All Things Digital

About the best thing to be said about Amazon Unbox, the mediocre, odiously restrictive, video download service the retailer launched last year, is that it was … er … Windows-only, I guess. Which, obviously isn’t saying much. Amazon (AMZN), of course, knows this better than anyone. Which is why the company is enhancing Unbox with a new video store that its customers may actually want to use. Called Amazon Video on Demand, the store streams movies and television programs just like a cable video-on-demand service. “For the first time, this is drop-dead simple,” Bill Carr, Amazon’s vice president for digital media told The New York Times (NYT). “Our goal is to create an immersive experience where people can’t help but get caught up in how exciting it is to simply watch a movie right from Amazon.com with a click of the button.”

Ah, one-click cinema. Seems that Amazon’s finally realized that there simply aren’t enough media junkies to support the download model it embraced with Unbox. “The people who pay to download video are extreme media-philes,” Forrester (FORR) analyst James McQuivey told Variety last year. “They are not the tip of an iceberg. They may grow their own spending, but there aren’t many people like that left. In the video space, iTunes (AAPL) is just a temporary flash while consumers wait for better ways to get video. They’re already coming.”

You can’t put frosting on manure, although Microsoft seems intent on doing just that with its new Vista ad campaign. During a keynote address at Microsoft’s annual Worldwide Partner Conference, Brad Brooks, Microsoft’s vice president of Windows Vista consumer marketing, admitted that Vista hasn’t met with the success for which the company had hoped, and he acknowledged that it was partially to blame for that. “We broke a lot of things. We know that, and we know it caused you a lot of pain. It got customers thinking, hey, is Windows Vista a generation we want to get invested in,” Brooks said.

Apparently, Windows Vista isan operating system consumers should invest in–at least according to Microsoft, which apparently views the OS’s failure as one of marketing and not technology. But there are those who disagree, particularly one snarky competitor who’s been mercilessly taunting Microsoft (MSFT) in a high-profile ad campaign for quite some time now. And so to silence them, or perhaps groan loud enough to drown them out, Microsoft is launching a $300 million ad campaign to explain why Vista doesn’t stink to the many folks convinced that it does. “We’ve got a pretty noisy competitor out there,” Brooks said referring to Apple (AAPL) and its biting “I’m a Mac … you’re a dork” commercials. “You know it. I know it. It’s caused some impact. We’re going to start countering it. They tell us it’s the iWay or the highway. We think that’s a sad message.”

Not nearly as sad as proposing to fix technology problems with advertising.

[Image Credit: Worth1000]

Microsoft (MSFT) has extended the availability of Windows XP nearly as many times as it has extended the ship dates of Windows Vista and Office 2007. The company had planned to cut off XP sales through the retail and original equipment manufacturer channels on Jan. 30, 2008, one year after Vista’s debut. But the poor reception given the new OS and “feedback” from XP advocates gave it pause to reconsider. So Microsoft adjusted the deadline to June 30.

Which makes today XP’s last on the retail market. From now on, if you want to run Windows XP on a new machine, you’ll need to purchase Windows Vista and then “downgrade” to its predecessor, which Microsoft will continue to support until 2014.

Telekinesis was a great little iPhone remote–while it lasted. But come July 11, its days may be numbered. Hidden away in the latest developer build of iTunes 7.7 is a new Apple-designed remote control application for iPhone and iPod Touch users that navigates tracks on Macs and Windows PCs from any of Apple’s current handhelds.

“Use iTunes 7.7 to sync music, video and more with iPhone 3G, and download applications from the iTunes Store exclusively designed for iPhone and iPod Touch with software version 2.0 or later,” the iTunes installer Read Me document explains. “Also use the new Remote application for iPhone or iPod Touch to control iTunes playback from anywhere in your home–a free download from the App Store.”

Sounds like a slick little application. Even slicker if Apple (AAPL) finally decides to add “multi-zone” support to AirTunes so we can stream different music to different speakers throughout our homes.

[Image Credit: InventorSpot]

“Vista is built for businesses,” Brad Goldberg, Microsoft’s (MSFT) general manager for Windows product management, once said. And that may be so. It’s just not built for Intel’s (INTC) business. Because the chip-maker has decided against upgrading to Vista–ever.

“This isn’t a matter of dissing Microsoft, but Intel information technology staff just found no compelling case for adopting Vista,” a person with direct knowledge of the company’s plans told the New York Times.

Intel information technology staff just found no compelling case for adopting Vista. If that’s not a diss, then neither is “Windows Vista sucks.” Because if one half of the Wintel hegemony is balking at deploying the latest iteration of the OS on which it’s built, well that’s pretty ugly.

“I would buy a Mac today if I was not working at Microsoft,” longtime Windows development chief Jim Allchin said in January of 2004. And so too, perhaps, would Intel, if it wasn’t partners with the company.

Microsoft appears to have finally come to terms with the idea that some Windows users will skip Vista altogether and run XP until Windows 7 arrives at market in 2011. Or 2014. Or two years after the next official release date Microsoft announces.

In a note to customers Monday, Bill Veghte, senior vice president of Microsoft’s Online Services and Windows Business Group, reiterated that Microsoft (MSFT) will send XP off to meet the great BSOD in the sky on June 30. But he said the company will continue to support XP with security and other critical updates until April 2014. 2014. That’s 13 years after XP was first released.

“With the June 30, 2008, ‘end of sales’ date for Windows XP approaching, many people have asked me if they will still be able to get support for Windows XP. The answer is an emphatic ‘Yes, you will continue to be supported,’” Veghte wrote. “Our ongoing support for Windows XP is the result of our recognition that people keep their Windows-based PCs for many years.”

Huh. Apparently, it has nothing to do with the paucity of enterprise customers who seem to prefer XP to Microsoft’s newer, Vista operating system. Or Hewlett-Packard (HPQ), Lenovo (LNVGY) and Dell (DELL) offering customers who purchase Vista machines the chance to replace the OS with Windows XP Professional. Or the antipathy with which Vista’s viewed in the market.

Steve Martin once said, “The difference between a good comedian and a great one is ti … ming, tiiiii-ming, timmm-ing . . . timing!” If that’s the case, Microsoft’s comedic timing is impeccable.

In a status report filed with Federal antitrust regulators yesterday, Microsoft (MSFT) said it had done much to comply with its 2002 antitrust consent decree and generally applauded its efforts toward interoperability and fair competition.

In the states, perhaps. But apparently not in Asia. Because not 24 hours later, China’s State Intellectual Property Office said it’s investigating the software giant for discriminatory pricing. And according to the Shanghai Securities News, it may sue Microsoft under a new antitrust law scheduled to go into effect Aug. 1.

“On the one hand, global software firms, taking advantage of their monopoly position, set unreasonably high prices for genuine software, while on the other hand, they criticize Chinese for poor copyright awareness,” an unnamed source told the publication. “This is abnormal. With the anti-monopoly law in place, [the] Chinese government and companies have the obligation and right to correct the situation.”

Of course, it’s also “abnormal” for Windows Vista to be priced at $2.50 a copy, yet copies of the OS are widely available in China at that price. Syndicates that distribute more than $2 billion worth of counterfeit Microsoft software aren’t exactly normal either, but you’ll find those in China as well. The FBI did. Which is not to say that China is wrong to complain of Microsoft’s unreasonably high prices–just laughably vindictive in the way it’s gone about it.

We see little to stop Google from reaching 70% market share eventually; the question, really, comes down to, ‘How long could it take?’ ”

–RBC Capital Markets analyst Jordan Rohan, March 2006

Not long at all, really.

They’re not the competition; they’re the environment in which you compete. The IT industry used to say that about IBM, but today the adage seems equally applicable to Google (GOOG), which dominates the search market just as IBM (IBM) once dominated the computer industry.

According to new metrics from Hitwise, Google’s share of the U.S. Internet search market grew to 67.9%–a 4% increase year-over-year. Google’s growth apparently came at the expense of rivals Yahoo and Microsoft. Though it claimed the second-largest share of the search market, Yahoo (YHOO) slipped to 20.28% from the 20.73% share it held a year ago. Microsoft’s (MSFT) Live Search, ranked third behind Yahoo, fell to 6.26% from 7.77% in that same period.

Seems the two companies’ recent efforts to differentiate their search offerings from Google’s haven’t done much to boost their respective market shares. Nor will they ever if the Google juggernaut continues as it has. As Credit Suisse analyst Heath Terry once noted, search is a natural monopoly business and there’s a decent chance that over time, Google will continue to gain share until it’s claimed most of the market.

And that may happen sooner than we think. Google’s closing in on 70% market share already. “By this time next year,” Silicon Alley Insider’s Henry Blodget writes, “Google’s search business will be larger and more profitable than the most profitable and legendary monopoly in history–Microsoft Windows.”

You wouldn’t know it from the protests over Microsoft’s decision to retire Windows XP at the end of June or the PC users exercising their Windows Vista downgrade rights, but Vista is actually selling quite well. Microsoft (MSFT) Chairman Bill Gates said today that sales of Windows Vista have reached 140 million copies worldwide. “That’s a very rapid sales rate,” Gates explained.

Sure is. Especially for an operating system that’s met with such a middling reception. That said, you’ve got to wonder if the 140 million copies to which Gates refers are deployed copies or licenses sold. Because if it’s the latter, the number would be decidedly less impressive. It wouldn’t really account for volume licenses sold to corporate customers, copies pre-installed on OEM computers, and copies downgraded to Windows XP. And Gates has made exactly this type of oblique statement before, the last time Microsoft announced Vista sales figures.