Company / division: Microsoft
Microsoft Hires Head of Privacy and Data Security from FTC (Apr 28, 2017)
ARM-Based Windows 10 PCs to Arrive in Q4 2017 (Apr 21, 2017)
Yesterday, we had IDC’s PC numbers for Q1 2017, and today we have Gartner’s. As usual, they show pretty different trends (IDC the first growth in five years, Gartner the lowest total shipments since 2007), because the companies define the market in different ways. Whereas those IDC numbers were for “traditional” PCs, these Gartner numbers include what some call “detachables” and Gartner calls “ultra mobile premiums” such as the Microsoft Surface. Interestingly, though, whereas in the past those detachable and convertible devices have led Gartner’s numbers to grow faster than IDC’s, the situation now appears to be reversed. That’s interesting, given how hot this category has been and how much it’s helped the overall PC market in the past couple of years. My guess is that the trend will go back to its previous pattern the rest of the year. The two companies do agree on some trends though: HP had a great quarter, particularly in the US, and component shortages are driving some interesting trends. However, whereas IDC saw the latter driving higher shipments in Q1 to get ahead of price increases, Gartner focuses on the downward pressure on shipments the component shortage is likely to cause in the rest of the year due to price increases. IDC and Gartner also agree that the “other” category is suffering badly as the big names consolidate share.
Traditional PC Market Was Up Slightly, Recording Its First Growth In Five Years as HP Recovered the Top Position – IDC (Apr 11, 2017)
This is an impressive rebound for the traditional PC market, which IDC had expected to continue to decline in Q1 but actually grew for the first time since 2012. One of the explanations, though is higher shipments that didn’t necessarily translate into sales, as companies locked in component inventories, so it’s not strictly speaking sales growth. However, it’s worth watching for whether this turns into a longer-term recovery for PC sales or just a temporary blip – my money is still on a long-term decline. When it comes to the individual vendors, Lenovo appears to be struggling despite a pretty decent recent history in PCs, which will further add to its woes given the collapse of its smartphone business over the last year or so. HP did very well, at least on paper, and it will be interesting to watch its next earnings release for signs of what drove the 13% growth it saw. Apple also seems to have done well, continuing the recovery it’s seen since launching new MacBook Pro models late last year. The other big story continues to be the decline of the “other” category as the top five or six vendors continue to scoop up more and more market share and growth, dooming the rest to declines much more severe than the market as a whole.
On the face of it, this could look like the in-app purchase model that so many other games have used so successfully over the last few years, which would look like capitulation on the part of Microsoft to the prevailing model. However, even though the article implies towards the end that that’s what’s happening here, this is actually something different. Whereas the classic IAP model often holds progress in the game hostage to the purchase of various items through the medium of in-app currency, Minecraft has always eschewed that model, instead charging a high up-front fee to purchase the game in the first place, with a small number of in-app purchases for specific items. It is now opening up that latter model to a small number of third parties, and while the use of in-game currency as the medium may carry echoes of the classic IAP model, this is something very different. Given the addictive qualities of the IAP model, that’s a very good thing, given that the game’s audience is largely children. The last thing Microsoft wants is for Minecraft to get a reputation for being a sort of Candy Crush for kids, whereas it’s currently known as a game that has at least some educational qualities.
Flipkart raises $1.4Bn from Tencent, eBay & Microsoft at $11.6Bn valuation, acquires eBay India – Economic Times (Apr 10, 2017)
There were recent rumors that Japan’s SoftBank might want to combine its investment in Snapdeal with an acquisition of Flipkart, but this funding news suggests that’s going to come later if it comes at all. The trio of companies investing here is intriguing. Tencent is perhaps the least surprising, as a company that invests heavily overseas including the US in minority stakes. eBay is apparently using this investment as a vehicle to buy into a bigger e-commerce business in India, as it’s transferring its own Indian operations to Flipkart as part of the process. Microsoft is the most interesting of all – though Flipkart recently switched to Azure for cloud services, Microsoft has no significant direct stake in an e-commerce anywhere else, so this is something of a departure for them, though of course major competitor Amazon already combines cloud and retail. Flipkart had in the past seemed to be the leader in the Indian e-commerce market, but has fallen from that role in the last couple of years as two overseas companies – Amazon and Alibaba – have made inroads there. This is a down round over the company’s previous valuation, but it and its new investors will be hoping the infusion of cash helps it get back into contention.
via Economic Times
For The First Time, Apple Drops Below Microsoft In J.D. Power’s Tablet Survey – Fast Company (Apr 7, 2017)
This is symbolically hugely important, because these are just the kind of stats that Apple likes to roll out on earnings calls and so on to highlights the strength of its products, far more so than market share or other statistics (though it often focused on percentage satisfaction rather than rankings per se). As the article makes clear, though, even though this is the first time Apple has dropped behind Microsoft, it’s not the first time it’s been beaten, as Samsung did so earlier. As is often the case with these rankings, you end up wishing the data were a little more transparent. For example, Microsoft apparently beat the iPad on Internet connectivity despite the fact that iPads offer 4G LTE as well as WiFi, which makes me wonder to what extent the ratings reflect the expectations people have of particular brands. In other words, are people pleasantly surprised that the Surface does certain things well, whereas others would expect the iPad to do those things well and therefore give it lower scores? Adjusting for those expectations would be tough, and I doubt JD Power does so. I also wonder to what extent Surface owners self-select into a much more narrow set of use cases for which the Surface is uniquely well suited, whereas the iPad is more of a general purpose device used by a far wider range of use cases, not all of which by definition it’s designed for. At any rate, it’s worth keeping an eye on this over time. Some of the other commentary in the article here is a little overblown – one thing is for certain: iPads massively outsell Surface computers of all shapes and sizes, so any idea that Surfaces are somehow displacing iPads in large numbers is nonsense.
via Fast Company
Microsoft’s cheaper mixed reality experience is similar to HoloLens, but there are limitations – Mashable (Apr 7, 2017)
When Microsoft held its Surface event back in October last year, one of the quick announcements it made towards the end was that OEMs would be producing VR headsets starting at $299. At the time, I said “Microsoft’s promotion of VR headsets from its OEM partners today is the first sign we’ve seen that Microsoft might be rethinking its focus on augmented rather than virtual reality. Given that HoloLens is likely to continue to struggle to achieve mainstream appeal, supporting a more consumer-friendly VR push by laptop makers is a smart move, although $299 PC-based VR solutions may struggle against smartphone-based versions at $100-200 which are more portable.” I still feel pretty much the same way about this, and it’s interesting that – despite the Windows Mixed Reality branding – these are basically VR rather than AR headsets. That’s a concession that VR is where the action is today, is the space at least some consumers already understand, and is frankly where all the content is today too. These new devices also reinforce the obvious compromises made when bringing price points down: the lower PC standards and cheaper hardware will make these VR headsets less powerful than either HoloLens or Oculus or HTC Vive hardware. There’s therefore an important question about whether this in-between space will gain any traction versus the cheap and basic mobile VR experiences provided by Gear VR and Daydream VR at one end and the high-end stuff being produced by HTC, Oculus, and Playstation.
This is an interesting strategy for Microsoft, which is releasing specs but not many more details for the next generation Xbox, which is codenamed Scorpio. On paper at least, it’ll be more powerful than its major competitor, the Sony Playstation 4 Pro, in several departments, but the consensus among gaming blogs seems to be that what Xbox needs isn’t so much better hardware as better software, or in other words more compelling games. This is where the Sony console has taken the lead in the current generation, and where it continues to do quite a bit better than the Xbox for now. It’s possible that the better hardware might spark better games from developers keen to push the limits, but Microsoft will obviously have to work hard and directly to get more developers and more titles on board. For now, this spec release by itself does little to tell us how the next-generation Xbox will do.
Microsoft launches Sprinkles, a silly camera app powered by machine learning – TechCrunch (Apr 4, 2017)
As I mentioned recently in the context of Microsoft’s Indian AI chatbot, the company appears to be in an experimental mood as regards AI, trying lots of things in lots of separate spaces, without pushing all that hard in any particular direction. There’s nothing wrong with experimentation, but there is a worry that Microsoft both spreads itself a little thin and risks diluting its brand, which has become more focused of late around productivity. There’s an argument to be made that this Sprinkles app fits its other, newer focus on creativity, but it’s probably a bit of a stretch given the minimal ties into any of its other offerings. On the consumer side, Microsoft’s biggest challenge continues to be not just producing compelling offerings but finding ways to monetize them.
This is an interesting little announcement – it’s short on details, but it appears Microsoft will be selling a version of the Galaxy S8 with more of its apps pre-installed. The big downside is that this seems to be a highly manual process and the devices are only available at full price from Microsoft rather than through carrier stores and installment plans, so that’s going to dramatically limit the addressable market. But it’s interesting to see Microsoft deepening its investment in Android at a time when its own mobile devices continue to be all but irrelevant.
Microsoft launches Ruuh, yet another AI chatbot – ZDNet (Mar 29, 2017)
It’s fascinating to watch Microsoft continue to experiment with AI chatbots after its first effort, Tay, went so badly wrong. But the company’s response to that embarrassment is a sign of the culture changes that have happened at Microsoft over the last few years, as this piece from USA Today a while back points out. Microsoft isn’t afraid of failing, picking itself up, and trying again, and that’s admirable in an area as competitively intense as AI. It’s also interesting to watch these chatbots be launched into markets outside the US with other languages and/or accents (its other recent effort in this space is based in China). There’s a long way to go until these chatbots become really useful, but Microsoft seems determined to keep trying until it gets it right, while another early proponent, Facebook, seems to be changing its strategy lately.
What’s interesting here is that Microsoft is licensing patents rather than selling technology to Toyota – in other words, Toyota gets the right to use ideas patented by Microsoft, but not products or services built on top of them. That suggests that, while Microsoft has an impressive patent portfolio, it hasn’t necessarily built with those patents technology carmakers consider valuable. And that remains a big challenge for Microsoft in the connected car space – Windows and related technologies have been used in cars in the past, and Azure is being used as a cloud service behind some connected car services today, but Microsoft continues to struggle to build technologies carmakers actually want to use in cars, while other players continue to make headway in the space. I could certainly see Microsoft doing more deals like this – indeed, it describes this as a first for a new auto licensing program – but that doesn’t mean Microsoft is any closer to a stronger role in in-car technology.
The recent downtime for Microsoft’s various cloud services hasn’t got nearly the attention Amazon’s recent outage did, in part because it’s more of a brownout than the total blackout AWS experienced, and in part arguably also because fewer third party services rely on Azure and related services. But Microsoft has had a couple of recent issues, and as of right now they’re happening again. There will always be issues here and there with any large scale infrastructure, but that they’ve been lasting for hours and repeating at Microsoft recently is a little worrisome, and it’ll be good to see the explanation when Microsoft finally shares it.
The ANA represents 1000 large advertisers including many of the largest companies in the US, so what it says definitely counts for something when it comes to advertising policy. And in this case it’s saying that it wants other big tech companies to submit to outside audits alongside Facebook and Google, who have already committed to do so. Strangely, Instagram is on the list anyway, alongside other independent names like Twitter and Snapchat. There really seems to be increasing pressure from advertisers for transparency and consistency, and this was one of the themes of P&G exec Marc Pritchard’s talk a few weeks back in which he called on the ad industry to do better on several fronts.
With Project Torino, Microsoft creates a physical programming language inclusive of visually impaired children (Mar 15, 2017)
Technology has enormous power to provide opportunities to children and adults with disabilities which otherwise wouldn’t be open to them, but it can also exclude students in educational settings where tools are designed for those without disabilities or visual or other impairments. This Microsoft project is a great example of using technology to reinvent a concept – coding – in such a way that both those with normal vision and the visually impaired can participate together. It’s just a beta project on a very limited scale for now, but hopefully it will expand into something broader down the road. Even better, of course, is building accessibility technology into the devices and services we use every day, something Microsoft has long been committed to as well.
Apple Joins Group of Companies Supporting Google in Foreign Email Privacy Case – Mac Rumors (Mar 14, 2017)
Given the way other big tech companies had weighed in on the related Microsoft case over the past few years, it was a little odd that more hadn’t sprung to Google’s defense in this one, but it’s good to see that they are now doing so. These cases have far-reaching consequences not just for user privacy but for the ability of US companies to do business in overseas markets, and those companies need to defend themselves vigorously. The final outcome of both cases is therefore worth watching closely.
via Mac Rumors
Last week Google announced its Slack competitor, and this week Microsoft is announcing the availability of its previously announced entry in this space: Teams. One big difference versus Slack is that Teams will be baked into every Office 365 enterprise subscription rather than being a paid standalone product, which should almost immediately make it available to many more people than Slack. In addition, it will be integrated into other parts of Office more fully than Slack itself. The big question then becomes whose implementation of the concept is better, and also to some extent whether people keen to use something other than email to collaborate will look to a startup or the company that actually runs their email – Microsoft is making the argument that it isn’t actually trying to replace email but instead offer another way to collaborate when email doesn’t make sense. To some extent, that actually has more credibility to me than replacing email entirely, which has always seemed a slightly unrealistic goal for Slack.