The public learned this week that HTC is losing key personnel at a rapid rate. Through friends of mine that worked there¹, I had a sense this was coming for a while. For the past few years I have been watching the numbers of all the handset vendors and HTC was one that concerned me the most given the trends.

Unlike many other Android handset competitors, HTC only has one business, selling smartphones. Samsung, LG, Motorola etc., all have many other businesses to help them deal with growth or declines in other areas. Chinese competitors are simply focused on the low-end for the time being, but HTC is geared to play in the mid to high-end arena. Which is close to no mans land when employing HTC’s current strategy.

That is why in 2010, I wrote an article stating why I felt Microsoft should buy HTC.² I had concluded at that time HTC was in trouble. If I was them, or any other mainstream Android OEM looking to make a dent in Samsung’s 95% of the Android profit pool³ this is what I would do.

I would surrender to Google. Stop trying to differentiate through software or UI value ad-ons and just simply make extremely elegant and innovative hardware, running the latest and greatest stock Android OS. Be vigilant about Android upgrades making sure your devices are always up to date in every area. Work closely with Google to deeply embed every one of their core services as if they literally own you. Focus on making great, elegant, affordable hardware and let Google take care of the rest. This way you can get a portion of the ad-revenues, and other service revenue sharing Google offers, and you have built your device and integrated Google’s services in a way to maximize Google’s revenue potential and yours. Be a Nexus device, without officially being a Nexus device.

This logic is absolutely counter to a market where one needs to stand out through differentiated software experiences. The problem is only Android competitor has successfully done this. I have championed against the Android sea of sameness and now I recommend pursuing it aggressively. People like HTC devices. Carriers like HTC devices.⁴ As Avi pointed out on Monday, other than the iPhone, HTC devices hold their value longer, this is good for carriers. HTC makes great hardware and can still do well by focusing on great design and unique hardware innovations. They simply need to let go of the software and work closely with Google to ship the latest and great stock Android on their devices.

This is a template that could work for HTC but could also work for others. The bottom line is the current strategy being employed by Samsung’s Android competitors is not working. Stock Android is very good and arguably always the best Android experience⁵. If needed there is room to add some better apps, like a better exchange email app for example, but don’t change the interface and leave the rest to Google.

1. They no longer work there
2. I still feel this is a good idea and likely
3. It is impossible for Android handset makers to survive competing for only 5% of the profit pool
4. With a few exceptions of course, like the First
5. As much as I applaud and appreciate the attempts to differentiate Android, I prefer stock Android every time

Of course, the hardware still has a lot to prove. The ultimate goal of the digital living room is a single box that can deliver all your entertainment desires. On paper, at least, the Xbox One comes closer than anything we have seen before. But features on paper, or even in a demo, are one thing and real life is another. Even Google TV looked sort of good in a demo before flopping with consumers.

The biggest challenge facing the Xbox One is the promised integration with cable set top boxes. Success will depend on the new Xbox’s ability to control the set top box through an easily set up HDMI connection. It needs to banish the cable box to irrelevancy for everything except accessing and decoding content, ultimately becoming your DVR and your gateway to video on demand. That would make it a huge breakthrough. But if it needs IR blasters to control cable, it will go the way of Google TV. Microsoft is so far silent on which boxes from which cable operators the Xbox will integrate with.

It also remains to be seen how well the gesture and voice control will work to replace traditional remotes or controllers. Again, these are technologies that often demo better than they work, but successful elimination of the need to use hardware to control the box would also be a huge step forward.

So it looks like Microsoft will have a hardware edge when the Xbox One ships “later this year.” The real challenge is to build on what already appears to be a slim lead in the availability of content. Here Microsoft can built on two advantages. One is that it has been a technology partner of both studios and and cable and satellite operators for years. For example, AT&T U-verse service runs on Mediaroom IPTV technology developed by Microsoft (the division was recently sold to Ericsson.)

But a more important reason, and an odd one given Microsoft’s history as the big bully of the tech industry, is that Microsoft is the company that Hollywood is not afraid of. Microsoft’s leading rivals in the living room are Apple, Amazon, and Google (Sony could claw back into contention, but it has fallen a long way behind.) Each of these competitors inspires fear and loathing in the studios. Apple is the company that ate the music business. Amazon is the company that seems to destroy value in every market it enters–good for consumers, but torture for producers. And Google is a company whose ambitious are scarily unbounded. Apple and Google TV effort has been hobbled by lack of cooperation from content owners and distributors’ Google so far has restricted itself to selling and streaming downloads to other companies’ devices, though it is rumored to be contemplating a set top box of its own. In this company, Microsoft can position itself as an honest broker, a neutral player with no dog in the fight.

The only entertainment content deal that Microsoft announced at the Xbox launch was an exclusive with the National Football League that will bring a lot of “second screen” content, such as stats and highlights, while watching a game on your Xbox. But there was no word about making the games available outside of the NFL’s existing deals with CBS, Fox, NBC, and ESPN. (Microsoft will also get branding on the hoods of replay stations; let’s hope that works out better for them than Motorola branding on coaches’ intercom systems.)

In the end, it is Microsoft’s ability to strike content deals with studios, networks, and sports leagues and getting cable operators to support deep integration of Xbox with their services that will determine success in the living room. At a minimum, though, it seems that if Apple ever announces that unicorn of tech unicorns, an Apple television, it will have to get over a bar that has been raised by Microsoft. It’s been a long time since we could say that about any product.

The Senate can grumble, but Apple is just taking advantage of what Congress has given it.

I’ve closely observed each major console announcement since 2000 and at each and every one there was a clear and focused message: this console was first and foremost about a great gaming experience. No longer is that the message. Great gaming experiences are simply assumed. They are the new normal and expected. The question that consoles need to address in order to evolve and appeal the wider audience necessary for broader adoption is: what else can you do for me?

Microsoft spent not only the introduction of the Xbox One but the vast majority of the presentations emphasis not on gaming, but on the what else can you do for me. This is very telling. Not just about where we are as an industry but Microsoft’s living room agenda at large.

I’ve long said, and I’ll continue to state that I believe Microsoft’s best asset to build upon and around is the Xbox. It is, arguably, the strongest and most relevant consumer brand they own today. It is also the strongest from an ecosystem standpoint, and the one I feel they need to build out from with regards to personal computing.

Of course the Xbox One will have amazing games, and I for one am extremely excited about that aspect. But, the most interesting parts of the unveiling were not the graphics, or games, or even the exclusive titles. The most interesting announcements were the OTHER exclusives.

Exclusivity is No Longer About Game Titles

We have a name for exclusive games. We call them platform drivers. The first Halo on the first Xbox was a platform driver. It was the single greatest selling point for that generation of XBOX hardware and it was exclusive to the Xbox. Many other top-tier titles were born as Xbox exclusives and its continued demand and strong sales were tied to those exclusives regardless of whether they stayed exclusive. It was almost always Xbox first or Xbox only with many top-tier franchises. To be fair Sony has many of their own, but the elusive hard-core gamer between the ages of 18-35 seemed to generally gravitate to the Xbox and the exclusive titles that drove the Xbox experience.

Today, however, Microsoft discussed exclusives of a new kind. Of course there will still be exclusive games, but now games are not the only exclusive content Microsoft appears to aggressively going after. Exclusive TV series, and network deals with the NFL, along with unique interactive content with SportsCenter were key parts of this announcement. I get the feeling that Microsot hopes that unique content of this kind may drive platform adoption the same way exclusive titles have in the past.

We keep wondering when our set-top boxes will break free from the mercantilist nature of our cable and TV programing companies. My thoughts on this is that we are simply waiting for an Internet only, or over-the-top-service only, blockbuster success. If that happens we will almost certainly see a paradigm shift. Perhaps Microsoft with the Xbox One will be the catalyst to drive this paradigm shift and create a true leadership position in the digital living room.

Wireless audio speakers and headphones are growing as a consumer category.  Best Buy has 192 different “wireless speakers” on their website, Amazon, 400.  The growth in wireless audio was helped by the growth of the premium music headphone phenomenon, started by Beats Audio.  Of these wireless speakers, the clear majority utilize either Bluetooth or AirPlay to connect the device to the speaker or headphone. The problem is that both of those standards fall short on premium audio quality, openness or ease of use. Skaa, an emerging audio standard with roots in pro wireless could solve most of today’s problems inherent in today’s wireless solutions.   

Apple’s iPhone sets the pricing floor ($0 for the model from two years ago), middle ($99 for last year’s model), and ceiling ($199 for this year’s model). Just two phone families – Apple’s iPhone and Samsung’s Galaxy S – make up the majority of U.S. smartphone sales overall. AT&T is particularly iPhone-centric; 80% of smartphones it sells are iPhones, so even though the carrier prides itself in offering the widest variety of phones, vendors, and operating systems, practically speaking, there is little room for rivals to sell into. This is a residual effect of AT&T’s long exclusivity with the iPhone and its smart policy of locking consumers into family and business contracts. But carrier exclusives overall have been declining on a percentage basis, even as the total number of smartphones on offer has grown:

Not only are carrier exclusives declining on a percentage basis, but the best phones are increasingly the ones available across carriers – the iPhone, HTC One, Samsung Galaxy S. (At a recent presentation for the Competitive Carrier Association, I pointed out that this means the playing field is now basically level in terms of devices. Smaller operators may need to agree to fairly high minimum orders, but they can get access to the devices that are in the highest demand.)

As exclusives have waned, pricing at the high end has dropped. Samsung’s Galaxy Note straddles the line between a smartphone and a tablet, and it has launched at premium pricing even for a flagship. However, the Note seems to be an exception – LG’s Optimus G Pro, which also sports a 5.5” display with higher resolution and more storage than the Note 2, launched at just $199. (However, the Optimus G Pro is an exception to the previous dataset – it is an AT&T exclusive.) Apple and Motorola have offered versions of their phones with additional memory above $199 for a while, and Samsung and HTC have finally picked up on that strategy, but on average, flagship smartphone pricing has declined over the past three years:

Here’s where it gets interesting. Not all flagships are created equally, and when a vendor’s high-end phone does not sell well, it drops in price:

As expected, Apple and Samsung phones have strong price stability, but Apple’s ability to maintain a premium price level for a full year in a hyper-competitive market is simply mindboggling. While it is true that iPhones sell best the first quarter they are available, iPhones continue to outsell rivals in non-launch quarters as well. HTC has enjoyed strong carrier launches which has kept prices stable even as its sales have declined overall. Smartphones from Sony and LG have not fared well, and within 3 – 4 months of launch, they drop into mid-tier pricing territory. Unsurprisingly, this has impacted the number of mid-tier smartphone launches:

It is awfully hard to sell a phone designed to sell for $99 with subsidy when consumers continue to snap up last year’s iPhone model for the same money a full 18 – 24 months after Apple introduced it, and three-month old flagship Android phones are pushed down to $99 as well.

The trends are quite clear, but there is one wildcard going forward: T-Mobile USA’s installment purchase plans. T-Mobile is asking consumers to buy their phones upfront, but it will split the cost of the phone into monthly installments alongside a no-contract voice plan. If consumers treat this as a direct replacement for subsidized plans – or if T-Mobile is simply too small to impact Verizon and AT&T at this point – then I expect the trends to continue. However, if enough consumers see the real cost of their flagship phones and opt to buy less expensive models, then we may see the return of the mid-tier phone in the U.S. after all. We don’t have data on that – yet.

While analysis can sometimes be a solitary pursuit, I owe a huge debt to my team for tracking, trending, and charting the data presented here. In particular, Peter Han was instrumental in pulling this together, and he co-authored the report that this column is based on.


Similarly, Microsoft was in a growing position in smartphones with Windows Mobile. They had tinkered with software stores but the experience never really gained significant traction. Companies like Handango helped fill the gap but again much of what existed then is gone now.

The most robust third party mobile developer network I witnessed when I joined Creative Strategies 13 years ago was the Palm developer community. In fact, the Palm developer community in terms of passion, excitement, and quality of applications being developed, reminds me a lot of today’s iOS developer community. Microsoft never enticed the same commitment and passion for their mobile platforms as the Palm community, even when they gained share and Palm itself began shipping Windows Phone. Despite their efforts Microsoft is still today struggling with weak developer interest.

As I think about this situation that Microsoft is in, it reminds me of the situation they were in with Internet Explorer for so long. They missed the boat on leading the Internet revolution and now again they have missed the boat on leading the app revolution. All while they were in the best position to lead in both.

The Network Effect

Both Palm and Apple achieved the network effect.

In economics and business, a network effect (also called network externality or demand-side economies of scale) is the effect that one user of a goods or service has on the value of that product to other people.²

The economics in turns of monetary opportunity for developers, as well as the critical total addressable market achieved by both Palm and then with Apple, created a strong network effect. This is still going strong for Apple today.

Interestingly, despite Microsoft’s position in PCs, I would argue they never achieved the network effect.³

You may have noted that I did not include Android in the network effect discussion. While it’s true Android has the lions share of the smartphone market, we also know just looking at Android’s market share does not singularly indicate the strength of a platform. Engagement is consistently reported as lower on Android than iPhone and developers are continually facing economic challenges of making money with Android.


Being in Silicon Valley I get to meet and talk with a lot of software startups. Android to many of these software companies I meet with is treated as a secondary priority. Rarely, do I meet with a company creating software for Android first or only. If this platform was doing well for the masses then I would imagine we would see more exclusive applications and I would see more software startups getting funded for Android only development. This is simply not the case. Android is benefiting from the network effect of iOS, however, as developers are generally taking their iOS first apps to Android eventually. Android has achieved a degree of the network effect by default, and on the heels of the iPhone.

This network effect is a key area that is driving both iOS and Android. This network effect has created long tail applications.

Long Tail Developers

Chris Anderson helped popularize the concept of the Long Tail with his book called The Long Tail: Why the Future of Business is Selling Less of More. (link) The concept in short is that there is value found in having large quantities of something (apps in this case) which appeals to smaller groups of people. Another way of describing would be simply to say having a successful long tail model means having massive quantities of niche content.

A successful long tail strategy, the one that I would argue creates the highest degree of loyalty to a platform or service, is one that has all the mass market goods (the popular items) but also and large quantities of goods that appeal to smaller groups of people. When we apply this theory to apps only iOS and to a degree the Google Play store are in the discussion. Popular apps may be the most profitable but long tail apps are often the most discoverable.

Imagine being a Windows Phone or BlackBerry user for a moment. Your friends or family members are all talking about the new apps they discovered or are using, for things like health and fitness, education, gardening, sports, etc. They all rave about these great apps that they love and are adding value to their lives. These apps don’t exist on your platform and probably won’t for a long time if ever, unless a critical mass is acquired. Which, of course, is not going to happen without long tail apps and long tail app developers. Its a chicken and egg problem.

Or imagine your kids sports team starts using an application to help manage schedules and parents assignments, but it only exists on iOS or Android. Your favorite grocery store, market, magazine, favorite brand, etc., comes out with an app, but it’s only available on iOS or Android. Your kids schools offer mobile apps, but they are only on iOS or Android. The workout video series you just bought has an app but it is only on iOS or Android. I hope you see my point.

Windows Phone and possibly BlackBerry may get the popular apps from the big developers, but where the platform really suffers is in the long tail apps and content, which is the driving strength for the mass market with iOS and Android. Only iOS and Android are attracting long tail developers at the moment.

Developing a critical mass of long tail apps and the developers who will continue to make them, is the biggest single hurdle I believe Microsoft, BlackBerry, and any other platform that aspires to enter the market. Without them, these alternative mobile operating systems will continue to struggle to find customers for their products until the same long tail apps make it to their platforms. If they make it to their platforms of course.

1. Updated: There was a Windows Marketplace but came no where close to the app stores I am talking about
2. Alpheus Bingham and Dwayne Spradlin
3. Happy to debate this point.

Dear Business Insider, how is this helpful?

1) In 2007, Apple introduced the iPhone. Google’s then CEO, Eric Schmidt was a member of Apple’s board and an honored guest at the iPhone presentation. It appeared that all was right with the worlds of Apple and Google – Apple was going to do its hardware thing and Google was going to do its services thing and a new era of mutually beneficial cooperation was about to begin.

2) In 2008, Google introduced Android – a direct competitor to Apple’s iOS – and the Apple/Google alliance quickly began to unravel. Schmidt soon left Apple’s board, Steve Jobs later vowed to go “thermonuclear” on Android and the Apple/Google alliance was over almost before it had begun.

3) It’s clear that pre-iPhone, Google was initially aiming Android as a Blackberry and Microsoft Mobile competitor, but as soon as the iPhone appeared on the scene, Google’s Android focus dramatically shifted. Assuming that competing with Apple was the right strategy, Google should be given all the credit in the world for pivoting as rapidly as they did from their original plan to creating a legitimate iPhone competitor.

4) As an aside, I also give Microsoft lots of credit too. When the iPhone initially appeared, Microsoft didn’t foresee the danger it posed. But soon afterwards, they not only recognized the danger but they acted and acted decisively. They took the radical step of abandoning Windows Mobile altogether and initiating their new Windows Phone 7 platform. It was a bold move, but as history as shown, it was one year too late. Windows Phone 7 (now 8) has never gotten any traction and it languishes in third place, just above the rapidly fading Blackberry OS.

5) I think I could make a pretty compelling case that Google should never have made Android a competitor to Apple’s iOS. By doing so, they destroyed a promising alliance and, perhaps, took a long, long, detour down a path that they never should have taken. But that’s all moot now. We’ll never know how that alternative reality would have played out, so there’s little point debating it.

6) What can’t be debated is the effect that Apple’s iOS and Google’s Android have had on the incumbent smartphone competitors. Palm and WebOS were wiped out. Blackberry was devastated. Nokia was humbled. Microsoft Windows was abandoned and replaced by Windows Phone 7.

Pundits often frame the smartphone/tablet wars as a battle between Apple’s iOS and Google’s Android, but in reality, those two operating systems – with Apple descending from above and Android rising from the below, crushed the existing smartphone competitors between them.

There is little proof that Android has ever made any significant income for Google, but if the destruction of their enemies was Google’s aim, then there is no doubting that the Android strategy was eminently successful.

7) Google’s I/O keynote barely even mentioned Android or any kind of hardware at all. If there was a common theme, it was about service unification between Chrome and Android.

Instead of an updated Nexus 7 tablet or a new Chromebook model, Google spent three hours during Wednesday’s keynote to discuss services and feature upgrades for both Chrome and Android.

If I could describe #io13 in one word it would be “unification”. Same features, services, UI and experiences on Chrome and Android. ~ Kevin C. Tofel

I think that Ben Thompson is spot on with this analysis:

“Services are where Google excels, and it’s where they make their money. It’s why they make the most popular iOS apps, even as their own OS competes for phone market share.

Apple, on the other hand, makes money on hardware. It’s why their services and apps only appear on their own devices; for Apple, services and apps are differentiators, not money-makers.”

“Apple invests in software, apps, and services to the extent necessary to preserve the profit they gain from hardware. To serve another platform would be actively detrimental to their bottom line. Google, on the other hand, spreads their services to as many places as possible – every platform they serve increases their addressable market.”

8) The battle for mobile is over. Apple’s iOS and Google’s Android reign as a duopoly and Microsoft and Blackberry hang on by the skin of their teeth. Google is free to put its web services on Android and iOS and to ignore the Blackberry and Windows 8 operating systems. Android has ensured that Google’s services are freely accessible on the only two operating systems that matter. The Android strategy was a success although, perhaps, at great cost. Google’s I/O keynote is living proof that Google is now re-focusing on their original mission of dominating web services.

The issue isn’t security, and least not in the conventional sense of protecting your data and operations from malicious hackers and other no-goodniks. In truth, most service providers are better at that sort of security than businesses from whom IT and IT security are not core competencies. The problem is the amount of control you surrender when a third party hold your information.

In the AP case, the government subpoenaed call records for 20 phone lines used by AP reporters and editors, apparently as part of an investigation of leaks about the disruption of a terrorist plot in Yemen. I’ll leave it to others to discuss the legality and the First Amendment implications of DOJ’s actions. But the implications for privacy are disturbing.

The government was able to obtain the phone records by issuing subpoenas to carriers–and neither the government nor the carriers bothered to inform the AP of the request. The news service found out only because regulations require eventual, after-the-fact notification–but only for news organizations. If you are any other sort of business, you might never find out about the surveillance.

Phone records are always highly vulnerable. You don’t have the options of operating your own telephone system. And telephone carriers have a history of giving up call records, and sometimes a lot more, to the government on the slightest provocation. But what about e-mail? Here things get murky. The Electronic Communications Privacy Act which covers email, was written in 1986, in the MCI Mail era. Under the government’s interpretation of it, mail stored on third-party servers that is more than 180 days old or that has been opened can be obtained without a subpoena. That interpretation is currently tied up in several law suits. But the government could also subpoena current mail records and there is no requirement that you be notified.

AP was lucky. It apparently hosts its own email, so there is no way the government could read it without a direct request to AP, which it then could have fought. There’s hardly a guarantee of success, but at least it would have known what was going on. If you control the data, you can make your own choices, including going to jail to protect it. If a third party has it, the choice is theirs, not yours. (Twitter has an admirable policy of notifying users of government data requests; most other service providers do not.)

You have equally little control over data stored on third-party servers. And the Obama Administration is pushing for new rules requiring internet service providers to retain more data on customer activities and to keep it for longer. The more you outsource, the more data you have out there under third-party control.

I’m not arguing against cloud computing or outsourcing of services. The benefits may very well outweigh the risks. But businesses (and individuals, for that matter) should be aware of just what those risks are.

The Bloomberg case exposes a completely different risk. Using third-party services necessarily exposes a lot of your information to the service provider. Even if you use the best security practices and encrypt all of your data both in flight and at rest, you traffic is moving over their networks and, as any good intelligence analyst will tell you, you can learn a great deal just from traffic analysis.

The standard Bloomberg contract, like the one obtained by Quartz, contained language allowing Bloomberg to monitor customer use of the system “solely for operational reasons.” Such language is typical in service provider contracts and is usually interpreted to mean that monitoring is allowed to the extent technically necessary to provide the service. But whether it is a rogue employee or, as appears to be the case with Bloomberg, a matter of policy, it is all but impossible to prevent the misuse of customer data. All you can do in the end is choose your vendors carefully and trust them.

Todays Topic: Blackberry goes horizontal with BBM

Apple’s style, love it or hate, has been around exclusion and secrecy.  Their product, PR and analyst programs are very exclusive and at least from my experiences, impossible to get a response from. Large scale analyst days are non-existent and their product launches are held in smaller-venue locations.  This exclusionary strategy works well for Apple when it is doing great and bringing a constant flow of ground-breaking product to the table like the iPod, iPhone and iPad.  For the Apple of the 90’s, outside the Mac proponents, it was looked at with disdain, which was actually helped to bind the Mac crowd together. Microsoft’s adoption of Apple’s strategy is part of Microsoft’s challenge today.

During Windows XP and Vista time-frames, Microsoft had some of the most inclusive practices on the planet of any technology company out there.  During the Vista time-frame, Microsoft literally invented the large company social media interaction.  Forget about Vista the product, their social media strategy was phenomenal.  Oh yes, don’t forget, this is where Robert Scoble got his social media start. Microsoft also pioneered what I consider the “super-user”, or MVP program, which is still in practice today. For Windows, Microsoft would give a tremendous amount of details, very early on, about upcoming versions of Windows and had very inclusionary analyst and press practices.  Then came Windows 7.

During Windows 7, communications changed dramatically.  They became a lot more like Apple’s than Microsoft’s.  Ecosystem briefings, disclosures, and two-way communications seemed to slow to a crawl.  But that didn’t seem to have an effect on Windows 7 as the operating system was wildly successful.  The problem was, that this new communications strategy mythically became one of the reasons, inside of Microsoft, that Windows 7 was so successful.  The logic was that because we (Microsoft) spent less time listening to people who don’t really add value, we executed faster and introduced a superior product everyone wanted. Then came Windows 8.

At the same time Microsoft was developing Windows 8, Apple was on their meteoric rise and all eyes were on Steve Jobs and his autocratic style.  It became even more reinforced inside of Microsoft that one of the keys to success was to basically, act like Apple.  No one actually said “we need to be more like Apple” but I was told, “Look at Apple, they do that, and it’s working great for them.” And then the Windows 8 started.

Windows 8 was the first major Windows UI overhaul since DOS.  It went from keyboard, mouse, icons and folders centricity to touch, swipes, charms and live tiles. The application development tools changed completely.  ARM support was added.  Literally, everything about Windows changed from top to bottom.  At a time like this, Microsoft needed early, widespread, inclusive communications with the entire ecosystem, not exclusive, secretive communications of the Windows 7 era. The result is what you see today, where it appears Microsoft can’t seem to get a break.  The 100M licenses sold that many companies would kill for gets picked apart, admission of Windows 8 challenges gets “I told you so’s”, and people are calling Windows Blue the Windows 8 that should have been.

You see, this has very little to do with the product itself and is a result of years of Microsoft trying to adopt many of Apple’s characteristics I outline above. This has unfortunately created a negative environment where the ecosystem, because they don’t feel heard or a part of creating Windows 8, doesn’t feel ownership of Windows 8.  It’s a disconnected relationship, like a distant cousin. Anyone like me who was a very strong part of the Windows ecosystem for years knows exactly what I am talking about.

While I will save for a future post exactly what I would do to turn this around, I will say this is all about carving out that unique positioning and acting on it.  There still exists a need for an inclusive and over-communicative tech giant, and it’s up to Microsoft and Google to determine who wants to take it. I have seen some positive signs coming out of Microsoft that they would like to head in this direction, but we will all need to wait and see.  Don’t forget, only Apple can play Apple.

Take Amazon for example. Why Amazon gives no indication as to how many Kindle products (namely the Fire) they are selling is beyond me?. If it is doing remarkably well wouldn’t you want to tell people this. Especially if you want developers creating applications for your Android fork. You would think if developers knew what their total addressable market would be on Amazon’s platform, that it would be helpful and lure them if the number was attractive.

Then there is Google. They proclaim Android figures by way of activations. No one truly knows what that means but now Google is changing the methodology to report only those device which activate Google services, namely the Play Store, rather than just an activation of any Android device that pings their servers. There are many more millions of Android devices access to Google service, which now makes it harder than ever to know how many Android devices are sold and actually in the hands of users. At least Google’s new reporting more accurately reflects devices in use, and using Google’s services, but even then we have some discrepancies. John Kirk points that out here.

Samsung is a little better. But only at times. Some quarters they will tell us how many specific device models they sold. But then sometimes they won’t specify sales of specific device models and just lump all devices together and tell us how many smartphones they sold.

Now I turn to Microsoft. The buzz last week around the fact that they had sold 100m copies of Windows 8. On this point, I must highly recommend an article Charles Arthur wrote in the Guardian where he built upon my Tech.pinions colleague Patrick Moorhead’s methodology for calculating actual Windows 8 devices in use.

Moorhead combines the NetMarketShare figure from April, which shows a 4.2% share, with the 1.4bn installed base to come up with a figure of 58.6m machines presently running Windows 8. That’s an average of less than 10m per month since it went on sale – which doesn’t feel like a lot, especially since the run rate for Windows 7, once it got into its stride, was 20m per month.

100m copies sold. Not yet in use. They will get there by the end of the year. If they don’t we have a real problem.

Then, in an attempt to counter some of the hard hits they took this past week, Microsoft’s Corporate Vice President of Corporate Communications Frank Shaw wrote an interesting blog post. One quote stood out in particular.

So let’s pause for a moment and consider the center. In the center, selling 100 million copies of a product is a good thing. In the center, listening to feedback and improving a product is a good thing. Heck, there was even a time when acknowledging that you were listening to feedback and acting on it was considered a good thing.

Frank is right. Selling 100 million copies of anything is a good thing. But as Charles and Patrick point out, there are far less than 100m copies in the hands of consumers. Furthermore, I would ask Frank a question about these 100m copies sold. What choice do the OEMs have? If you want to make a PC, and you are not Apple, where else can you get your operating system? The answer is no where. OEMs are bound to Windows if they want any chance to hit sales numbers. So realistically they are going to buy whatever Microsoft sells them. Harsh reality but its true. And yes Frank, listening to feedback is a good thing. I’m just worried Microsoft is not listening to all the RIGHT feedback.

Microsoft will continue to sell 100s of millions of copies of Windows each year by default. The OEMs have no viable alternative. Maybe this will always be true, maybe it won’t, time will tell. Maybe Chromebooks will be the alternative. Android clamshells certainly aren’t the answer. But I can tell you one thing I am extremely confident about. Microsoft and their partners worst nightmare should be if Apple ever decided to get price competitive with their Macs.

Giving all the facts with regard to sales numbers that reflect their actual use by customers is the only way to be genuine and forthcoming. Consumers either want your products or they do not. By telling us how many of them are actually buying them, using them, and not returning them, is the only metric for us to truly gauge whether your company or its products are actually viable and growing true market share.

I can only conclude that by not giving us the whole story, that the whole truth is not as rosy as its made out to be.

Extra Thoughts:
- Keep in mind most of those 100m copies were sold to OEMs making PC, hybrid, and convertible hardware, all who hope to sell them through the retail channel for actual customers to use.
- Of course by Macs being price competitive I mean in the sub $599 range. That is where the Windows volume is and will be.
- There are other companies who aren’t specific when it comes to numbers, I just mentioned the ones with the biggest spotlight on them.
- It should go without mentioning but I will anyway. Good or bad, Apple is the only one who gives real sell through numbers.

I am here to help. Don’t worry, I promise this will be painless.

I’ve traversed two decades in the telecommunications industry and have spent ridiculous amounts of time over the years testing and sampling various smartphones across just about every single platform, price point and form factor. If it means anything to you, I even own a MeeGo. Looks great, but unfortunately it works about as well as your four-year-old netbook.

Let’s begin.

Dear Brian…

Which smartphone should I buy?

The iPhone 4S.

Perfectly designed, flawless to operate, affordable. Apple offers the best, most robust, most pleasing ecosystem of apps, games, content, payments, customer support, product integration and accessories. I cannot say exactly how many billions Microsoft, Google and others have spent over the years attempting to equal the iPhone’s operating system – iOS – but I can say that none have yet met the challenge.

Apple’s iPhone repeatedly tops the competition in customer satisfaction ratings. iPhone users are much more likely to stick with iPhone compared to Android users. That should tell you all you need to know.

Done! That was easy.

What? You have more questions? My singular advice simply not enough? Fine. What else?

Why not iPhone 5?

There is a reason why the iPhone 4S continues to sell so well around the globe: on form and function, ecosystem and compatibility, the 4S offers the best bang for the buck of any smartphone on the market, bar none.

Yes, the iPhone 5 is a great device. It has superior hardware specs to the 4S. In my opinion, however, it feels too delicate. It’s design is not perfect. iPhone 5 is too long and narrow. For many people, particularly women, they can’t control the entire screen with a single swipe of the thumb.

I hate Apple!

No, you do not. Besides, Apple, just like Nokia, Google, Samsung et al is a giant, for-profit corporation unaware of your existence. This is not about them, this is about you – and the best smartphone for you. Get the iPhone 4S.

Don’t care. I refuse to buy an iPhone!

Fine. Buy an HTC One, it’s a good phone.

You’re saying the HTC One is better than the Samsung Galaxy S4?

No. I think the S4 is slightly better. But if you buy the S4 all your friends will think you did so only because of all those Samsung commercials.

Not a Droid or LG?

No.

Shouldn’t I just wait for the latest model?

I cannot recommend that which does not exist.

I read that Android has surpassed iPhone. True?

After years of slavishly copying iPhone, the Android UI inexplicably remains almost willfully confusing. This is compounded by the greed and short-sightedness of carriers and handset makers. However, Google nearly makes up for this with great search, maps, Google Now notifications and other services optimized for Android. Plus, many handset makers like Samsung put amazing hardware into their devices. If you simply cannot bring yourself to get iPhone, an Android is a suitable alternative.

What about all the “phablets” I keep hearing about? Should I get one of those?

No.

But…

Do not be swayed by that big screen – even if you can hold the device in one hand comfortably.  Smartphones are not televisions. You take your smartphone with you everywhere. You use it constantly. A phablet is almost certainly not right for you. Form is a primal factor in choosing the right smartphone and the phablet form is an evolutionary dead-end. The one thing it does well – offer a very large display – simply cannot overcome all that it does bad. Phablets are too big, too wide, too heavy and not optimized for the role they attempt to fill: a multi-purpose, always-on, fully mobile personal computer.

I’m going to buy a phablet anyway. I like the big screen.

If you insist, then I recommend you get the new Samsung Galaxy Note II. You will regret this.

You obviously hate Windows Phone.

How Nokia could have blown through two plus years of development and delivered only the Lumia 920 and the 928 (soon), is beyond my comprehension. Windows Phone deserves a far better flagship device.

But I do not hate Windows Phone – the operating system. It’s a beautiful, reasonably intuitive, highly customizable UI that delivers real-time updates probably better than any other platform. The problem, though, is that Microsoft simply made the wrong UI choice. I suspect they will never recover from it. Singular, static apps really do work better for smartphones – as iPhone has proven repeatedly – than the “live tiles” format that Windows Phone adopted.

My daughter loves Facebook. Should I get her one of those HTC Facebook Phones?

No.

But she really loves Facebook.

Get her any other (non-Windows Phone) phone listed here. I promise you, she will be fine.

I think you’re wrong about the iPhone 5.

The iPhone 5 was a very clever attempt by Apple to build a device with a larger display – as the market demanded – while maintaining all the benefits of their app ecosystem. Apple can and will do better.

I cannot afford any of these devices.

Whatever smartphone you choose, assume you will have it for between 1-3 years. The cost of the device itself will almost certainly be less than the cost for voice, data and texting services. Plus, you will buy apps, music and other content, and accessories – such as a car charger, stereo speaker and case – for your smartphone. Factor all of these costs into your decision.

If you still decide to go with a low-priced device, get last year’s top-of-the-line Samsung: the Galaxy S III. If you can get a refurbished model, this is a truly great buy. If you cannot afford this, I would encourage you to not buy a smartphone at all. Get a quality feature phone with a physical QWERTY keyboard. There are many options available.

My company doesn’t allow me to use iPhone or Android.

Delta doesn’t allow me to have my smartphone running during take-off. That’s never stopped me.

I can’t possibly type on that touchscreen. I need a real keyboard.

You will learn.

I refuse.

Then, wait. Very soon you can have a BlackBerry Q10. I think you will be impressed. (Note: do not get the BlackBerry Z10)

Which carrier should I go with?

That I cannot help you with. They all have their own unique set of faults.