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Microsoft's Consumer & Phone Strategy Stuffed Says Expert

By David Richards and Wire Services | Monday | 14/12/2009

A leading consumer electronics analyst has predicted what SmartHouse has been saying for two years: Microsoft is fast becoming a consumer market "basket case". He also claims that inside Microsoft it is now a case of "dog-eat-dog" among executives.

Mark Anderson, author of the Strategic News Service newsletter and an influential technology observer, claims that Microsoft is "losing it" in the consumer and phone markets.

Back in 2007 and shortly after the launch of Windows Vista, SmartHouse raised concerns that Microsoft was not investing in the consumer market.

We also said that Australians were deliberately being denied access to basic Microsoft consumer services such as the Zune MP3 player, an electronic program guide (EPG)  for its media centre offering, a music and content store and access to media centre automation applications. All are services and products that are available to Microsoft customers in the USA and Europe.

Microsoft also refused to take up an offer from IceTV to deliver a local EPG service in Australia. It also refused to work with local developers such as Switch Automation, which has developed a Windows-based home automation system that is now sold by Clipsal. 

In Australia, Jeff Putt, the man in charge of Windows, has for three years said, "Watch this space. We have big plans". Despite these boasts, nothing has happened.

In his annual Top 10 list of technology predictions, Anderson proclaims that in 2010 it will be "game over" for Microsoft in the consumer space.

Anderson believes that Microsoft's vision of integrating front-end platforms with a strong back-end platform "isn't resonating". "Consumers want application stores and content they want integration," he said.

Analysts are also claiming that Microsoft has already lost the smartphone market with its Windows Mobile OS falling out of favour with consumers who are turning to the iPhone, Google Android and offerings from Research In Motion with its BlackBerry.  

Anderson believes that Microsoft's failure in the mobile category will further alienate consumers from the software company's ecosystem.


He says Windows 7, "ironically, by failure of imagination and by its PC-centric platform, actively clears space for others to take over the OS via mobile platforms."

Microsoft, which started out its life as a consumer developer-focused company, switched strategies and became a largely enterprise-focused vendor. Now it is desperately trying to gain back lost ground in the consumer market, says Anderson.

Anderson, whose word carries a lot of weight with corporate execs (including those from Microsoft), venture capitalists and other movers and shakers, held his annual predictions dinner in New York City on December 10. Here are some of the things he predicted.

2010 will be The year of Operating System Wars: Windows 7 flavours, Mac OS, Linux flavours, Symbian, Android, Chrome OS, and Nokia Maemo 5.

All content will go mobile.  Everything gets tagged, multi-channeled, and the walled gardens open up.  TV and movie content, particularly, break free of old trapped business models. We are moving toward watching first-run TV and movies on phones, for a price.

MobileApps and Mobile Content drive Micropayments, which move from niche to mainstream payment models. Payment for content will split along age lines, at around 35; above, pay; below, don't pay.

The Phone vs. the PC: A Split Along Two Paths (enterprise vs. consumer). Note: The phone is now the most interesting computer platform, and it is driving innovation: software, business models, distribution. Netbooks are next up as drivers.

A huge chasm opens in computing, between Consumer and Enterprise (government/business), with Apple, Google and most Asian hardware companies in Consumer, and Dell, IBM, Cisco, and MS on the Enterprise side. HP will straddle both. Before 2010, talk was all about unifying consumer and enterprise. Now, talk will be about their split.

ZDNet reports that Anderson's contention that Microsoft has no hope of redeeming itself in the mobile market is one that a growing number of company watchers share.

Anderson also predicted that Ray Ozzie, Microsoft's Chief Software Architect, will leave Microsoft sometime in the "relative near-term".

He said that Ozzie hasn't found it easy fitting in culturally in Microsoft's dog-eat-dog culture.

Anderson's track record on predictions is impressive, with him recording a 95 to 97 per cent accuracy with his 2009 predictions.

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