The PC market is not dying but morphing into something new. The latest quarterly figures from research firm IDC show that traditional PC shipments fell 8% year-on-year to 81.6m units in the third quarter (actually better than expectations). But the predictions of a few years ago that nearly all connectivity and computing would move to smartphones have not materialized. Perhaps the first tablets could be called stretched smartphones, but the large-sized ones are taking on more of the characteristics of a notebook, and hybrid form factors are on the rise. In other words, the PC is being reworked in a modern always-on, web-centric, low power format with new user interfaces featuring touch, voice and gesture. Many variations will be tried out in the market as the vendors jostle for position in the post-PC market, but as the Chromebooks, ultrabooks and convertibles show, the norms of the PC will die far more slowly than the narrowly defined form factor itself.
While a wide choice of hardware designs, all cloud-connected and mobile, is good for consumers, many will miss the certainties of the first PC age, with its uniformity around a well-known operating system and user interface. That may have been stifling for the ecosystem, but it made life simple for users and allowed them to buy products from different vendors, and run the same applications and user experience. In the post-PC era, many operating systems are fighting for attention, and there is intense and sometimes confusing innovation in the UI.
Much of this needs to be hidden from the customer to ensure acceptance of new form factors ‘ hence the push by the major platforms to create multiscreen user experiences which span all their devices from phones to TVs to tablets/notebooks, thus establishing themselves as the familiar friend in every area of digital life. Others argue that, in a web-centric world where everything increasingly happens in the cloud and the browser, the old notion of an OS is outdated and the browser provides the commonality for the user ‘ this underpins the bid by Mozilla Firefox OS, Google Chrome OS and others to expand the functionality and power of their browsers and position themselves for the expected shift from apps and downloads towards web services, cloud storage and the return of the ‘thin client’.
The big question, of course, is where is Microsoft in all this? The company that defined and unified the PC user experience signally failed to turn its old OS into a multiscreen, mobile or touch-based platform when it needed to do that ‘ ie before Apple came on the scene with iOS. It is only really ticking some of those boxes now, but far too late. Windows Phone is a very credible mobile platform and a refreshing alternative to the norms of Android and iOS, but has so far scarcely dented their market share. Windows RT shares many of its characteristics but was confusingly positioned and carried the burden of Microsoft’s own fumbled launch into post-PC hardware with Surface. Windows 8 remains very strong on the Wintel PC, but this is a declining category and the remaining Intel-based Windows flavor has so far struggled to expand very much into new form factors (although the slimline ultrabook, by itself, is an important weapon in slowing the decline of the PC).
This, then, is another critical holiday season for Microsoft, in which key decisions and actions will help answer the question of the Redmond giant’s role in the post-PC world from 2014 on. Last holiday period was similarly vital, and revealed some important elements of the Microsoft strategy, including the move to become an integrated devices and services provider with Surface, and the increasing convergence of the various Windows variants. So far, though, these have been poorly executed, so the pressure is on Steve Ballmer to do better this year and depart his post with a positive legacy on the mobile side. He may be leaving over the next few months, but the current ‘One Microsoft’vision – which focuses heavily on the ‘devices and services’ business as well as the happier territory of enterprise and cloud ‘ is all his, and it will be better for his successor to be able to build on that, rather than have to start his or her tenure by dragging the firm through yet another refocusing effort.
In his final annual letter to shareholders, published this week, Ballmer built on last year’s key theme, that Microsoft would evolve from being a software company to one driven by devices and services which are fully complementary. This year, he expanded that mission statement, writing that the key objective for 2014 onwards would be “to create a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most’. This really means that the company must step back from concentrating too hard just on the end user device and OS, but must instead provide the entire end-to-end technology stack, from cloud to enterprise to consumer, that underpins the new ways of working. In particular, Microsoft must provide the back end services and the software glue to deliver common functionality and experience to cloud-connected users whatever screen they are using, and whether they are engaged in work or leisure activities.
There are all kinds of conflicts in this all-encompassing aim. Of course a firm of Microsoft’s scale needs to find a way to make itself indispensable as its enterprises struggle with cloud services and BYOD, and consumers start to access all their key functions through the browser. But does the company want to accomplish this by being the back end enabler, competing with the cloud giants like Amazon, or by providing the multi-device end user experience, Apple-style, via an integrated device and OS? BlackBerry’s recent history has shown that providing both elements is no longer easy, because users are resisting attempts to tie the back end enterprise or web services with particular device platforms. Power in the cloud means being device agnostic, but how does that fit with an ambition to be the leading mobile device?
Of course, Google has these dilemmas too, as it tries to balance its various power bases ‘ the cloud, Android, Chrome ‘ as well as, like Microsoft, dealing with the conflicts of interest inherent in controlling its own mobile platform, and going so far as to buy a handset maker, while also trying to license its OS widely. Microsoft will have to deal with those once the Nokia purchase is complete, but for now, tensions with OEMs which make up a minor part of the Windows Phone base are less critical than how the company will harness ownership of the Nokia products to support its wider device platform strategy.
Because, whether its next CEO places the emphasis more on the cloud or on the devices/services push, they will still have to work with the fact of Windows, an operating system which has been tweaked and bullied into being adequate for the modern world of web and touch and constant connectivity, but which remains, in many respects, a thorn in its owner’s side. Many of Microsoft’s strongest assets, like its still-huge Office base and its Azure platform, would be better still if completely divorced from Windows ‘ there was far more excitement about recent promises of Office for the iPad than there was about the ways Microsoft planned to optimize the applications on the next Surfaces. And if it still has to control its own device platform, rather than relying on OS-neutral services, it needs to deliver on some of the half-forgotten pledges to put Xbox ‘ its only real success in the integrated device/OS/content field ‘ at the heart of the experience.
It remains to be seen whether Xbox integration will be accelerated again, because much remains uncertain about how Microsoft will deliver the multiscreen experience it has discussed, and what it will look like. The big change since the Surface launch is, of course, the agreement for Microsoft to buy Nokia’s device business. Even before the deal closes, the devices to be unveiled at Nokia World on October 22 are likely to betray hints of the Microsoft strategy. They are expected to include Nokia’s first larger-screened devices since its famous Communicator, including its first tablet and possibly even a notebook. That would reinforce its future parent’s bid to provide a single platform across different device types, even while the logic of keeping the two ARM-based OSs, WP8 and RT, separate will look increasingly flawed.
Ballmer insists Microsoft is on the way to ‘One Windows’, but also that innovations like fully touch-based Office will come to the iPad around the same time it gets to Windows. The CEO, speaking at the Gartner ITXpo event this week, said his firm was working on a ‘common user interface, common programming interface, common security architecture and user interface adaptability and common developer model and key services’. He added: “We grew up as a company by dividing things into smaller manageable problems. The number one thing we’re hearing from customers is that we want you to put it together’ and make the Windows platform fully heterogeneous. “We need to build a common operating system as well as a common back end based on what the device knows about you,” he said, referring again to the dual goal of driving the devices and the back end platforms that support them.
Related to that, there are reports that the upcoming new release of Windows Phone, codenamed ‘Blue’, will be the first to run on larger screens, up to 10-inches. Microsoft has talked about the potential it sees in ‘phablets’, a form factor it currently does not address, but which will be supported by an interim WP8 update, called GDR3, soon. This will run on devices with 5-inch or 6-inch displays. But if Blue, due in spring 2014, addresses even larger screens, it will create further confusion with WRT. That strongly suggests that WP Blue will actually be a major stepping stone to convergence of W8, WRT and Windows Phone, with closer alignment around the NT core, the APIs and the user interface. One report said that WP8 currently has 33% API unity with WRT and Blue will increase that to about 77%. That would allow a single app to run on both ARM-based platforms, thanks to universal binaries, allowing for a single Windows Store.
Work at the device end is intensifying of course, and we should not underestimate the efforts to turn Windows into a multiscreen platform for the fully web-focused future. Clues were seen in the recent ‘Surface 2.0’ updates, which saw systems which were far more tuned-up for services rather than the Microsoft software itself. The aim is to make the Surface what its name suggests – just a surface, where both local Windows or Xbox, and cloud services are rendered. It functions as one of Microsoft’s ‘three screens plus cloud’, and the next step will be to turn the PC, phone and TV into ‘surfaces’ too. However, the Surface is increasingly being equipped to function as any of the screens too, and probably to penetrate the car in future too.
By buying Nokia, Microsoft is acquiring hardware expertise which it can fully direct, he argued, but insisted that licensing of the Windows platforms would continue too. “We’re pushing through with hardware innovation and we’re also licensing. We see a world that’s heterogeneous with Windows and things that are easier if we push forward with integration,’ he said. Ballmer also promised that the current fragmentation of the Windows device design philosophy would be addressed. This has partly resulted from the fact that Windows Phone has been dominated by Nokia, while Windows RT has been led by Microsoft itself. That will change once the two companies are merged, together with their hardware/software design and possibly their entire operating systems. Microsoft’s control over the design guidelines for all Windows variant is far tighter than Google’s in Android, and often a source of contention with OEMs. However, it is set to get even firmer as the company aims for a high quality user experience which is uniform across all products. Ballmer even suggested that Microsoft would gain a single ‘design czar’, like Jonathan Ive at Apple or Sergey Brin at Google, to help unify its approach.
Microsoft may have taken a giant step back from any strategy that involves defocusing on the beloved Windows ‘ a migration to full OS neutrality actually looked more likely two years ago than now ‘ but its painful experience in the handset world will have taught it that it can no longer dream of being the unchallenged, or even the dominant, OS force again. Its services will need to support other platforms, and its operating system will have to share breathing space with whichever Linux-based variants achieve critical mass. Android is obviously one of those, though its ability to adapt to the full range of post-PC and media devices, and to a cloud-based environment, can be questioned. If it remains largely a handset OS, Google has Chrome OS ready to fill in the gap, and while it denies the two will converge, they are now the responsibility of the same executive, and are starting to be increasingly interoperable. For instance, Android now runs the Chrome browser instead of its own offering, and in the latest beta release, web apps can be installed directly to the homescreen, open up in full-screen mode and appear alongside native apps in the multitasking app switcher ‘ in other words, looking and behaving like native apps. The approach is similar to the desktop version of Chrome and the Chrome OS, both of which can run web-based apps independently of and outside of the browser, while maintaining security. Such features not only indicate increasing convergence of the user experience of Google’s two offerings, but of the web and native worlds overall, easing the shift to the cloud and presenting new problems for companies which have not fully ‘got’ the web-centric platform yet, including Microsoft itself and Apple.
Then there are many other Linux challengers also aiming to take advantage of the inferior cloud credentials of the two desktop OS giants (see inset). A few of these will become important, with the keenest eyes on Ubuntu because of its proven strength in the enterprise and PC worlds, and its entirely web-centric and virtualized roadmap, which differentiates it from the crop of mobile-oriented candidates and fits in with emerging trends in usage. Its claims were endorsed by the PC leader, Hewlett-Packard, at a recent financial analyst meeting, where Dion Weisler, EVP of printing and personal systems, talked about the change from a world where HP followed the ‘Wintel playbook’ to one where it was often competing with Microsoft, and where it needed to support several platforms. In fact, it has selected Windows, Android, Chrome and Ubuntu as its four main OSs for PCs and post-PC devices, but has been notably cool to WRT. Weisler believes the two Google systems, between them, represent a $46bn opportunity now, with 1% growth rates, far higher than Windows. The PC space, which HP leads, is currently worth about $170bn but is in decline. “The market is changing more today than it has in the past 30 odd years I’ve been in the industry,” Weisler said. ‘In the past, if you had the Wintel playback and played by the Wintel playbook you could pretty much predict your results. You just needed to run a little faster than the other guy. But we’re in a new world now with multiple operating systems, new architectures, new silicon, new graphics, new subsystems.’ He added: “In China there are more tablets sold than in the United States. Guess what? Most of those are not on the Windows operating system.’
Windows may not just need to coexist with these platforms within an enterprise or applications base, but actually on the same device. Multi-OS products have been enabled by new virtualization tools and by increased memory and resource on mobile gadgets, but they are still fairly rare. However, users are starting to warm to the idea of running two OSs, each optimized for a different purpose (work and personal perhaps, or one for heavy duty processing tasks and another for battery-friendly, connected web services. Like most of the supposedly new ideas of the post-PC era, this harks back to the original thin client concept and particularly to its last incarnation, the netbook).
Microsoft apparently has its eye on the dual-OS potential as a way to increase the reach of ARM-based Windows without having to knock Android out completely. It has reportedly suggested to OEMs, notably the faithful HTC, that they could install Windows Phone on Android devices for little or no licensing fee. This would promote WP8 from its usual position on second tier devices to the flagship products like HTC One, and might tempt users who would not abandon Android to try Windows Phone for certain apps or tasks.
It seems like a long shot, but most upstart post-PC operating systems will need to encourage the slow trend to multiplatform usage, in order to get a foothold and work around the critical weakness of a low apps base. The world may be shifting towards the cloud, but most consumers will cling to their favourite downloads and apps for a very long time, and will not easily drop the OS that supports them. Keeping their Android apps while gaining a range of new facilities via a second OS ‘ access to a web application store like Mozilla’s perhaps, or transferring to a simplified, battery-preserving mode for always-on processes like social networking ‘ is likely to be a better bet, provided the complexities of dual-OS are hidden from the end user.
Indeed, Samsung is said to be readying a 12-inch Galaxy Tab which would dual-boot Windows RT and Android. According to various credible bloggers, Microsoft’s overtures to OEMs to install ARM-based Windows alongside Android have not been confined to handsets. It has also approached Samsung and Huawei to consider WRT/Android tablets and the Korean company has started developing such an offering.
The company may not, at least as long as Ballmer remains in place, make a full break with Windows and its ‘fat’ native OS heritage, but it is sacrificing many of its principles to try to adapt to the cloud-based post-PC environment. Coexisting happily with other operating systems, even as a junior partner, is one, as is a shift away from a single, carefully controlled hardware/software platform to a flexible system which can support multiple screens at the user end and massive cloud services at the back.
Nokia kills Symbian and MeeGo early:
Nokia has told developers that it will kill support for its legacy operating systems, Symbian and MeeGo apps, two years early. The sale of its handset business to Microsoft has killed the last vestiges of the myth that Symbian would have a long death and would continue to power new devices in the low end market for many years, giving Windows Phone time to build up share. Indeed, this was one of the key strategic errors which should exclude CEO Stephen Elop from the running for the top job at Microsoft, to which he returns after the sale is complete.
Developers of apps for Symbian and MeeGo ‘ the shortlived collaboration between Intel and Nokia, which merged their respective Moblin and Maemo Linux-based OSs ‘ will not be able to submit new apps or update old ones from January 1 2014. Previously, support was due to be offered until 2016 via a contract with Accenture but the Symbian base is shrinking rapidly and there was only ever one commercial MeeGo device, the N9. Symbian’s last hurrah was the high profile 808 PureView, but its headline-grabbing 41-megapixel camera technology has now been migrated to Windows Phone, in the new Lumia 1020.
Nokia’s other important device family, the Asha ‘smart featurephone’ range, runs its low end Series 40 OS, whose future under Microsoft must be uncertain, but which underpins much of the Finnish firm’s surviving market position, especially in emerging economies.
Nokia’s email to developers read: “If you have Symbian and MeeGo content in the Nokia Store, it will continue to be available for download to customers, and you will continue to receive download and revenue reports as well as payouts for downloaded content.’
MeeGo does live in various projects ‘ as part of the Samsung-driven Tizen open source platform which combines MeeGo with another failed mobile Linux contender, LiMO; and as the basis of Finnish start-up Jolla’s Sailfish mobile OS.
Firefox OS gets ready for the real battle ahead:
Next year will see a battle by the new web-oriented mobile operating systems to expand their interesting experimental platforms into mainstream devices capable of making a dent in Android. Mozilla has updated its Firefox OS, seeking to steal a march on Canonical Jolla, Jolla Sailfish and others but, while it has scored important wins for midmarket, operator-branded handsets, particularly at Telefonica, it still needs to convert its on-paper OEM supporters into commercial launches.
Release 1.1 of Firefox OS adds some significant new features such as push notifications, MMS and browser downloads. The upgrade will come to existing handsets soon and will be installed on new ones.
While announcing the changes, Mozilla also gave some updates on the international roll-out of its platform, which began in the summer in Spain, Colombia and Venezuela via Telefonica, and with Deutsche Telekom in Poland.
These two carriers remain central to achieving greater scale for Firefox OS during the holiday season. Launches are planned in October or November in Telefonica’s territories in Brazil, Mexico, Peru and Uruguay, and in Deutsche Telekom’s German homeland (with Hungary and Greece also said to be coming onstream ‘soon’). Telenor will also join the Firefox party this fall, launching co-branded handsets in two of its eastern European markets, Hungary and Serbia & Montenegro.
The 2013 launch schedule revolves around two Firefox OS smartphones, both aimed at the mass market and first-time smartphone buyers. Both come from Chinese vendors and are priced around $85. The first to launch was the Alcatel One Touch Fire and that was followed by the ZTE Open.
Of course, the challenge for any new platform ‘ as Microsoft well knows ‘ is not just to get support from big-name device makers, but to be deployed on some of their top tier designs, the ones that receive the biggest marketing budgets. To be more than an interesting minority option for users who are particularly keen on the web-based apps and browser-centered user model of Firefox, the new OS needs to sign up more well-known OEMs and find its way onto a few flagship devices. Huawei, Sony and LG have all pledged support for the platform, but none has announced a firm plan for an actual device yet.
The push for Firefox OS will come from operators, particularly those seeking to have more control of the user experience in the second wave of smartphone adoption than they managed in the first. While Google and Apple have defined the experience ‘ and grasped most of the revenues ‘ at the high end of mobile devices, the smartphone market is now shifting towards emerging economies and lower-budget users, giving carriers another chance to shape the sector in their own image. Some, like Telefonica, clearly see an open, cloud-oriented and customizable OS as a powerful weapon to do this, and to dilute the power of Android and iOS. They, in turn, may put pressure on handset makers, all desperate for some crumbs of additional share and differentiation against the Samsung juggernaut, to come up with the devices.
Firefox OS is gradually improving its core functions, such as calendar and address book. For instance, it can now import contacts from Gmail and Hotmail, not just the SIM card and Facebook, as previously; and supports calendar alerts. Strangely, considering the OS was spawned by a browser, it only now gains the ability to support browser downloads and it has also added download of email attachments. Adaptive app search, which the OS claims as a key differentiator, is now prominent on the homescreen and there is a new music search facility.