MS Cocoon

My two year old is convinced that her middle finger is her ring finger and her ring finger is her middle finger.

One of my friend’s firms was gobbled up by Microsoft back in the late 90s. He told me how HR folks descended from Microsoft and started telling the employees about beloved Microsoft was by everyone. My friend tried to clue them in on the fact that Microsoft was not really that well liked in the bay area, but he gave up once he realized it was futile attempt – sort of like when I try to convince my daughter which finger is which – she won’t accept it!

The reason I bring that up is because I was reading this post by Don Dodge, a former VC, entrepreneur, and current member of Microsoft’s emerging business team and I got the same sense as my friend did with Microsoft HR – Redmond is isolated from the market. His post is rife with cliches and displays a fundamental lack of knowledge of competition and general market conditions. I realize they know about OS X – I just have to look at Vista, but I wonder if the sheltering cocoon at Redmond prevents Microsoft from getting out a little and actually learning about the larger market at hand or if its just a typical habit of any monopoly.

Here are some of Dodge’s statements and copies of the comments I left on his site:

The Apple Mac has a small (about 5% market share) but loyal following of users. I never got into using Macs but the users I talk to always marvel at how everything works together. Yes but, everything has an Apple logo on it. You buy it from Apple, and pay a 20% premium price for it.

Most people know that this price premium has eroded, both in the desktop/laptop world and otherwise (note that the iPods are competitively priced). In fact, today thanks to sensible & useful software bundles, Macs are less expensive than their PC counterparts.

Apple builds closed proprietary devices. The larger marketplace wants open devices (computers, music players, phones) built on industry standards, or at least “de facto” standards. They want to be able to buy software, peripherals, and hardware upgrades from a variety of sources. This competition keeps prices low and drives innovation.

I am not sure what this alludes to – maybe the motherboard? Macs uses industry standards for internal (memory, hard drives, etc.) and peripheral connections, which is in fact, why they have been able to keep prices low. Xserves are cheaper then Dell for the same specs! Except for the hobbyist market, the vast majority (consumer and corporates alike) just buy a new machine, so the upgrade issue is moot.

Software-wise, its the same story: OS X is built on top of a open kernel. iTunes uses Webkit and plays open standard MP3 and AAC formatted songs. Safari is built on top of the KHTML open source framework.

Unless he is referring to the old (an long dead) NuBus architecture, this statement makes no sense. The first thing Steve Jobs did was purge anything proprietary so they could use open standards for everything, keep costs low, and drive innovation in areas that they could significantly contribute (such as iTunes).

And its interesting that Zune, Xbox, and possibly future devices from MS might go the same way? I believe that the hobbyist era of computing is over – people want solutions that work, not something they can tinker with. IMHO, Microsoft, since it is not directly connected with the consumer, does not realize this.

And finally, this:

It just occurred to me today that the way they do it in computers, music players, and phones, is by controlling the whole experience.

He has been a VC, has worked at DEC (which means he is a software veteran), has started or has been part of many new ventures, and he realized this just today? Are you effing kidding me. Yikes – change that water in Redmond!

CES will move date

I am guessing that CES will the move date to a week after MacWorld because they won’t let this happen again:

Yoshi Yamada, chief executive of Panasonic Corp. of North America, ditched CES for part of Tuesday to fly to the Macworld expo in San Francisco just so he could sit in the audience to see CEO Steve Jobs introduce Apple (nasdaq: AAPL – news – people )’s new products – the iPhone and the Apple TV set-top box – in person.

And to make sure that Apple doesn’t lose momentum, Steve Jobs will attend CES to revisit earlier announcements.

Gary Shapiro, president and chief executive of the Consumer Electronics Association, said the organization decided many years ago to start pushing down the opening date of CES to allow its thousands of exhibitors more breathing room following the New Year.

Shapiro said the association has invited Jobs to deliver a keynote at CES in the past.

“Steve Jobs turned it down,” Shapiro said, “but he said he’d be happy to come if we change the date.”

The center of gravity is shifting.

Note: Corrected numerous errors. Thanks to Scott for proof-reading – I was even worse than usual this morning.

Motorola & SanDisk

I wonder how much longer before MOT decides that it has to compete head to head with Apple, and if/when that times comes, will it buy or build? Similarly Sandisk, as a #2 MP3 player, has to find a way to compete effectively not only with Apple, but Motorola and others. MOT has been under pressure to improve sales, and Sandisk’s steady flash business coupled with their foray into consumer electronics might be a good fit. Watch out for this one.

Note: I am not a financial analyst or associated with Wall Street in any way except for owning a brokerage account. So please be aware that this mere speculation on my part.

Apple’s iPhone claim in a nutshell

From the WSJ:

If Cisco didn’t offer iPhone-branded products for a lengthy period — or didn’t try to block other companies from using the name — Apple could argue that Cisco didn’t live up to a legal obligation to defend the trademark …

An Apple spokesman said several companies besides Cisco also use the name iPhone for Internet-based phones, characterizing Cisco’s U.S. trademark protection as “tenuous.” He said Apple is the first to use the name on cellphones.

I think Apple needs to let this one go – the issue is not worth battling with Cisco. This just gives more fodder to naysayers and “pundits” (aka Microsoft shills). IMHO, there has been sufficient buzz with this product that people will associate the term iPhone with something called the Apple PhoneThingamaJig.

Paging Henry Blodget

Here’s the equivalent of Blodget’s $400 target on Amazon:

I believe Apple can earn $4 in 2007. If Mac sales continue to grow (and they should) and iPhone does not face launch delays, I believe the stock can see $200 by the end of this year.

Question: how much of that expectation is already built into the stock?

The Register finds Visual Voicemail

The Register discovers that Visual Voicemail has existed previous to Apple’s annoucement:

Earlier this week, Apple bragged about teaming with Cingular on its Visual Voicemail software that runs on the iPhone. The voicemail application displays caller information and allows users to pick the order in which messages are played back instead of forcing you to hear messages in a sequential order.

Such features won’t impress Citrix, which has been selling Visual Voicemail software since it acquired Net6 in 2004.

That’s great – you know you what, I remember using it in 1999 with eVoice before AOl bought it. But I have never used visual voicemail using cellphones and that’s what Apple & Cingular innovated. Dopes.