PC Sales in Freefall: Wall Street Journal
Mega Mobile Market Share War Moving At Breathtaking Speed to the End Game
In a further episode of my earlier posts on the Mega Mobile Market Share War, it would seem that International Data Corporation (IDC) and Gartner, the two leading high tech industry analysis firms, are haggling over whether the precipitous drop in quarterly PC sales is 11. 2% or 14%. It also adds evidence to the accelerating rate of change in the corporate life cycle. Corporate life cycle events that took a decade are now occurring in a few short years.
Any way you look at it, it is a catastrophe for everyone in the PC business, and a further piece of the puzzle in determining who will win and lose in mobile. Shares of Lenovo, HP, Microsoft, and even Apple are all down as the market reacts to the news. This is doubly bad news for Microsoft, whose strategy seems to have been to introduce Windows 8 to bolster lagging PC demand, while building for the future with tablets and smartphones. It appears that the bottom has fallen out for Microsoft in more ways than one. First, we have the dismal forecasts for Windows mobile, also from IDC. Microsoft had been forecast to have perhaps 8% of the smart mobile OS market by 2015, fighting with Blackberry for the leftovers not taken by Apple IOS or Android. Microsoft’s mobile device partner, Nokia, is not looking too healthy in the mobile device war. If I were a Finn from Nokia, I would be camping out in Mountain View, not Redmond. Last week’s announcement that Facebook would adopt a modified version of the Android OS from Google, would seem to further dim Microsoft’s chances of finding a survivable market share in mobile, much less Blackberry.
No one has mentioned Dell Computer, currently in the midst of a protracted investor battle over privatization, pitting Michael Dell against Carl Icahn and the Blackstone Group. The market news today has undoubtedly impacted this situation in a major negative way. Michael Dell waited too long, and don’t forget that Microsoft is also a player in the original Dell plan to go private.. This is nothing less than a corporate train wreck. I could envision Dell now perhaps closing its doors, and Icahn, waiting like a predator to buy the deceased’s assets for a song.
Frankly, for those of us who were forced to contend with Microsoft’s unbelievable arrogance and hubris in the late 1990’s, we view the likely difficult times ahead for Microsoft with some irony. The way it is playing out, it is extremely unlikely that Microsoft or Blackberry will survive in their current forms. Meg Whitman will now probably announce the third or fourth reversal in PC strategy at HP and exit the business once and for all, to save HP.
IBM was incredibly smart to sell out to Lenovo when it did, and Lenovo must now be asking itself if buying the PC business from IBM was such a good idea, and rethink where it is headed.
Has Intel Corporation moved rapidly enough into mobile low power devices, and new markets like “perceptivity computing” which they showcased at CES this year?
It does seem increasingly likely that Google Android is in an unassailable position to win the Mega Mobile Market Share War. Apple and IOS will be number two. I would also offer that Apple’s situation has been influenced by a number of other ancillary factors. The death of Steve Jobs and Tim Cook assuming the reins of the company is one key factor, still not completely clear in its effect. Rumors began to float today that Cook would announce the first true mobile wallet app at the upcoming Apple Developer’s Conference. I just don’t see mobile payments as being the Apple “killer app” that some in the high tech blogosphere are calling it. Apple does not have a monopoly on mobile payment systems, and most believe that “point of sale” (POS) equipment will take nearly a decade to roll out. Another way of making my point is to ask why Apple left a “near field communication” (NFC) chip out of the iPhone 5 if Apple considered NFC and mobile payment to be the next big thing? That is the other factor: Apple arrogance and monopoly mentality that has been part of the Apple culture since the early days. It is Apple’s Achilles heel.
So my final word on all of this is that I have great respect for Eric Schmidt, Larry Page and Sergei Brin at Google. But even if Google and Android win the MMM Share War, as we all know, competitive advantage is a fleeting thing. Google need only watch Microsoft’s current conundrum to be reminded of that fact.