All Things Digital

Remarkable. Downtrodden handset maker Palm (PALM) has somehow managed to poach another Apple (AAPL) veteran: Lynn Fox, the company’s now former director of Mac PR.

First Jon Rubinstein, former head of hardware engineering at Apple. Then Mike Bell the company’s VP of CPU software, in the Macintosh hardware division. And now Fox.

What does Palm have up its sleeve that could possibly inspire Rubinstein, Bell and Fox to leave Apple at a time like this?

Microsoft released to manufacturing Windows Server 2008 and Windows Vista Service Pack 1 today. They’re heading off to the assembly line now and will arrive in manufacturers’ hands on March 1.

End users will have to wait just a little bit longer. Why? Give you one guess. “Driver problems.” From the Windows Vista Blog:

Our beta testing identified an issue with a small set of device drivers. These drivers do not follow our guidelines for driver installation and as a result, some beta participants who were using Windows Vista and updated to Service Pack 1 reported issues with these devices. Because the issue was with the way the drivers were installed and not the drivers themselves, the solution was simply to reinstall the drivers. While this worked fine for our more technical beta testers, we want to deliver a better experience for customers as we make the update broadly available.

“While we know that most customers who update from Windows Vista to SP1 will NOT be affected, our approach is to improve the experience for all our customers. To do this, we will begin making SP1 available through Windows Update in mid-March, giving us time to work with some of our hardware partners to make adjustments to the installation process for the affected drivers. As SP1 gets delivered through Windows Update, we will only offer it to PCs that we detect don’t have any of the affected device drivers installed. We’re taking the next month or so to continue our work of identifying as many of these devices as possible.”

Good thing Microsoft’s bottom line is largely unaffected by the poor reception given its new Windows Vista operating system. Because according to two new surveys, Vista uptake isn’t likely to improve much in 2008.

In a Forrester poll of nearly 600 European and U.S. companies that have more than 1,000 employees, 84% of all their PCs now run Windows XP, up from 67% the year before. And though nearly a third of respondents said they would begin deploying Vista by the end of 2008, 17% said they wouldn’t do so until 2009 or 2010. “The big story isn’t that 32% of the companies we surveyed said that they would start Vista deployments by the end of next year,” said Forrester analyst Benjamin Gray. “It’s that companies have been hugely successful in standardizing on Windows XP.”

A study by King Research arrived at a similar conclusion. Ninety percent of the 961 IT professionals surveyed said they’re leery of migrating to Vista and more than half said they aren’t planning to deploy Vista at all. Why? Stability, compatibility and cost, says security vendor McAfee. “In 2007 there has been less than 10% market penetration for Vista,” David Marcus, security research manager for McAfee Avert Labs, told ZDNet.co.uk. “There hasn’t been a huge adoption. Most people haven’t upgraded because of the hardware upgrade needed. XP is still robust, and is sound with SP2. Most businesses are looking at it from the point of view of, ‘Why change out for some nice graphics when XP does what we need?’ ”

Previously:
Act Now and Get a Downgrade to the OS You Really Want, ABSOLUTELY FREE!

When Microsoft CEO Steve Ballmer told a departing Microsoft employee that he would “f*****g kill Google,” he forgot to mention that he planned to take his sweet time doing it.

Because here we are three years later, a few days after Google announced Android–an open mobile platform that could mean trouble for Windows Mobile, Google’s trading around $700, Microsoft’s trading around $35, and Ballmer–well, Ballmer’s doing what he’s done for years now: disputing the notion that Google has made any gains against Microsoft.

In Tokyo to preside over the launch of Microsoft’s new Windows Live services, Ballmer said he still doesn’t see Google as much of a threat to Microsoft’s loss-making online services business. “Google is not ahead of us,” he told reporters, adding “in the area of search specifically, Google would lead.”

And what of the mobile-platform market and Google’s designs on it? Surely, the impressive membership of the search giant’s Open Handset Alliance is cause for some concern. Not at all. The mobile-platform market is “Microsoft’s world” and Google’s Android platform is vaporware. “…We have great momentum, we’ve brought our Windows Mobile 6 software to market, we’re driving forward on our future releases and we’ll have to see what Google does,” said Ballmer. “Right now they have a press release, we have many, many millions of customers, great software, many hardware devices and they’re welcome in our world.”

Apparently, Ballmer hasn’t seen Android’s rumored first app., yet.

In a press conference following Google Analyst Day, company Chairman and CEO Eric Schmidt and co-founder Sergey Brin confirmed Google’s plans to bid in the FCC’s upcoming 700 MHz spectrum auction, but declined to discuss the mobile-phone strategy that might make use of it–apparently leaving that task to The Wall Street Journal.

According to a report in the publication today, Google will officially disclose its long-anticipated plans for Google-powered phones within the next two weeks. The devices will reportedly feature Google’s standard mobile applications (Maps, etc.) and more interestingly, a customized open-source operating system, which would allow third-party developers to build applications beyond those offered by Google. From the Journal:

The Google-powered phones are expected to wrap together several Google applications–among them, its search engine, Google Maps, YouTube and Gmail email–that have already made their way onto some mobile devices. The most radical element of the plan, though, is Google’s push to make the phones’ software ‘open’ right down to the operating system, the layer that controls applications and interacts with the hardware. That means independent software developers would get access to the tools they need to build additional phone features.

“Developers could, for instance, more easily create services that take advantage of users’ Global Positioning System location, contact lists and Web-browsing habits. They also would be able to interact with Google Maps and other Google applications. The idea is that a range of new social networking, mapping and other services would emerge, just as they have on the open, mostly unfettered Web. Google, meanwhile, could gather user data to show targeted ads to cellphone users.”

And don’t forget the mobile commerce element. Google-powered phones might even offer customers a way to pay for goods from vending machines and retailers via text message.

Anyway … The company has approached a number of handset makers and wireless operators about partnering in the effort, which it hopes to bring to market by the middle of 2008.

Previously:

• First Gphone Line Forms in New York Times Newsroom
• We Believe in One Godphone, the Handset Almighty …
• ‘We’re Not Doing a Mobile Phone’ Added to Norton Anthology of False Denials
• The Gphone: Exclusively From Sprint Nextel and Google?

Many, many years ago, when the digital-music business consisted of little else besides Napster and the Recording Industry Association of America’s lawsuits against it, Apple proved that there was indeed a decent business to be had in selling music online for $1 per song. With iTunes, it quickly established a market for paid downloads as the music industry wrung its hands in utter incomprehension at this new age of digital distribution that was dawning.

So it is ironic, enormously ironic, to hear NBC Universal Chief Executive Jeff Zucker accuse Apple of ruining the music business (like that second Lindsay Lohan album didn’t do any damage at all). Speaking at a breakfast organized by Syracuse University’s Newhouse School, Zucker said Apple “destroyed the music business in terms of pricing” and will invariably do the same to the online video business.

Noting that NBCU booked just $15 million in revenue during the last year of its iTunes deal, Zucker described the company’s deal with Apple’s digital media store as one that was corrosive to its media business. “We don’t want to replace the dollars we were making in the analog world with pennies on the digital side,” he said. What Zucker does want is a piece of Apple’s iPod business. “Apple sold millions of dollars worth of hardware off the back of our content and made a lot of money,” Zucker said. “They did not want to share in what they were making off the hardware or allow us to adjust pricing.”

Can’t imagine that’s going to change anytime soon, either–no matter how loudly Zucker whines. Apple CEO Steve Jobs would probably rather swallow a Zune whole than be pressured into handing over a percentage of iPod sales to record labels, as Microsoft has done with Zune.

Doug’s a very special guy. He’s the last of the great music executives who came up through A&R. He’s old school. I like him a lot.”

–Apple CEO Steve Jobs on Universal Music Group CEO Doug Morris

The per-device royalties Universal Music Group receives for every Zune player sold were apparently substantial enough to buy CEO Doug Morris a bigger set of balls, because he’s out drumming up support for an industry-owned subscription service with which he hopes to loosen Apple’s grip on the digital music market.

The endeavor is called “Total Music,” and Morris has already approached Sony BMG Music Entertainment and Warner Music Group about participating. His proposition: a subscription-based music service for the hardware industry, one whose cost could be baked into the hardware that supports it. Under the Total Music model, hardware makers subsidize the cost of music, which consumers are then given for “free” when they buy a new digital media player. That’s more money up front for hardware makers, but it’s a wise investment because, as Morris reckons, they’ll make that money back and then some by selling many more devices.

Interesting business model. “If the object is to wrest control of the market from Steve Jobs,” said Gartner analyst Mike McGuire, “this is a credible way to try it.”

Sadly for Morris, it’s also one inevitably complicated by recent turmoil in the music industry. With Radiohead releasing its latest album as a pay-what-you-will digital download, Nine Inch Nails declaring itself a free agent, and Madonna about to dump Warner Music Group for a concert promoter, we’re clearly seeing a sea change in music discovery, distribution and consumption, one perhaps lost on an industry so hardened by years of CD price fixing. So while the music industry struggles so to wrest control of the digital music market from Apple, some of today’s biggest popular artists are crafting an entirely new business model.

People keep asking what Web 3.0 is. I think maybe when you’ve got an overlay of scalable vector graphics–everything rippling and folding and looking misty–on Web 2.0 and access to a semantic Web integrated across a huge space of data, you’ll have access to an unbelievable data resource.”

–Tim Berners-Lee, May 2006

Web 2.0 is well documented and talked about. The power of the Net reached a critical mass, with capabilities that can be done on a network level. We are also seeing richer devices over the last four years and richer ways of interacting with the network, not only in hardware like game consoles and mobile devices, but also in the software layer. You don’t have to be a computer scientist to create a program. We are seeing that manifest in Web 2.0 and 3.0 will be a great extension of that, a true communal medium … the distinction between professional, semiprofessional and consumers will get blurred, creating a network effect of business and applications.”

–Jerry Yang, co-founder and CEO of Yahoo, November 2006

“Web 1.0 was dial-up, 50K average bandwidth, Web 2.0 is an average one megabit of bandwidth and Web 3.0 will be 10 megabits of bandwidth all the time, which will be the full video Web, and that will feel like Web 3.0.”

–Reed Hastings, founder and CEO of Netflix, November 2006

Had to happen sooner or later, right? The lexicographers who gave us the term Web 2.0 have finally gotten around to issuing an “official” definition of Web 3.0 and, having undoubtedly scurried to trademark the term, are probably already plotting the pricey industry conference that will accompany it.

So what is Web 3.0, “officially”?

Web 3.0 is defined as the creation of high-quality content and services produced by gifted individuals using Web 2.0 technology as an enabling platform.”
–Jason Calacanis

In other words it’s Web 2.0 2.0, Web 2.0 with another 1.0’s worth of marketing BS. Or, as Josh Kopelman, managing director of First Round Capital, aptly puts it, “any Internet-based company that has launched after 2004.“