“Meanwhile back at the core OS revenue front it doesn’t look
particularly promising either. There’s clearly a point beyond which
Microsoft can’t squeeze the OEMs, and while it’s a substantial leap
of faith from that to say they’ll start retaliating by shipping PCs
with alternative operating systems, the pressure could induce them
to concentrate more heavily on platforms that aren’t exactly PCs.
Linux appliances could become more attractive to them than the
lowest price PCs, and they just might start to get more interested
in Palm and Symbian as well, given that stuff you shove in your
pocket and stuff that works with wireless is hot.”
“The difficulty with devices in these categories here is that
they’ll be cheaper still, and even a Microsoft defensive strategy
that used CE as the sacrificial victim to avoid cutting Windows
prices wouldn’t add up to the right numbers. A decline in the PC
platform could be triggered or accelerated by the hardware
manufacturers increasingly viewing PCs as high spec, higher cost
devices they could actually make a profit on, and cutting the
low-cost non-PC platforms in at the bottom end, thus at last
knocking back Microsoft’s percentage take from the hardware
business.”
“That wouldn’t be the case, even if Microsoft was charging
Symbian’s $5-$10 rate in the device/mobile phone market, so long as
Microsoft took a big slice of the market. But you’ve no doubt
noticed that the three biggest handset companies are (largely) in
the opposing camp, and that Microsoft partner Sagem (rather small,
rather French) recently issued its own profits warning. Still,
there’s always Samsung…”