It has a considerable lead in Kenya, where I am right now the week after attending the Mobile Web East Africa conference (#mwea2012 on Twitter). The top 5 phones sold in the Kenyan market were all Nokia devices. These were of the "feature" variety (the exact models were listed in a presentation that I will find once they post the presentations), and wouldn't fall into the Smartphone category.

Nokia is under pressure in this segment, mostly from Chinese handset manufacturers such as Huawei and ZTE who are adept at creating phones at the price points that the average Kenyan can afford.

Their brand, however, is strong, which helps somewhat, particularly given the quality standards normally associated with Nokia devices. Mobile handsets are expensive for those on low incomes, and the need to buy a device that can survive under harsh conditions favors the brand most associated with high quality levels. Nokia is that brand.

However, it is the smartphone category where Nokia is having the most difficulties. iPhone is a non-issue for Nokia in Africa, as the devices often cost twice what they do in developed markets, thus putting them beyond the reach of most (though among those who can afford it, Apple products are very popular). The platform that has made the most inroads from a platform standpoint is, not surprisingly, Android - a platform whose low cost (free) and open source nature is well suited to cost-cutting efforts.

Specifically, the device that is putting the most pressure on Nokia is the Huawei IDEOS U8150. Originally retailing for Ksh 14,999 when it was rolled out by Safaricom during the 2010 Christmas season (or $180, a price that matters more than it does in the US, as carriers in Africa almost never subsidize phones), it now retails for Ksh 7,999 (or $100). Sales have been strong, accounting for over 300,000 devices sold in 2011, or 45% of the market for smartphones.

Those familiar with the volumes of smartphones sold in developed world are probably suprised that 300K+ is considered "strong." Safaricom, the largest carrier in Kenya with around 80% of the market, has around 16 million subscribers. Of those, only around 10% have smartphones, according to an engineer to whom I spoke. Only 25% have a data plan for their phone (usually prepay data, which is common in Kenya), thus limiting demand for a phone that works best with a data plan.

So, for Huawei to sell 300K+ smartphones, it means the total smartphone units sold in 2011 was around 667K. That's 4% of the Safaricom subscriber base, and half of the total number of smartphones currently on the Safaricom network. This is in spite of build quality issues that various bloggers have noted (several of our test devices at ForgetMeNot Africa have back plates that won't reattach properly after little use, and battery life is a mere 4 hours with 3G data (6 hours with 2G data).

Therein lies the opportunity for Nokia. According to Simeon Oriko, Community Lead at iHub, a technology meeting point in Nairobi, most Kenyans (or most Africans, for that matter, as Kenya is ahead of most of the rest of Africa in terms of use of mobile data) haven't made a decision about which smartphone device they favor. They do, however, have great experience with the build quality of Nokia devices. As they start to consider which smartphone device to purchase, they are naturally inclined to favor Nokia smartphones.

That provides Nokia a tremendous leg up in terms of attracting users to Windows Phone-based Nokia devices, provided they can roll out product at a price that users in Kenya can afford. The Lumia 610 looks to be Nokia's attempt to do that.

Granted, the device is still quite expensive, list-price wise, but then again, so was the Huawei IDEOS. Economies of scale will help to drive the price lower. The trick was pushing the platform to a point where low-end devices featuring a high-end operating system become possible. If they can maintain build quality as the price drops with scale, they can justify a premium over the IDEOS.

A lot has changed in the three years since Netflix first signed its deal with Starz, as streaming video has catapulted from an idiosyncrasy of the technically sophisticated to a habit practiced by 25 million Netflix subscribers. Many believe this has contributed to the erosion of cable subscriptions, a source of revenue that constitutes the majority of the money brought in by content "aggregators" such as Starz. This is the reason HBO, creator of critically acclaimed content such as "The Sopranos," "Boardwalk Empire" and "Game of Thrones," has avoided a deal with Netflix.

Netflix, of course, downplays the ramifications of the loss. In their official response (see that blog post), they note that Starz-sourced content accounts for only 8% of media streamed by viewers, and believe that figure will drop by 2% in the next six months. They attribute this relatively small share to a diversity of content sources. Netflix believes that content provider diversity mitigates the power any one source of content has over the Netflix streaming library.

To that, I must respond with a resounding: Maybe. Granted, acquiring content from multiple sources is essential, just as it is essential that a pizza restaurant not become beholden to one source of tasty Italian sausage. Starz, however, was a useful content source because it created variety, particularly in films, which consumers find quite appealing even if they don't watch Starz content exclusively. Licensing content from individual studios can also make your selection seem somewhat narrow. Lionsgate, for instance, tends to favor a very definite style and budget of movie, and Hulu's deal with Miramax creates a decent selection of Quentin Tarantino films (among others), but isn't going to offer the variety of a Starz deal.

The bigger issue for Netflix, however, is the risk that more sources of content will shy away from Internet streaming due to fears over the erosion of pay TV revenue. The Starz defection, in other words, could be the tip of the iceberg. It all depends on whether the new streaming model, one that faces potential bandwidth issues in the near future, makes enough money to offset the loss in pay TV subscriptions. Trends certainly don't look good. NBCUniversal, Fox Entertainment and Disney-ABC aren't selling Hulu because it is making them so much money they can't find enough buildings in Burbank in which to store the cash.

On that note, Starz decision should be a hint of potential business model issues for the big companies sniffing around Hulu. The idea that studios like NBC, Fox and Disney would band together to create a distribution channel for their own content makes decent sense, as streaming is certainly a great way to distribute content in today's world of Internet-savvy consumers. The notion of Hulu as a sellable commodity, however, seems weird to me. Yes, they have a bunch of client software that works with various types of devices (PCs, Set-Top Boxes), and they have server infrastructure to support streaming (though they may outsource some of it to others), but unless they are happy to confine themselves to content from the venture partners (which clearly isn't enough, otherwise they wouldn't be keen to sell), Hulu will have to spend a lot of money securing rights to content.

As a company like Hulu gets more successful, the cost of content will only go up. Content companies hold all the cards, as they have the stuff that people want to see. That gives them one hell of a trump card in discussions with distributors like Hulu (or Netflix), which makes ownership of a brand like Hulu or Netflix quite risky.

Frankly, I don't know what Hulu is actually selling except some client software and a supporting server infrastructure. That's not a lot of "stuff" to justify a rumored $2 billion valuation.

Personally, I'm not sure if a distribution "brand" like Netflix has long-term viability (however much I enjoyed the service). They've demonstrated that customers want streaming content, to be sure, but their future is bound to the whims of content companies. Content companies can be your best friend if you are funneling gobs of money their way (as cable companies historically have), or your worst nightmare if you are making less money for them than other revenue models.

That's why I think a more likely long-term model involves producers streaming content directly to customers. There would be some aggregation. Viacom has more than just South Park and Comedy Central in its arsenal, and the same applies to movie studios like MGM or Sony. However, a "direct to consumer" future would be a lot more "a la carte." Consumers could choose to, say, subscribe to the Viacom content source, as opposed to paying $100+ for 200 channels notable for how fast most viewers scan past them with their remotes. It would certainly result in a much wider range of content, and would level the playing field for content distribution to a level that has never been seen before.

Such a model would appeal immediately to this "cord cutter" (me) who hasn't had cable television since 2009. I am perfectly happy to pay $10 / month primarily to watch the Daily Show and the Colbert Report on Hulu (which, as a father of two young children, is about all I have time to watch). Yes, that's more than I would pay for that content as part of the 200 channel super-plan at Time Warner cable, but I save $90, which is a win for me.

Per unit costs, in other words, go up with "a la carte" video "channels" (which would really be silos of on-demand content). Instead of paying $100 / month for 200 channels most of which they never watch (an option which still may exist in some form), users of an "a la carte" plan would pay $50 - $60 for 10-15 sources of content. They save 40 bucks, and producers of those 10-15 channels get much more revenue per unit.

It's a "nice to have" if content companies could agree on common standards for content streaming and manipulation. This would lead to "aggregator" applications that make surfing across content sources easy (which constitutes much of the appeal of a Netflix or a Hulu). However, given that content companies will likely want more control over the customer relationship than they were willing to accept before (a result of the Internet), I think it could be more an iPhone "app" approach, where different sources of content create custom apps that stream their content in a custom fashion. If it works on mobile phones, it can work on the biggest display surface in the house.

The opportunity for a common payment gateway seems one area where third parties could get a cut of the revenue. Providers of streaming infrastructure will also make money, as lots of content companies are unlikely to want to manage their own streaming datacenter. Likewise, owners of popular distribution endpoints like the XBOX and Sony Playstation can also levy charges, much as Apple does with the iPhone. It's hard to get users to stick yet another "box" onto their TV. Companies like Microsoft and Sony have used the impulse to play computer games as a trojan horse through which to get high-powered computers attached to TV sets.

Most money would flow to content companies. However, the numbers who watch television are much larger than those who surf the Internet. Volume is the name of the game with television, and even small fees per subscriber can result in massive revenues.

Would that make more money than the current content relationship with cable television providers? If the market for cable TV is what it was ten years ago, that would be harder to do. Today, however, the current model is starting to fall apart. It's growing increasingly difficult to get large audiences for major budget TV shows, resulting in a rush to cheaper-to-produce reality TV shows. Plus, competition from Internet content - and not just of the video variety - is already cutting into TV watching time. Studies show that iPad owners end up watching LESS TV, opting instead to spend more of their time on Facebook or emailing friends than watching the "boob tube."

Starz decision to cut itself free of Netflix is a sign of the pressure companies like Starz are under to defend older business models. However, starving Netflix won't change the fact that consumers have ever more ways to entertain themselves at home in the evening. They'll have to find some way to reach customers over the Internet, even if the road doesn't pass by way of Netflix servers.

Of course, now that Oracle owns the patents and copyrights related to Java (a technology originally created by Sun), they have gone after Google with a greedy vengeance, chasing the revenue potential to be found in Google's use of Java in Android. With the real possibility that Oracle could win billions, both in terms of immediate penalties and from ongoing fees derived from the growing success of the Android platform, $7.4 billion would have been a bargain for Google.

Oracle's push to derive revenue from Android isn't the only reason Google should have bought Sun. Rather, it was a strategic error that deprives Google of a standard software development platform at a time when the platform landscape is in flux, shaken in recent years by a device revolution that has driven Apple - and Android - to new heights.

To be fair, mergers have a long history of going horribly wrong. Microsoft is often the poster child for this, which was part of the reason I opposed Microsoft's attempted purchase of Yahoo. The WebTV purchase eventually led to Microsoft IPTV / Mediaroom, though only if you think "lead" means to take 8+ years to get to a point where you have a viable IPTV platform built around technology that was at right angles to other TV and video-related efforts at the company. The textbook case of a failed merger, however, is surely Microsoft's $500 million purchase of Danger, a company co-founded by Andy Rubin, the guy who now manages Android at Google. Danger's resources were focused entirely on the ill-fated KIN, a device that was a distraction at a time when Microsoft should have had a laser focus on Windows Phone 7.

Mergers don't always run off the rails. Google's purchase of YouTube for $1 billion can be labeled a success. Granted, bandwidth costs make it very hard for Google to make a profit from YouTube, but YouTube's status as the de facto source of Internet video has surely given Google opportunities in other areas. Access to YouTube is an essential feature in both IP-enabled televisions and smartphones.

And, though Stephen J. Vaughn surely disagrees, I think Skype could prove a good purchase. It's hard to build a brand that people associate with voice and video communications as strong as Skype, and the fact that the Skype protocol is strange matters to end users about as much as the twists in the plumbing snaking through their walls. I think Skype, potentially, could offer the same advantages to Microsoft that YouTube offers to Google, at least in the realm of audio and video communications. Of course, between potentiality and actuality there are chasms filled with rocks and alligators, so we'll see how things proceed.

A Google purchase of Sun Microsystems would have served as a big boost to Google's software platform ambitions. Solaris probably mattered little to Google, and perhaps could have been spun off to a company who cared more about custom hardware (Oracle being a prime candidate). Sun's software was what really mattered, and the software Sun created or owned would have given them a strong development API that rivals .NET or Objective-C / Cocoa that was fully owned by them, as well have provided a strong office productivity suite that could be augmented to complement their online word processing tools in unique ways. Those two aspects would be real weapons against Microsoft, striking as they did at the core of the Microsoft revenue machine (the Windows platform, and Office).

Had Google owned Java, Google could have given it a special place as an API, helping to boost popularity of an already popular technology. Most programmers emerging from computer science departments have strong familiarity with the platform, and Java has a strong presence in multiple industry segments, from servers through televisions and mobile devices. Google certainly wouldn't cease to support other development technologies, or stop pushing web interfaces as the way to make client applications. However, even on the client, there is still much value to be derived from locally-resident applications. Andy Rubin and the Android team understood that, which is why they chose Java as a development technology and not a wrapper around HTML / CSS / Javascript, as Palm did with Web OS.

The timing for such a positioning couldn't have been better. Microsoft is currently on the back foot in both phones and tablets. The platforms that have come to define the future of computing aren't emerging from Microsoft labs.

Further, Microsoft is preparing for a major evolution in their UI strategy that has put strain on their normally strong relations with developers. Microsoft's recent unveiling of concepts underpinning its new Windows 8 excited a lot of people. The opening screen will support applications written in HTML, CSS and Javascript, which is quite interesting and an important step forward. Windows developers, however, noticed the omission of any mention of .NET, creating the impression that .NET applications wouldn't be first-class citizens on the new Windows 8 desktop. Incomprehensibly, Microsoft refuses to confirm or deny whether this is, in fact, the case.

Perhaps, as many have noted, this is all a colossal bit of miscommunication. Yet, Microsoft is normally quite good at developer communications, making this "misstep" out of character, lending credence to the notion that they are seriously contemplating orphaning aspect of their .NET client story. As Tim Anderson at The Register recently stated, "From the outside, it still looks as if Microsoft's Server and Tools division is pulling one way, and the Windows team the other." As a former Microsoft employee, I always found it astounding how poorly different product teams cooperated with each other. The fears of the .NET development community seems well placed.

Microsoft's pain, however, could have been Google's gain. Internecine struggles at its Redmond-based competitor would present a golden opportunity, had Google owned a platform they could present as an alternative.

Google wants to be the platform for the Internet age. Its focus on browsers is part of that, but clearly, the success of Android moves the focus even more firmly in Google's direction. Every platform company needs a standard API. Apple has Objective-C and Cocoa. Microsoft has .NET, even if they have a hard time forcing internal teams to hew the line on that. Google could have had Java. Given the generally favorable impression the open source community has of Google, they could have directed development efforts atop Java in directions useful to Google.

A similar analysis applies to OpenOffice, an open source word processing suite that Sun bought in 1999 under the StarOffice name.

To be frank, OpenOffice hasn't made much of a dent in the dominance of Microsoft Office. That, however, doesn't mean it isn't a useful tool to help to erode the importance of a product that is a source of a large share of Microsoft revenue. Owning the copyrights to Open Office would give them the power to guide its development to align with Google's cloud-based document editing tools. It would give them a strong suite of offline business productivity tools, and as with Java, Google would likely have had considerable success in steering the community down a path that aligns well with Google's cloud strategy.

Google is certainly not going to fall over from any settlement, forced or otherwise, with Oracle. However, the fact that the owner of Java is an antagonist makes it less likely Google will standardize in any real way on Java. That's a shame, as Java is good technology that would benefit from a big company like Google backing it with real money.

It took nearly a decade for .NET to entrench itself in any real way as the standard platform for Windows development...and even then, it still hasn't completely displaced traditional WIN32. Objective-C and Cocoa has been around even longer by way of NextStep. It takes time, in other words, to establish a platform. Quite simply, Google won't have time to make a real alternative on its own. Their only chance was with Java, and that chance was missed.

Capitalism, in other words, isn't economic anarchy. It requires the creation of walls and barriers that guide human productive activity in useful directions. It's a framework, built on rules created and enforced by government, that is as artificial as the gleaming reflective skyscrapers in downtown Los Angeles.

Granted, Capitalism is designed to harness natural impulses. Humans tend to be very good at focusing on the things that affect them directly, an impulse that has been described as "selfish" by some economists, but is really just a reflection of the human condition. We are, for all intents and purposes, ships sailing alone in life, and though we may lash ourselves to other vessels periodically (my wife may resent that comparison), our experiences are still uniquely our own. No outside entity can gather the same level information about our wants, needs and requirements, and that's why central planning boards have a hard time out-thinking the collective rationality of individual buyers and sellers. Those vessels navigate the economic seas armed with more accurate information than any third party could possibly collect. That is, in one paragraph, the essence of Austrian Economist Ludwig Von Mises criticism of Socialism.

But therein lies the paradox of Capitalism. Yes, you need to respect the collective decision-making power of the masses, as it has the most accurate information upon which to base choices. On the other hand, you must have a structure that channels those impulses. If that wasn't the case, Somalia with its absence of government would be a Capitalist paradise. The walls that guide the capitalist mice through the maze are as essential to the functioning of capitalism as the mouse's desire to find that yummy cheese.

There is a point to all of this, and it is that, in my humble opinion, Speaker of the House John Boehner (R-OH) and the entire Tea Party-inspired Republican party have fetishized one critical aspect of Capitalism as if it was the only thing that matters. I spoke in a previous article about fixating on the engine to the exclusion of the wheels, chassis and steering wheel (among other things). Just to add to my metaphorical heap, I think the current Republican stance on net neutrality is like telling a long distance runners to eat carbohydrates exclusively, all the while ignoring the fact that most keel over in a few weeks from scurvy or some other vitamin deficiency.

As I explained in that previous article, ISPs and providers of network access have a real need to make money from their infrastructure. If they don't, bandwidth constraints tighten rather rapidly as providers have little incentive to boost capacity to support the massive shift in user behavior precipitated by rapid growth in the consumption of Internet video. I'm contributing to the bandwidth problem, as I have cut the chord to subscription cable services, replacing my television experience with what I can stream through my XBOX 360 (your mileage may vary; I have a second child on the way, so it suits me perfectly).

There is, however, an inherent conflict of interests. Carriers have a strong economic motivation to do things to hinder competitors like Netflix who are "stealing" away subscribers from their built-in video streaming options. They don't even have to do something so crude as banning access to Netflix servers. They can just price things such that Netflix, as an alternative, is uneconomical. Don't think carriers would do that? Did you think banks would erase the risk premium on bad loans by packaging them into securities that were sold to Icelandic pensioners (among others)?

It's a simple and obvious choke point. Carriers control the data pipe that leads into your home. Due to the difficulties of laying parallel wires that serve the same customers, most users have, if they are lucky (and many aren't), only two credible alternatives for fixed-line broadband. That is, by any standard, a monopoly position as unassailable as the oil pipeline's control over the distribution of an essential source of power across this country (which is why Reagan turned them into common carriers). Why wouldn't it makes sense to make sure carriers can't abuse that position?

Arguing that the FCC's rules aren't properly designed to do what they aim to do is one thing. What the Republicans are arguing, however, is essentially that the problem does not exist, couching it in soft, gauzy words like "freedom" and "constitution" to hide the fact that economic goals aren't their primary consideration. Badly understood abstract principles are what matter, and that is a serious problem.

Like I said before (and I can quote myself as much as I want): "I hate the language of rights." It obscures ability to deal with the goals we are trying to achieve, painting the battle between the different options in near-religious terms. How can one consider creating rules that prevent carriers from blocking video alternatives when what is being proposed is the functional equivalent of enslavement? It's like arguing with someone that believes that he can't get medical treatment for his child because God doesn't want him to.

As parting words to those who like to put everybody into neat and simple categories, I'm about as free market as it comes. I'm a big proponent of reducing global trade barriers, and believe that real freedom can only come when we stop hiding behind the walls of the places we were accidentally born and start thinking about the GLOBAL economy (and well being) as things that really matter. Sitting in my blog someday pile is a response to David Gewirtz' ridiculous notion that Apple should use robots to replace foreign workers so that approximately 1000 Americans can replace a 100,000+ Chinese work force (which I called the Cylon solution...never mind, it isn't important). Heck, I don't even think Reagan, the man who pushed through the biggest amnesty of illegal immigrants in this nation's history and was a driving force in the global free trade negotiations that led to the WTO, would have disagreed with me.

I'm a free trade, global freedom advocate. I just happen to understand what in the hell makes capitalism work, and it isn't some blind devotion to the notion of the invisible hand. If that was the case, Japan's MITI program wouldn't have built all the major Japanese electronic manufacturers from the dust of WWII, Korea's Chaebol wouldn't have given us Samsung and LG, America's university system wouldn't be the best in the world (18 of the top 20 are American, and many of those are public), and a simple thing like turning oil pipelines into regulated common carriers wouldn't have made natural gas competitive. Granted, Japan and Korea supported their favored industries for too long, and there is always a limit to what government should do in education (K-12 education in the US is a marked contrast to our experience at the university level), but the principle stands. Government is an essential component of capitalism, and all the gross simplifications won't change that.

The invisible hand, in other words, is a force that only functions properly if provided the right context...and context takes work. Markets exist only in the presence of sensible regulations designed by smart people who have the incredibly difficult task of designing rules that guide the individual choices of billions of economic actors in useful directions. I don't pretend that is a simple thing to do, but I reject categorically Republican willful refusal to even try.

Absence of government isn't economic nirvana. It's Somalia. I sometimes wonder if today's Republican party understands that.

Cannibalization is already taking place (though it seems to be hitting Macs hardest, not surprisingly), and the netbook market is being eaten whole by tablet computers. That might explain former netbook leader Acer's new-found interest in the tablet form factor.

Netbooks turned out to be less of a threat to Microsoft than was originally thought, as most ended up running some variant of Windows, even if it was usually the lower cost Windows XP. Its tablet replacement, however, is in a different platform universe. iPad, based on Mac OS X, still accounts for over 90% of the market for tablets (not surprisingly, as they ignited the craze with the rollout of the iPad), and Linux-based Android doesn't give Microsoft much love.

It's understandable, then, for everyone to be screaming for Microsoft to release a tablet challenger. They were knocked at CES for offering little more than plans to bring Windows to low-power ARM processors, a shift that is only likely to materialize in 2012. According to Peter Bright at Ars Technica, fixating on power consumption is spectacularly besides the point, as Microsoft's real problem in the tablet space isn't short battery life but the lack of a user interface expressly designed for touch.

Clearly, the newly resurgent tablet space should be cause for concern in Redmond. Panic, however, can be more destructive than delay, especially if it wastes resources that could have been used more effectively elsewhere. That's why I still think Microsoft should wait a bit before fielding a true competitor to the iPad.

Don't get me wrong...I think it's absolutely critical that Microsoft field something in the not-too-distant future. I just think that getting it right is more important than getting it tomorrow. Perhaps my perspective is somewhat tailored by fire season in Los Angeles. When there are multiple fires with which to contend, sometimes you have to pick your battles, even if it leaves a few expensive houses in the hills a bit crispy.

I still think Microsoft's first priority in portable devices should be to get its mobile phone house in order. Microsoft has an uphill battle to fight in mobile phones, afflicted as they were by the "early entrant" curse that has hit all incumbent mobile phone vendors. Nokia, RIM, Ericsson and Motorola are all hurting, whereas the new market leaders, such as HTC, Samsung and Apple were almost non-existent in the space a mere seven years ago. The lessons learned from those early days simply don't apply today. The iPhone inflection point has had the market effect of a hydrogen bomb.

Clearly, the sales numbers for its "strategic reset," the new Windows Phone 7 (WP7) platform, aren't where Microsoft needs them to be, as they'd be crowing about them the way they did about Kinect at CES. Or, maybe they aren't as bad as information-starved journalists imagine while floating in their pundit isolation chambers. Amazon still doesn't release real numbers on Kindle, even though most estimates claim it is selling well. The HTC HD7 is in short supply at the stores in my area, though the cause is anyone's guess.

To be fair, though, I don't think Microsoft has promoted WP7 as much as it should. Maybe they have lots of TV commercials (I don't know, all my TV is on-demand and streamed over the Internet), but when I think of BIG promotional campaign, I think of what Apple has done in Los Angeles. You can't throw a rock in this town without hitting an ad for an Apple product.

WP7 is definitely the right direction for Microsoft to take. I have an HTC HD7 AND a Nexus S, something I'm sure to talk about more in some future blog. In my experience, the WP7 device is much easier - and more fun - to use.

But irrespective of the difficulties or possibilities, a key reason to focus on WP7 is how it informs future strategy. Apple found the path to a sensible touch UI by way of building portable devices, starting with iPod, moving into phones, and blasting through the surface in a shower of money with the iPad. Microsoft followed some of that trajectory with WP7 (albeit with less financial success), as the Metro UI originated with concepts developed for its Zune media player. I think Microsoft's strategy in tablets will depend on doing something sensible in mobile.

Sun's barrier with client-side Java was that they didn't understand the client as well as the server. The same dynamic applies to portable devices, and in particular, phones. There's a lot more pressure to achieve a simple user interface in phones. Besides screen size, which of necessity are small enough to fit comfortably in one's hand, users carry their phone with them everywhere to a degree they won't with a tablet computer (well, unless you have a jacket with very big pockets). This creates learning opportunities that simply don't exist for any other type of mobile device.

For a company that hopes to continue its important role in client computing, having a credible stake of the smartphone market is absolutely critical. No other device will be used as often as a smartphone. Many of Microsoft current web service offerings, including the "Live" family of products (which are tightly integrated with WP7) and the Bing search engine, will depend on a strong showing in phones, particularly as Google uses Android as a trojan horse by which to encourage linkage to their own web service offerings.

The Windows ARM strategy, by itself, isn't much of a near-term competitor to iPad. It does signify, though, that the company is serious about unifying their fragmented client operating system story. Combined with hints that Microsoft wants to make the Metro interface a built-in shell on Windows 8, it appears Microsoft believes believes they can create a common core that can be shared across desktops and devices.

Some might find that "Windows everywhere" strategy to be so 1990s. It's worth pointing out, though, that it's the same strategy followed by its competition. Apple has extended a modified version of Mac OS X across form factors, and Google pushes Linux (by way of Android) from its backend through to mobile phones. The consistency advantages has a lot to recommend it, particularly given the massive base of products that work with desktop Windows.

Regarding the numbers, Blodget thinks that iPad could be 25% of the market for PCs in a few years (though how much of that 25% are new computer users remains to be seen; it doesn't have to consist only of cannibalization of existing sales, in other words). That's clearly a threat, though even on Blodget's numbers, 75% is still a significant beachhead from which to launch a counterattack. Such a counterattack, if done properly, would have the advantage of seamless interoperability with a large base of Windows-based computers, while bringing with it some of the real advantages of PCs...without the complexity.

In other words, Microsoft NEEDS to avoid the impulse to rush a product to market due to very real threats on the horizon (as they did, I think, with the KIN) and take the time to get it right. There is obviously danger from the "network effects" that are building up around iPad. I can't open a magazine without finding ads touting a new custom application for an iPad. On the other hand, Windows brings with it rather sizable network effects (and will even in Blodget's "several years"), provided they direct it properly.

Microsoft needs to make a tablet solution that is truly different than what is on offer from competition that will only be more formidable in a year's time. They have done it with WP7, in my opinion. Now they have to figure out a way to communicate that effectively. Microsoft should focus on the huge job they have ahead of them in phones, and give themselves time to figure out how to make the other areas of its business feed into a really compelling tablet form factor that is notable as more than just a competitor to iPad.

[ADDED Jan 21, 2011] I've had a couple of people ask what "synergies" desktop Windows has with Tablets (which is paraphrasing, as the actual question was posed as if I was stark raving mad). What I'd REALLY like is a Windows tablet with a "real" touch UI (as opposed to one that shows the Windows desktop and let's you try to use it with a finger), plus the ability to dock it so that I can attach a full-width monitor, keyboard and mouse and treat it like a desktop computer. Basically, it's still a Windows PC, but a new shell gives you a proper touch environment.

Obviously, apps would have to be written to use that new shell, and many of the applications that you might use while docked (like Visual Studio) simply wouldn't be available while in "tablet" mode (I do NOT want a touch version of Visual Studio).

I'd love if something similar could happen with a Windows Phone as well. In fact, perhaps that's what Microsoft is trying to do with the move to ARM processors. They plan to make a unified Windows platform that will serve as the baseline for all their products. That's bad news for the Windows CE team, but good news for everyone else.

I've long thought that computing devices you carry on your person are different than the beast stuck on your desk at work, or sitting in your entertainment center at home. Those devices are tools, and people identify themselves by their choice of tools about as much as they do by their choice of bookshelves. Granted, there are exceptions. People who know a lot about TVs may pride themselves on acquiring the most technically sophisticated model to add to their home entertainment center. Ordinary consumers, however, tend just to buy something functional and affordable.

Devices like mobile phones are different. As something you take on your person, it makes certain statements about you that a DVD player doesn't, but a brand-name pair of jeans or fancy handbag does. That's why I'm not sure if Android's upcoming sales gains should be viewed as a long-term permanent state of affairs. I would view it as more a transitory shift among consumers who now view Android as an exotic choice in a jungle where iPhones have become relatively common. I certainly don't see it as a permanent consolidation around Android as a platform, because smartphones aren't like desktop computers.

Think about the market for mobile phones prior to when Apple turned it upside-down. I wasn't very loyal to any one brand. Granted, I tended to purchase a disproportionate number of Nokia devices, but that might have been due to the preponderance of such devices at stores. Even so, I wouldn't stick with the same Nokia phone over the years, and I would intersperse it with another brand whenever it struck my fancy. I used to be a fan of Volkswagen, but now I favor Honda. The next time I buy a car, who knows what I'll buy?

Just as different brands of clothes move in and out of fashion, will smartphones brands and platforms move in and out of favor with consumers?

Network effects are the Mule in the psychohistorical ledger, to some extent (if you don't know what I'm talking about, you need to read more Isaac Asimov), but past trends do offer some support for the theory. If I'm right, though, then Apple is well positioned to thrive in such a market, with stores strategically placed in the best shopping locations. Proximity to fashion brands builds subliminal association, and Steve Jobs is the only person on Earth who realized it (well, at least was the first to capitalize on it). Best Buy might be useful venue for sales of computing tools, but in a world with shifting trends catering to those who don't strongly identify with the technology (which likely doesn't include any of the people reading this post), it isn't going to keep a brand strong.

On the other hand, a risk factor for Apple could be that there is only one style of iPhone. Though it makes life easier for developers, it does create little scope for variability. Would everyone in the world want to own the same model of BMW?

Granted, Apple is fairly religious about creating a new iPhone version every year, which is smart if you insist on having only one variety of smartphone device. However, their approach is a bit like being a fashion designer for Orthodox Jews (you can have any color you want, so long as its black). Fortunately, if that does prove a problem, Apple can create more shapes and sizes of iPhone, much as they did with the iPod. Though different form factors might make life more complicated for developers, it would allow consumers to express taste differences while remaining firmly in the Apple spacetime continuum.

If consumers do treat smartphones like a fashion accessory, it does provide hope for newer entrants, such as Windows Phone 7 (new with the WP7 platform, not new as a participant in the category), or lagging leaders, such as Blackberry. In Blackberry's case, Research in Motion needs to adapt to the changed nature of smartphone buyers. Though enterprises and businesses were once the mainstay of the smartphone market, those days are long past. Business spending will still move the needle, but people want more than a glorified tether to their worklife from a smartphone platform. Blackberry is moving in that direction, but like Microsoft, started life as a company focused on the needs of business users. That's a difficult DNA to replace.

As for WP7, clearly, Microsoft is late to the party with a consumer-focused offering. Even so, if party trends shift from year to year, there is an opening for Microsoft, provided they keep improving the platform and adding features that make them different. When Android first launched, its sales numbers wouldn't lead one to believe that it would be the "shiny new thing" of 2011. There certainly seems plenty of scope for tie-ins to other products in the Microsoft catalog, provided the company can herd the fractious cats who populate the competing divisions within the company in a common direction (as a former employee, I know that is no easy feat).

Clearly, focusing on Best Buy, or mobile phone shops featuring rows of hollow devices with paper screen inserts, is the wrong way to go about building a fashionable brand. Those new Microsoft stores popping up like slow-growing mushrooms across the US may be rather important to Microsoft's personal device future. They would, at least, give Microsoft the power to control its own marketing. Getting the marketing right is another issue entirely, and a company that was traditionally focused on business users has more barriers in that regard.

Some have argued that having multiple WP7 devices just splinters attention for Microsoft's new mobile platform, pointing to the clear and focused iPhone advertisements as an example. In the short term, the naysayers have a point. Marketing one iPhone is a heck of a lot easier than marketing nine WP7 devices. In the long term, though, having more varieties of the same underlying platform caters to more "statements of personal identity" than one device. If Microsoft can provide a degree of development consistency while at the same time offering the variety that leaves more room for personal expression, they can boost their market share, once they manage the right combination of features and marketing to catch that fashion wave.

Of course, as everyone knows, waves eventually dissipate. I think it is highly likely that the mobile companies that are popular today will just as quickly find themselves less popular as the fashion jet stream ebbs and flows.

Major brands are important, and if managed properly create certain expectations of quality and experience which provides them a strong foundation upon which to withstand the shifts. However, there will we never be a "Windows" of the smartphone world, in the sense of one platform that accounts for 90+ percent of the market for a particular computing product category. And, just as happens with clothes, I can easily see there being a lot more variability in market share over time, particularly with growing depth and breadth of functionality offered by web development environments. The more browsers can do on phones, the less you need to turn to custom "apps."

That's good for consumers, as it means smartphones could have a higher natural level of competition. That means staff lawyers won't have to spend their time fending off antitrust investigations. That leaves them free to charge after other private companies wielding patent libraries as jousting sticks.

Oh well...the smartphone gods giveth, and they taketh away.

Of course, there are less overt ways to favor one's own offerings over that of a competitor. Comcast recently increased what L3 pays to send additional data over its network. L3, as it turns out, is now Netflix' chosen content delivery network. Comcast has also expressed a desire to institute bandwidth caps at some point, though has backed off near-term plans due to the negative publicity the declarations generated.

The problem for Comcast is one of vested interest. They have strong incentives to raise prices and institute caps that limit competition to their own fixed-line video services. This is what raises the hackles of net neutrality advocates, as it enables carriers to favor their own services without anything so obvious as slowing down packets from Netflix.

Preventing gatekeepers from using their power to lock-out competitors is certainly a noble goal. Even Ronald Reagan, a man touted by many on the right as a paragon of free market virtue, opted to turn oil pipeline companies - which are, in essence, the gatekeeper to oil consumers all across the United States - into "common carriers." This created an open market for oil over privately owned, but highly regulated, transmission pipes.

On the other hand, carriers have to generate a return on investment in order to continue to upgrade their networks. This may become a problem quite soon, if a Juniper Networks report is a fair approximation of reality.

Quoting "Will Video Kill the Internet, Too," from the Dec. 6 issue of Bloomberg Businessweek:

The report predicts that carriers such as AT&T and Comcast will see Internet revenues grow by 5 percent a year through 2020. Meanwhile, traffic will surge by 27 percent annually, and carriers will need to increase their investments by 20 percent a year to keep up with demand. By this math, the carrier's business models break down in 2014, when the total investment needed exceeds revenue growth.

By 2014, video will account for more than 90% of Internet traffic. As Michael Hatfield, founder of Cyan Optics, noted in the article, "this is the most dramatic change in the network that has ever occurred."

By way of context, Juniper Networks is a vendor of networking equipment, and thus would stand to gain a lot from carriers convinced they had to buy large stacks of equipment to keep up with galloping bandwidth demand. On the other hand, the fact that Juniper Networks has an interest in painting the issue in the darkest colors doesn't mean they aren't identifying a real problem. An explosion in bandwidth demand is still very real, whether or not the economic tipping point happens in 2014, 2017 or 2020.

This has obvious ramifications to Netflix, a company whose future growth is linked to its fast-growing video streaming service. It also has ramifications for companies like Google (with Google TV) or Microsoft, who is currently in negotiations to roll out an Internet TV service for its XBOX Live and Media Center products. It also would affect me, personally, as I am one of those "cord cutters" who gave up subscription cable services in favor of video streamed over the Internet to my television (in my case, by way of my XBOX 360).

I still on occasion watch some of the over-the-air HD channels in Los Angeles, though I use Netflix's on-demand video streaming service much more frequently. When Hulu finally comes to the XBOX, I am likely to pay the subscription fee, as it has the advantage of offering a number of shows the day after they are broadcast. On demand TV works perfectly for a guy who spends all day programming, most of the evening chasing his 17-month old daughter, and then has only an hour or two later in the evening to do other things.

In the past, I have vacillated somewhat in my stance on net neutrality. My instincts run in favor of the principles espoused by net neutrality advocates, because it is a valid economic objective to avoid media oligopolies (which is really a duopoly in many places in the US, split as it is between cable operators and, increasingly, phone networks). Just as it's good that oil pipelines are prevented from playing the role of highly-profitable gatekeeper to the transmission of oil, it would be spectacular if I could pick and choose my source of media "a la carte" from thousands of providers around the world. Net neutrality would help to ensure that future materialized.

On the other hand, my economics side is very aware of the incentives principle, and network providers need profits to incentivize them to grow the network to support a video streaming future. Net neutrality advocate Google seems to concede that point, at least in part. The overload point has already been reached for mobile networks, which is the reason they proposed to exempt mobile networks from net neutrality mandates. Knowing where their "bread is buttered," however, they insisted in full-on net neutrality for fixed-line providers, an argument that furthers their goal of developing into an Internet video service based around YouTube, and is easier to make now while carrier economics are still sound.

Net neutrality advocates often speak of the right of consumers to access any Internet service they want without interference by carriers. Those on the other side speak of property rights, and the incentives needed to build the network to support more data.

I hate the language of rights, favoring a more goal-oriented approach. The goal should be to maximize choice AND maintain incentives, something that is only possible if the people making the decisions aren't trapped by the black-and-white language of "rights."

It is good to have lots of choice in terms of media services. It is also good to maintain the profits necessary to incentivize carriers to build out their network.

We are heading towards a world of bandwidth caps on even fixed-line networks, barring the development of some amazing new technology that will make streamed video take up less bandwidth, or widen the pipe faster and at less cost. If we want to ensure that competitors to carrier-offered video services are on an even playing field, then the only option is through OVERSIGHT and REGULATION.

Regulation...a dirty word to many, but so very fundamental to the proper functioning of capitalism. That, to my mind, is the biggest problem I have with some libertarians (to say "all" is unfair, as on a continuum, I can be said to share many of their views). They are like people who fixate on the engine in a car, ignoring completely that an engine on blocks doesn't do a whole heck of a lot.

Government provides the structure within which economic activity takes place. Part of that structure is rules that will attempt to maximize service choice given the constraints of a market that doesn't lend itself to hundreds of competitors naturally.

The FCC is set to vote on net neutrality rules on Dec. 21. Given the looming bandwidth crunch, it is likely to be one of their more important decisions in quite awhile.

The world of IT moves a lot faster. Imagine a programmer hit by a bus on the way to work in 2000. He goes into a 10-year coma, awaking on November 30, 2010 with a raging desire for Chicago stuffed pizza (and who wouldn't). Given that his memory of computers stops at 2000, he might be forgiven for assuming that Microsoft ruled not only desktop computers, but cell phones, tablets, tables, refrigerators, cars, and any other device that can make use of CPUs and memory chips (though he might have thought there would be several Microsoft's at the time, as he couldn't have known that Penfield Jackson's break-up ruling would be overturned by Collar-Kotelly).

The reality, of course, would be shocking to him. Who would have expected that today, Apple, a company that was nearly on its deathbed in 2000, is now the most valuable company in IT from a market capitalization standpoint, or that they would stand atop the heap in the new device category that is proving the fastest growing segment in computing?

Nobody would mistake me for a fan of Apple products, though it's hard to discount their success. I recently received a Brookstone catalog in the mail, and was astounded by how much stuff there is that touts its compatibility with iPod, iPhone and iPad. A recent article on Ars Technica touted iPads and MacBooks as this Christmas' "goods of desire." It's all-but impossible to escape the Apple logo around LA these days, whether it glows from the back of a laptop perched on a table in a local coffee bar or is emblazoned on a gigantic ad along the Sunset Strip (though Apple seems to have given up the gigantic 12-story ad along Santa Monica, something you could easily see from the Hollywood sign).

It seems a position that will be difficult for anyone to displace. Google certainly seems to have gained traction for Android, and as Informa noted in a presentation I saw a few weeks ago in Puerto Rico, Android will balloon in market share in the coming years. Market share, however, doesn't necessarily translate into revenue for application developers, a point John Gruber made in a recent post on his blog. Apple seems to have collected for itself that segment of phone users who like to customize their phones. That's a useful trick, and goes a long way towards explaining why Apple continues to have overwhelming dominance in terms of the number of applications available for an iPhone. As Gruber noted, developers go where the money is, and the people who are willing to part with it seem to gravitate around Apple products.

That, to my mind, is not surprising, as the thing that Apple understood long before any other company was that devices that you carry on your person are different. People who like to make statements about themselves tend to gravitate towards products that specialize in cultivating what Thorstein Veblen would call "invidious distinction." This is why I don't think Apple should lose much sleep over Android's market share gains. Apple shouldn't want to grow its share too high, as that undermines the statement ownership of an Apple product makes. So long as they keep investing their products with that "something special," people will still want to upgrade their phones to the latest every year, which appears to be a unique characteristic of iPhone users. Shortly after iPhone 4 came out, I was surprised how many people walking the streets in LA converted their version 3 devices to the new platform.

Who would have thought so much could have come from dominance in digital music players?

From hindsight, it makes a lot of sense. Back in the day, I used to argue with proponents of Java (and I counted myself as one at the time) whether Sun would have much success in the client space with its new Java runtime. I thought they wouldn't, as Sun, as a server company, didn't understand the needs of client environments very well.

You learn what kinds of things customers need and want by trying your hand at the market. Apple's experience with the iPod taught them how to make devices that are easy to use and personally identifiable. Well, to be honest, personally identifiable was more part of Apple's DNA than any other company (candy-colored iMacs could only have come from Apple), but easy to use takes work. The iPod was their laboratory, and iPhone and iPad sprung from its beakers spraying money in all directions.

Cultivating the iPod was an interesting way to displace what everyone thought was Microsoft's unshakable grip on the world of computers...though I hesitate to say Jobs was completely aware of the potential, even as I credit him for the directions the company took. Apple didn't invest most of its energies in making a frontal assault on the PC dominance of Microsoft, a space to which the old Apple confined itself almost exclusively. Instead, they created an entirely new market segment, one that didn't have a well-entrenched competitor, built it into a powerhouse, and used that as a beachhead from which to launch into phones and tablet devices.

I may grumble about it, but it worked. Android might squeeze Apple, but they will never displace it in phones. And in tablets? Heck, they seem on their way to running away with the category the way they did with iPods. De facto standards are hard to displace...just ask Microsoft.

As much as I hate to admit it, Objective-C and Cocoa are going to be important tools in my client development toolbox. Server technologies will always be in demand, and those are far beyond the control of a company that is essentially a force on the client. Web skills are also not to be displaced, as every device must support web apps as a baseline feature. But if you are doing anything more advanced, well, Apple has a right to demand you pay attention to their APIs. Developers know that, and the more that sinks in, the more entrenched Apple and its APIs become in the marketplace.

This is my company's first foray into Latin America after spending the past year and a half focusing almost exclusively on Africa. In Africa, we have approximately 12-15 licensees in various stages of development (with more popping up every month). Our biggest live instance is GloWorld in Nigeria, a network with around 24 million subscribers, and the product is Glo Messenger, a solution for bringing Internet communications to even low-end phones using universal protocols, such as SMS and USSD.

$10-$15 handsets are quite typical in African markets. I love to show friends a phone that a business partner picked up for me - new - in Rwanda for $10.00. It's made by a Chinese manufacturer I'd never heard of, and had an instruction manual only a fan of engrish.com could love. That silver spot on the back isn't the lens of a camera...it's paint designed to LOOK like you have a camera. The edges have some text burbling about the wonders of 3D sound (whatever the heck that is)...but there isn't a jack for headphones, and there clearly isn't a music player built into the device.

The device does make a pretty strong statement, however, about the aspirational quality of cell phones in Africa. The phone in question might not have a camera or audio playback capability, but people WANT that, and want others to think they have it.

Even that device, however, supports voice and text. This means that we can give that user the ability to send and receive email, IM messages, and interact with Facebook in a meaningful way.

Demand for Internet communications services isn't just this LA-based developer projecting my own needs and desires onto an alien environment. Rather, the demand for Internet messaging in Africa is huge, and growing rapidly, in spite of the low penetration of PCs.

The nature of that demand is changing rapidly. When we commissioned a study of relative market share of Instant messaging clients in Kenya, the number one IM client was Yahoo Messenger, followed by Google Talk, followed by Facebook IM (with MSN Messenger a distant fourth). The Facebook result was suprising to me, as at the time Facebook IM was little more than a javascript and HTML widget built into the sidebar of the Facebook web page (and that is still how most people use it, even though it now has an XMPP client capability). Today, however, Facebook IM is far and away the number one IM client in Kenya.

Facebook is challenging Google on a number of fronts in the US, but they are doing it just as strongly around the world. Here's an interesting statistic I learned at the CARICAM conference: there are 4 million people in Puerto Rico, and 1.7 million Facebook users there...meaning that most of the adult population has a Facebook account. A piece of local culture information which might explain that figure is that news shows usually start with what I can only describe as gossip (a fact related to me by a Puerto Rican conference attendee, and confirmed by watching the local news broadcast). That might explain why Facebook is so wildly successful in the territory, as who better than your Facebook friends to exchange such information.

Facebook is changing the face of the Internet like a Carribean hurricane sweeping across the tiny islands which dot the water in the run-up to Miami airport (I am now editing this in the plane). I can't imagine Google, who for well deserved reasons would consider itself the premier Internet services company, thought they would be facing an inflection point quite so early in their life as a company. The technology wheel spins oh so very fast...

Smartphones are an aspirational good in much of Africa, and though true smartphones constitute a very small share of the total market for phones, people will spend a significant amount of money relative to their incomes to acquire something higher up the cell phone feature continuum. In Kenya, estimates I saw six months ago claimed that about 20% of subscribers have 3G-capable mobile device. Only about 10% of that number, however, have a data plan.

In Latin America, Smartphone penetration rates are around 6%, on average, according to Informa. Even though it is growing fast, it is still expected that smartphone penetration rates isn't going to be more than 25% by 2015. That's good news for us, as demand for our services is necessarily strongest among those who don't have data plan alternatives.

We are finding, however, that even people with "smart" devices use our service. The reason is simplicity and immediacy. People will check their Facebook page from their iPhones, to be sure, but what if you want to respond, in real time, to a message posted to your wall, add a comment in response (by just responding to the incoming text), and start a real-time dialogue with the person who is likely sitting in front of their computer surfing the Facebook web site? You could open the Facebook app you installed, but that isn't a real-time interaction the way SMS communication is. We let you do that, as well as stay online with multiple IM clients and receive email. You wouldn't want to run all that simultaneously on an iPhone.

On the smartphone front, Informa predicted that iPhone's market share would be squeezed over the coming years, particularly by Android, whose share of the total is ballooning in any predictive market share graph (and did quite noticably in Informa's diagram). Don't get me wrong - the size of the total market is inflating quite rapidly and every provider of cell phone devices with a credible ownership of some part of the market rubber ball will grow with it. In other words, even though their share might shrink somewhat from a mindshare percentage standpoint, shipments will still go up every year because the total size of the market continues to grow quite fast.

I don't think, however, that the trend will continue ad infinitum, as I explained in a bullet point in my presentation. Android will never be to cell phones what Microsoft and Windows are to PCs, because phones aren't like PCs. PCs and Laptops are essentially tools, and people don't make personal statements about themselves with tools (though Apple works hard to bend that rule, at least in laptops, which ARE carried on your person).

Devices you carry on your person are different, as they express more about you as a person (this is something Apple understands intuitively). In that context, phones - particularly the expensive smart variety - share certain demand characteristics with cars, clothes and handbags. That militates against one phone platform ruling over all. Android helps to broaden its appeal by letting manufacturers create a diverse mix of devices (Blackberry does the same), but I still don't see any of those platforms achieving over 90% market share Microsoft acquired for Windows (which many in this forum would likely argue is a good thing).

So, sorry, everyone, platform fragmentation in smartphones is here to stay...at least, in my opinion.

Of separate note: conventional wisdom in the US (and ZDNet) seems to be that Blackberry is doomed, run over by the twin juggernauts of iPhone and Android. One thing many US pundits don't realize, however, is just how effective Research in Motion (maker of the Blackberry phone) has been at penetrating third world markets. Blackberry is everywhere in Africa, and though it is far from a majority of total cell phones used on a network, it has a very strong showing among those who spring for a data plan. In parts of Latin America, such as Venezuela, Colombia and Panama, Blackberry is far and away the number one smartphone platform.

In that context, Blackberry Messenger - the blackberry-to-blackberry chat service that combines some of the benefits of SMS (the instantaneous notification quality, the built-in aspect) with the metadata of instant messaging (presence information, profile icons, etc), is quite brilliant. When I first saw it awhile back, I wondered what use people would have for a Blackberry - exclusive chat network. However, Blackberry Messenger is proving in many markets to be an important attractor, both for new users who want to chat with their Blackberry-owning friends (which in many countries, may be your entire peer group), and as a "sticky" service that makes it hard to wander to a new home on another rplatform.

In Venezuela, people ask what your BBM ID is. According to someone I met at the conference, kids buy Blackberries because of Blackberry Messenger, and all of her peers have Blackberries. Admittedly, she works in telecommunications and is likely paid a decent salary, but Blackberry has nowhere near the same mindshare in the US or the UK, as examples.

Blackberry's success with Blackberry messenger is interesting, but I don't know that a closed network model would work on a platform like the iPhone. There's a lot more variety in the Blackberry product family, both from a screen size and a pricing standpoint. This puts a Blackberry within the reach of a wider swath of mobile subscribers. iPhone, in contrast, has one device, and it is consistently expensive around the world...particularly in countries that don't subsidize cell phones (subsidization is not as common throughout Africa, usually because most people are pre-pay). Facetime might become interesting for iPhone to iPhone users, but iPhone will always be a very profitable but minority segment of the market (and, on current trends, is likely to be an exclusively developed-world phenomenon, which if you are shooting for the top of the luxury good heap - as I think Apple is - is no bad thing). This will constrain the utility of an iPhone-only chat service.

Anyway, those are just some thoughts based on recent events in a market area from which I earn a living. I'll try to provide more such nuggets of life on the edges of the technology sphere as they occur to me (it's certainly easier to bang out blogs on this, as it relates to things I spend every waking hour thinking about).

Of course, it is hard to me to stay silent on issues that raise the hackles of technology geeks back home. Platform battles are fun, and I've been chatting with ZDNet users about them for over ten years.

I'll just not do it today.

That's a big change, but clearly, change is what the E&D division needs. Non-PC devices are the fastest growing segment of computing today. It is the base upon which Apple's incredible market capitalization gains have been built (which, obviously, are due to Apple's wild success in creating new categories of devices). Entertainment & Devices are critical to the future of Microsoft as a company. It's failure to grow into a strong source of profit puts at risk Microsoft's ability to remain influential in the coming decade.

Bloggers tend to be people with strong opinions, and I am no exception. I also used to work in the E&D division at Microsoft, which makes the impulse to express my views on this subject even keener. Therefore, excuse my boldness, but I have a few suggestions to offer to the new people in charge. This is hardly a comprehensive list, and may be unfairly tilted towards the TV space due to my former role at Mediaroom. In my defense, though, next to Microsoft's mobile phone strategy, I think television is the most important (and furthest along) of Microsoft's non-PC businesses.

These ideas don't ask Microsoft to strike off in radical new product directions, as would be the case if they were to attempt a near-term challenge to the iPad (which, as I explain later, would be wasted effort at this point). They just ask Microsoft to embrace what they do well, build on what they already have, and stay focused on the "right angle" turns (i.e. Windows Phone 7) that are critical near-term priorities.

1. Leverage XBOX properly as a living room platform

Though the XBOX 360 didn't end up the number one console this generation, it did manage to beat Sony, which given the dominance of the PS2 in the last generation's console wars, seemed an almost insurmountable task. They also have avoided a "me, too" approach in its embrace of the motion controller concept that was key to Nintendo's success. Project Natal's "controller-free" controller is an innovative way to bring motion interactivity to the XBOX, and I'm looking forward to updates on the technology at this year's E3.

It's fairly clear that Microsoft has achieved its original goal of becoming a credible presence in console gaming. It is now time to focus more intensely on growing beyond it.

Moving beyond gaming has grown in importance given recent developments. Google TV builds on the Android platform, and aims first and foremost to improve the TV experience by melding it with the Internet. Google is almost certain, however, not to confine themselves to just television services. Games will be an important component, and though they may not be the mega-productions targeted at the current crop of consoles (at least, in the near term), they may be enough to attract the casual gamer, a group of users that Nintendo has proven is larger than the "hard core" gamers that were the initial focus of Microsoft and Sony.

Google isn't alone as a competitor, however. Though devices like the Roku offers a platform for television enhancements, the growing number of DVD players offering integration with Amazon's "On Demand" video store is notable. Television-focused Internet services are finding their way onto a growing array of TV attached devices.

Fortunately, Microsoft has a strong and growing casual game story, boosted as it was by the XNA platform and an XBOX Live in-console store that enables small companies and individuals to offer gaming products direct to consumers. Likewise, XBOX hardware can reach gaming heights that it will take Google some time to match. Games, in other words, aren't the problem. The problem is that games constitute only a fraction of what is possible with that large (and now, comparatively high-resolution) display area that sits in the middle of most people's homes. Focusing on just that fraction creates a competitive chink in the armor that could give Google (among others) the competitive toe-hold they need to lever up to become something much more.

When XBOX was the upstart challenger, focusing on gaming to the exclusion of all else made sense. It was and still is, however, a bit like balancing your checkbook with a supercomputer. Someone is bound to come along and use it more effectively than you.

Microsoft has already convinced millions to pay a subscription fee just to be able to interact with other users. In fact, they have more networked gaming users than any of the other major console manufacturers. XBOX is, for all intents and purposes, the premier networked gaming console.

Microsoft should build on that. As a first effort, they need to offer more reasons for non-gamers to pay the XBOX Live fee. It took me years to get around to buying an XBOX Live subscription, because I don't play games enough to care about playing other people over the Internet (who would, frankly, destroy me, as I don't play enough to be particularly good at it). What pushed me over the edge was Netflix. If there were a lot more services like that, I would have taken the plunge years ago.

Content deals for services automatically included as part of an XBOX Live subscription will certainly play a role. I've long thought, however, that the XBOX team paid insufficient attention to the kind of thing that drove the popularity of desktop Windows - third party applications.

Yes, third parties write GAMES for the platform. Third parties, however, have a hard time making interesting non-game applications given the extreme limits Microsoft places on network access...except when you are "favored" provider like Facebook, Netflix or Last.fm. That a colossal missed opportunity, in my opinion, which prevents Microsoft from keeping pace with innovation in the "living room automation" space.

Unleashing network access to third party applications doesn't mean that Microsoft would have to erase the XBOX Live "pay gate," though growing competition might put some pressure on it. I do think people would pay an access fee if they felt they derived real value from it, and it was kept "reasonable" ($50 / year, the current price of an XBOX Live Gold Subscription, qualifies as reasonable, in my opinion). The goal should be to make the world behind that gate so compelling that people will want to pay to get into it, something that is easier to achieve in television given that people are still accustomed to paying for video services (a contrast to the Internet, where people are not). That goal is only achievable if Microsoft and a handful of favored companies aren't the only ones driving innovation atop the XBOX platform.

2. Play to your strengths

This probably sounds like the guy with a hammer who views everything as a nail (I am a developer, after all), but Microsoft plays insufficiently to its own strengths. The company spent the last few decades assembling within itself some of the most well-known software engineers in the world. Clearly, one of Microsoft's key competitive advantages lies in the creation of software platforms.

Focus on this. Microsoft framework divisions are busy pumping out powerful development technology, and yet have a hell of a time getting internal divisions to actually use it. Personally, I'd love for Guthrie and his lieutenants to have the power to force wayward managers to follow a consistent development line. As a random follow-up on that, I think there needs to be a team whose only role is to analyze the software plans of various divisons in order to prevent them from accidentally reinventing, say, Session Initiation Protocol (SIP). As I intimated in a previous article, I can't figure out why Silverlight isn't being made into a mandatory component of the product strategies of every division within the company. Microsoft benefited from the company-wide adoption of COM. Silverlight standardization would provide a mutually-beneficial fabric for user interfaces that span device categories, and can be evolved by Microsoft a lot faster than HTML, CSS and Javascript.

I was surprised when Microsoft didn't focus on third-party extensibility in Zune from very early on. Likewise, as noted, the odd restrictions in the XBOX environment have never made much sense to me. If ANY company should place a premium on third-party extensibility, it is Microsoft.

Development technology by itself is clearly not enough. If it wasn't for people like Julie Larsen-Green, now in charge of the Windows user experience, the Office franchise would have hit a wall by now, and Windows 7 wouldn't have become the revenue spinner it currently is for the company. Obviously, design has to take primary importance.

But, with every WHAT comes a HOW. Good design is the WHAT. The HOW is what people like Guthrie and his collection of top-notch software engineers bring to the table.

Give the people who understand the strategy of HOW the power to impose consistency throughout the company...after the Design people figure out the WHAT. Doing the HOW properly is something that Microsoft has spent years building the necessary competencies to do. Good companies always make it a point to leverage what they already have.

3. Stay focused on getting Windows Phone 7 off the ground

One of the smartest thing Microsoft has done in quite awhile is decide NOT to do something. They canceled the Courier before it could be released as an expensive, hard-to-understand product that didn't sell and made Microsoft look like it was yet again lured down the "me, too" rabbit hole as it chased something Apple had done first.

Okay, maybe I'm being unfair to what the Courier could have been (though since it was never released, that's like saying I'm being unfair to space cruisers that visit neighboring star systems). Maybe J Allard's team had figured out an incredible two-screen UI concept that would surprise and amaze people for its simplicity. And, maybe he would have navigated the hardware economics to build a two-screen device that was within range, price-wise, of a single-screen iPad (though a certain Wayne Campbell quote involving emergent monkeys springs immediately to mind).

Distraction, however, is one of Microsoft's biggest problems, particularly given the current size of the company. Take the Kin. Microsoft probably felt the need to release the Kin because they had just spent a billion dollars buying Danger, maker of the former teeny-bop star Sidekick, in a quixotic attempt to buy their way into a consumer mobile strategy. Unfortunately, rolling the Kin out based on a still in-flux Windows Phone 7 base was a mistake, in my opinion. I think the concept was good, and I like the notion of all your media being instantly available online, but when you get an Engadget review that is as frighteningly bad as it was, it's a sure sign that you have pushed something out too early.

It would have made more sense to release something like the KIN after Windows Phone 7 had carved a place for itself in the fast-growing consumer smartphone space. How many resources were spent integrating the Danger acquisition or preparing for the KIN release that could have been aimed towards making Windows Phone 7 ready for roll-out this Fall?

Focus on making Windows Phone 7 the best platform for mobile applications. Given the core competencies Microsoft has constructed for itself in its 35 years as a company, this is something that should be achievable (and, personally, I think Microsoft is on that path, as Silverlight is a great base for mobile applications). Getting customers on board is a different issue entirely, as few consumers will buy a platform for its great developer APIs (though they might if the applications are better because of it). At the very least, however, the product should be reflective of Microsoft core competencies. Put your best foot forward, in other words.

One thing Microsoft definitely should NOT do, however, is try to compete with the iPad...at least, not yet.

iPad has shown that there is a natural glide path from mobile phone operating systems to tablet PCs. So, focus on the basics first. Make a phone interface that is easy to use in the 2-3 minutes the average phone user interacts with their phone before moving on to something else. Build the touch-enabled Silverlight applications that are important to that form factor, and if you run into any platform kinks, fix them (something that is a lot easier to do if all internal Microsoft divisions are firmly on the Silverlight train). Once you get those things right, you are better positioned to build a platform that makes sense on a Tablet form factor.

Remember, Apple was first with a mass-market graphical user operating system. You were the first software company to take a stab at the mobile market. Being first is great, but being second can be a lever up if you have clarity of purpose, a strong product concept and the resources to make it all happen.

4. Give your TV strategy proper focus

In spite of my previous article detailing how Microsoft could lose the TV space rather quickly, that outcome is far from a fait accompli. Microsoft has no choice but to perform a system reset on its mobile business given competition from iPhone, Android and Blackberry. TVs, however, still provide a bit of breathing room for Microsoft.

Apple TV is a mostly orphaned product. Though Jobs would never admit this, I think Apple would have a hard time making Apple TV truly fly. Yes, they have great content relationships due to their success with the iPod. Content companies, however, will get into bed with anyone who helps them sell more media. Further, Set-Top Boxes are designed to be unobtrusive and ridiculously cheap, two things that don't play to Apple strengths.

That isn't the case with Google TV. Google is a service company, and as such, has more skills that can be directly applied to the TV space. Plus, Google TV devices will be as low-cost as it is physically possible to be. Android is free, and Linux is free. Customers will only pay for hardware and any software services that run atop it. Borrowing a page from Microsoft's playbook, Google relies on third-party OEMs to build the supporting hardware, thus generating the kind of competition that drained costs from a PC market oriented around the Windows operating system.

Granted, the free nature of Android-based Google TV will put downward pressure on per-unit licensing fees (the traditional way Microsoft has made money). Windows, however, has yet to be displaced by free desktop alternatives, and the single biggest competitor to Windows isn't Linux, but higher-cost Macs. Clearly, Microsoft can't expect anywhere near the licensing revenue from an embedded OS. Microsoft's goal, as it was with Windows, is volume, and there are a LOT of Set-Top Boxes in the world. Even if the per-seat license isn't zero, it will still be relatively small, particularly if you have other means by which to derive revenue (i.e. common application store, tie-ins with things like XBOX, etc).

On the applications front, Microsoft's years of effort offer considerable advantages, particularly as they bring Silverlight to bear on the TV experience (never underestimate the power of consistency across platforms). What is needed is someone with a clear vision of where things should head, and the power to drive teams in a common direction.

Media Center needs to be set free to inhabit Set-Top Boxes and TVs (which they are doing; they already have the PC side, which will be useful once it can be found in TVs and STBs as well). Pull Mediaroom into a tighter orbit around the interfaces offered by Media Center, and make the Mediaroom back-end compatible with all the other media consumption technologies within Microsoft (and no, I don't mean just build the current Mediaroom client into other Microsoft devices...that was and is a crazy notion).

To summarize, Microsoft needs to make all its television-focused media efforts spring from a common conception of the future of media streaming in the home. There seems to be some awareness of that within the company. Efforts in that direction can't have ended with the deparature of Mr. Rodriguez.

5. Find your device muse

As intimated above and in past blog posts, Microsoft needs to find a person with a coherent vision as to how the software giant can stitch together its disparate device businesses. I've complained about how fragmented Microsoft's TV strategy is. It's not fragemented because they are trying to attack from a PC, Internet TV and Cable / Service Provider standpoint, as those are all valid endpoints for consumption. Rather, it is fragmented because the products that focused on those segments initially have been allowed to become empires unto themselves instead of letting a single core become the base into which everything hooks.

Imagine what would have happened if some politically-ambitious manager with visions of Microsoft empires dancing in his head had tried to build an alternative to Windows. After laughing hysterically for about half an hour, Bill Gates would have smothered him with a large, fluffy pillow.

For some reason, nobody saw the way straight to make a common platform within Microsoft for TV. In TV (and devices in general), Microsoft needs the metaphorical guy with a fluffy pillow (an analogy which sounded a lot better in the previous paragraph).

A common platform that spans a particular product category isn't a silver bullet. Clearly, Windows Mobile was a common platform, and ran smack into a giant, pleasingly-backlit Apple logo (and increasingly, a large smiling green robot). But, irrespective of the problems faced by Windows Mobile, it doesn't alter the simple reality that different teams moving in incompatible directions blunt the force of Microsoft's efforts. Consistency, where it isn't derived naturally (as Windows was) is created by individuals with a central vision of how things should work combined with the political power to make it happen. I have no idea who that person with a central vision is at Google. It's clear that Steve Jobs fills that role at Apple.

POWER, however, is a critical component. Unfortunately, Microsoft can't duplicate the power of a Bill Gates, as life isn't an Aldous Huxley novel where historical photos are edited to create "founders" who never existed. But, they have found ways to put the right people in power in some divisions. I don't think it is an understatement to say that Steven Sinofsky and Julie Larsen-Greene saved Microsoft's core product franchises.

The experience with Windows and Office was a clarity born of a survival instinct, to be sure. It reveals, however, that Microsoft can pick and enable the right people when they put their collective minds to it.

In Conclusion

Though I may be accused of sounding a bit Pollyanna-ish, Microsoft has managed to turn the corporate ship on a dime before. In the 1990s, Microsoft almost managed to miss the dial-up Internet boom. Gates managed to navigate the company through that, and did so in a way that secured Microsoft's role as the dominant operating system ever since.

Today, it's not so much that Microsoft is ignoring markets, but attacking them in a strange and haphazard way. Microsoft isn't lacking for bright people with good ideas from a design and software engineering standpoint. I saw them, up close, during three years working at the company. What they lack is focus, and that comes from putting the right people in a position of power to impose it.

I fully support the recent E&D reshuffle, even as I concede Joe Wilcox's point regarding its unfortunate timing. I do think they chose well by making Joe Belfiore the point-man on Windows Phone 7. Joe is the originator of the Media Center concept and a person, I think, who understands the need to leverage Microsoft's existing skill sets (Media Center was always a proper platform, however limited it was from a living room standpoint by being tethered to desktop Windows).

At the end of the day, Microsoft has very little to lose from a dramatic shake-up. A "mere" $169 million profit last year on $7.76 billion in revenue is slim excuse for timidity given the size of Microsoft as a business. Change has to happen if Microsoft's TV efforts are to meet their potential, and if their "right turn" on mobile phones is to gain any traction.

Will Google TV change the TV space? Though details are still to be digested, I think it has a better chance of doing so than the Apple TV experiment, as innovation isn't confined to a Cupertino lab (the same dynamic that will lead to Android's eventual triumph over iPhone, in my opinion), and the service orientation of TV entertainment plays more to Google strengths than Apple's. In my opinion, Google TV would be better served getting a few carriers to offer their customers Set-Top Boxes (STBs) that run the Google TV software. Though the barrier to entry is certainly lower, cost-wise, than was the case for Google's "direct to consumer" Nexus One cell phone experiment, I'm not so sure consumers will race to install their own web-enabled STB. But, Google's strategy is to get OEMs to build devices that use their software, and it is those OEMs who have the carrier relationships that will put boxes in customer hands. It doesn't hurt that, like Android for mobile phones, Android for television is 100% free as in cost (and free in the sense that makes Richard Stallman's smile visible through his beard).

But, until I get my hands on the software (and I will), I'll put off a deeper analysis for a later day. In the meantime, I'll give voice to my frustration with Microsoft's TV efforts. From a television standpoint, I feel that Microsoft is in the same position today that their mobile division was in the day after Apple's announcement of the iPhone (or at least shortly before, as the success of Google TV is a definite "maybe," while I had a hard time believing the iPhone would be anything but successful). All it takes is one savvy competitor with the right product to transform billions in TV-focused investment into so much oil gushing across the seafloor in a certain warm southern body of water.

Microsoft has been focused on the potential of televised entertainment for a VERY long time. Some theorized that Bill Gates almost missed the dial-up Internet boom in 1995 because he was too focused on interactive television service which required broadband network speeds. A former manager at Mediaroom worked on one of those early projects in the late 90s. He recalled big stacks of 500 MB drives (the biggest at the time) that cost ungodly sums of money and had a hard time keeping up with streaming requirements, something that would have made it difficult to build a Video on Demand (VOD) system of sufficient size and video quality. Microsoft also bought WebTV in the late-90s, a startup focused on bringing the Internet to televisions, many of whose engineers served key roles in Microsoft IPTV (later renamed Mediaroom) once that project got off the ground.

Today, Microsoft has multiple pokers in the TV fire. There is Media Center, a "television atop the PC" concept that is notable for its customizability. There is Mediaroom (formerly Microsoft IPTV) that offers an end-to-end infrastructure targeted primarily at telecommunications companies with broadband services and the need to compete with cable. XBOX, though not strictly a "televised entertainment" play, is attached to the TV and offers video rentals through the XBOX Live store as well as access to streaming services like Netflix. One could argue that Windows CE is also a player, given the existence of TV-oriented add-on packages designed to encourage third parties to build STBs atop Windows CE. That, however, is a bit like calling LEGO an architectural firm because someone built a house out of LEGOS. (UPDATE: Talkback participant basharkokash noted Microsoft's new End-to-End Platform based around Silverlight and IIS Smooth Streaming; as I've noted before, I think Microsoft should make Silverlight their default interface on ALL devices, so this is a notable addition; I also think Scott Guthrie - a key backer of that initiative - is one of the smartest strategy guys currently working at Microsoft).

That's a lot of efforts, though to be fair to Microsoft, each group approaches the market from slightly different angles. Given how early Microsoft was to the space, striking off in multiple directions makes some theoretical sense.

On the other hand, I think one of the fatal flaws in post-millennial Microsoft is its inability to move with a coherent purpose across product lines, or even product streams. As I've discussed in past articles, Microsoft has a history of letting different teams attack the same problem simultaneously. In theory, parallel effort will dig up useful detail that can only be gleaned by attacking the problem in more than one way. In the end, the winning bits of all streams can be merged into a common whole, allowing Microsoft to cover more ground than if they put all their eggs in one technology basket.

Can, however, doesn't mean such a merger WILL happen, particularly when control over billions of dollars is at stake...just ask Enrique Rodriguez. The reality is that "mini-companies" within the Microsoft whole are a poor substitute for real-world competition. Internal companies don't face the same consequences as companies that fail to catch on in the open market, and thus are shaped by different incentives. There are fewer gains to be derived from compatibility with other groups, or compromise for the sake of consistency. Code equals power at Microsoft, and given that engineers who love to code (and Microsoft is full of them) would perform a bumper to bumper redesign of a Ferrari if given half a chance, there is a huge impulse to amass as much code uniquely customized for JUST your project as possible. Compatibility and consistency suffer as a result.

Inter-team politics can grow somewhat silly. Media Center was "the enemy" to many in Mediaroom because it had the potential to be a real existential threat to the existing home-grown client, particularly as it had a vastly more powerful User Interface framework than anything that existed, at the time, within Mediaroom.

XBOX is the most frustrating part of the Microsoft TV strategy, at least for me, as someone who wants Microsoft to embrace their potential and, along the way, justify their investment in so many market segments. I love my XBOX, but I will simply never understand why the powers in control of the only TV-attached product made by Microsoft thinks it makes any sense to restrict the network access of custom applications (well, unless you are Facebook, Netflix, Last.fm or another favored company). I really have no problem with paying the XBOX Live yearly subscription fee. Just give third parties the ability to write TRULY network-aware applications so that they can build something unique in the living room.

The wrangling and resultant duplication of effort slows things down, making divisions slow to adapt to change. Such slow adaptation was the thing that brought down Windows Mobile, leaving Microsoft in the position of having to completely reset their entire mobile phone strategy. Given how fast technology moves these days, I think they will have even less time to adapt in the TV space.

Do I think Microsoft can change things? Maybe. I have high hopes for Microsoft's plans to embed Media Center into TVs. I still think that Media Center is a great product, something which should have been leveraged everywhere Microsoft was doing anything in TV (which means: teams involved in the space should not have been allowed to avoid compatibility with it). Does this mean that Embedded Windows (which I presume is what will be used for the embedded version) can truly be deconstructed to the point where it is cost-effective to do this using the existing Windows code base? I sure hope so.

Few who has read anything I have written would confuse me for an enemy of Microsoft technology. As a development platform, my preference is .NET, and when I choose an operating system, I favor Windows, PC or otherwise. But it's hard to ignore Microsoft's surprising capacity to squander its first mover advantage. Five years ago, Microsoft could honestly say they were the only company in cell phones, TVs, PC / Servers, and everything in between. Today, that is no longer the case. Cross-device advantages that should have been leveraged by Microsoft are now being pursued by a company that was non-existent a little over 10 years ago (Google), and another that almost went out of business around the same time (Apple).

It only took one iPhone to turn Microsoft's mobile strategy upside-down. I think the same thing applies to television, and that is how Microsoft could lose the TV space.

More esoteric was my joy that Microsoft rebuilt the entire Visual Studio user interface in WPF and .NET. As I've noted in previous blogs, it's less surprising that the developer tools division chose to embrace their own technology (which is a bit like the Pope embracing Catholicism). It would make a bigger splash if something mission critical from a revenue standpoint - like, say, Office - made the switch, which is unlikely if they can't even convince themselves to use WPF for something like Paint in Windows 7. But, it's gratifying that the .NET dogfood is being eaten by at least one major Microsoft product (that's a coding metaphor for using your own technology, much as Microsoft did with COM way back when), and a Visual Studio written in WPF certainly will help the move towards what, on occasion, is touted as the foundation of their future platform efforts. .NET certainly makes a better baseline to span all the hardware architectures that they intend (hope) to encompass within a common development platform.

I actually installed the RTM about a month ago, which is late by the standards of other MSDN subscribers. Apparently, huge numbers have been using the beta release of Visual Studio 2010 (though the informal "poll" I read might have been a bit skewed by the fact that it constituted attendees at a Microsoft conference). Personally, I only tend jump into a new version when it is released and officially supported. As that has now happened, I'm writing more than basic applications with it, which is why I've belatedly encountered in a serious way the "improved" Help system.

For the benefit of those who have no idea what I'm talking about, Microsoft has rolled out a brand new help system with Visual Studio 2010 that is completely web browser-based. You can download the packages that drive this system, which are then run via a local HTTP process and served up to the browser of your choice (I use Firefox, and that is what gets launched when I go to help). Perhaps the goal was to achieve consistency with the MSDN online library, though if that was the case, they have a ways to go as the online version appears considerably different than the local version.

There are some fairly critical pieces missing. Gone are things like the tree view on the left pane as well as the ability to synch to that tree view from the index, something which has been a mainstay of the Visual Studio help system since I started using Visual Studio back in 1996. Of course, synching the left tree pane likely sank in importance given that the index itself is completely absent in this version (simply wasn't ready for prime time is what the help system blog explained). To be fair, plans are afoot to release a VS Help version with a proper index in the near future, which is possible because the Help system is now managed by a team separate from Visual Studio. The help system, in other words, can be updated on a parallel track to the Visual Studio release schedule.

The missing features are clearly important, but assuming that those features were available out of the VS 2010 gate, I would still be displeased. I reject the notion that moving the help system to HTML, CSS and Javascript - however packaged on disk - is an "improvement."

This isn't the first time I've felt this way. My earliest recollection of a similar situation is from 1997, and involved the move between major Cold Fusion point releases. Back then, our Nortel division was one of the few licensees of a small company named Allaire (so named after the last names of its founders), and the Allaire brothers even flew out to ask our team a bunch of questions about how to improve their product (as well as feedback on improvements to a product named Home Site, and early web development tool the company had recently purchased).

Moving to a web based version makes some sense for a company that specialized in a framework for server-side web applications (as Allaire did), but I remember finding the web replacement clunky by comparison, even going so far as to write my own MFC-based application to replace it (I was learning C++ at the time, so there were practical reasons to do so). Perhaps I would have been happier had the web interface been more feature-rich, but in 1997, that was rather hard to achieve.

I felt similarly about the management interfaces used for Microsoft IPTV back when I worked in the division. Again, if the application had a bunch of snazzy AJAX extras, I might have felt differently (more on that later), but it didn't. I suggested that we use WPF to write the interface (the technology had been released about a year prior), but the people with the power to make such decisions had no interest in that.

I guess, though, my biggest problem with the conversion to a web-based help system is that it makes little sense from a Microsoft strategic standpoint. Why would MICROSOFT, of all companies, think it important to make a WEB-based mangement ANYTHING, and not, say, a Silverlight version. For IPTV there was some excuse, as the development of the original web management systems preceded the existence of Silverlight (or the official version of WPF, for that matter). The help system for Visual Studio 2010, however - a system designed EXCLUSIVELY to build applications for Microsoft-based platforms - has no such excuse. If Microsoft wanted consistency between the online MSDN library and the offline version, a Silverlight front-end would have made a heck of a lot of sense (the online version, like the offline version, is targeted at development for Microsoft platforms). They could still use HTTP to interact with the "back-end" (however local). Granted, that won't fix the absence of things like a properly indexed help system, but those are technical details that are easy to rectify. My biggest problem is a user interface whose "simplicity" gets in the way of usability (glad I didn't remove the VS 2008 help system).

Don't be confused about what I'm saying. I am NOT declaring that it is a bad thing for Microsoft to aim for a truly standards-compliant browser (which is a not unexpected response when I advocate Microsoft-specific technology over a web standard). Though I was once grumpy about the growth of Firefox, that grumpiness was a manifestation of dread at the prospect of revisiting the browser incompatibilities which made web development hell in the latter-90s (I first started writing HTML for Netscape 2.0). Today, I'm fully of the opinion that if you are going to make a web browser, then it darn well better adhere to the baselines web standards. That bar has now (or rather, will soon) be moved to HTML 5.0, and every browser vendor should work to implement it in a consistent fashion.

However, that doesn't mean that I want Microsoft to become Google and focus primarily on web interfaces. For a product aimed at WINDOWS developers, I see no reason why it shouldn't use WINDOWS technology.

Use Silverlight for the help system, and while you're at it, use the same front-end for the MSDN Library front-end.

I suppose those who bothered reading this far are wondering why I titled the post "Everybody hates browser applications." The point is related to the previous few paragraphs, though more as a back story.

To elucidate, think about the most sexy and interesting web application you have ever used. Odds are it used a high-level Javascript framework like jQuery, had lots of moving and gliding parts, updated sections on the fly, and made heavy use of AJAX-style interactions with the backend.

That, my friend, is a web application doing its darnedest to look like a desktop application. Though the UI certainly looks nice, if you were to peek behind the digital curtain, you'd see that the developer had to do the programming equivalent of banging a block of steel into the shape of a corvette to make it happen. There is elegance and beauty in the way HTML and CSS work, but also a lot of confusion and the suprising ability to make your interface look like a Rorschach test with the careless modification of a few CSS attributes. When you want to write applications that maintain state, you end up fighting the realities of stateless HTTP. Cookies and long-lived Javascript connections to the server are workarounds designed to force web applications to do things that are second nature to desktop applications.

That's why I said everybody hates web applications. The best web applications often look a lot like desktop applications (Google Search is a clear exception, but would you be happy with something similarly low-tech in Google Maps?). The real advantage of the browser as portal to the Internet is the safety of a constrained and interpreted environment combined with UI conventions that cross platform boundaries. That is why the web application will never go away. Users, however, are still going to pine for applications that provide the interactivity, flexibility (and offline capability) of a true standalone desktop application...even if they run in a browser and, through a bunch of markup and scripting gymnastics, force the browser environment to do things it was never really designed to do.

So, without much ado, the following changes are being made, effective immediately. Note the use of "we" when speaking of Microsoft, because I am copying verbatim the email I received from...ummm, let's just give him the code name "Beve Stallmer."

1. Browser alternatives to Internet Explorer are now banned. I know browsers like Firefox and Chrome are currently quite popular, but those products duplicate functionality already present in the the base Windows product. So, we are changing Windows to prevent the installation of browser alternatives, as we feel there is no value in others making HTML renderers that compete with ours. How will we enforce this? Read on.

2. Only applications made available through the Microsoft Application Store™ will be allowed to run on Microsoft platforms. I know that Windows has, historically, been a platform upon which applications can be installed from any source by end-users. But, lots of users have been installing applications that contain viruses. 30% of computer users in the Las Vegas area have installed something they downloaded from gambling sites, which is a bit like taking a bath in the sewer. So, in the interest of security, we will vet all applications centrally, and only allow users to install applications that we know something about.

Oh, and by the way, under this new model, we take 30% of the sale price of each application sold. We also reserve the right to exclude applications that we consider to be "platform features." We consider this to be the case with web browsers, but may extend this to include IM clients, mail clients and other tools made by Microsoft. We can't say when we will do this precisely, however, but as it's our store, we have the right to do it whenever we want.

Regarding the rules governing our decision as to which applications are allowed, we are falling back on the US Supreme Court's old standard for obscenity: we know it when we see it. That standard is also likely to change over time. So, though me may approve your application one day, we reserve the right to change our mind whenever we want.

3. Middle-layer runtimes are banned. As middle layers involve runtimes that we can't control, we feel it jeopardizes the stability of applications atop Windows. Therefore, effective immediately, we ban such middle layers from installation on our products. No application that constitutes a middle-layer runtime will be approved for distribution through the Microsoft Application Store™. This includes runtimes such as Java and Flash.

4.

Think we can't detect this? Most conversion tools leave the equivalent of bread crumbs inside the code that can be detected within milliseconds with the right detection software, so believe you me, we CAN detect it. Further, since users are no longer able to install applications from anywhere but the centrally-controlled Microsoft Application store, we have the ability to scan every application thoroughly before we approve it. We will detect this violation of our new licensing rules, so please, don't bother even trying.