not letting a dead dog lie, another interesting Apple story has me shaking my head. In a report from IDG News Services titled "Mac OS Among Least Prone to Attack," we discover that Apple's latest OS offering, OS X, was among the computer operating systems least prone to attack and damage from malicious hackers, worms and viruses in 2002, while Windows, naturally, got all the attention. When you consider that about 70 million people are using just Windows XP right now, compared to about 3 million for Mac OS X, the irrelevance of this story becomes obvious. Repeat after me: You can lie with statistics. You can lie with statistics.

Microsoft Evidence to be Destroyed
Three million pages of evidence used in the Caldera antitrust case against Microsoft is set to be destroyed soon because Caldera is tired of storing it and the company was unable to find anyone interested in taking it off of their hands. The documents are stored in 937 boxes, and they contain controversial internal Microsoft documents that describe the illegal tactics the software giant used in the late 1980's and early 1990's to destroy DR-DOS, the one-time MS-DOS competitor now owned by Caldera. Microsoft and Caldera settled the suit in early 2000, four years after it was first launched. Hey guys, if you need some storage space, I have room in my garage.

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