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Microsoft’s Mojo Declines Inexorably

It wasn’t so long ago that Microsoft had a fearsome presence in the PC industry. If you got on their bad side for any reason, were viewed as a potentially serious competitor, or some combination of both, you had to prepare for them to trounce you. Certainly Netscape felt their wrath, as did companies that tried to push alternatives to the MS-DOS operating system way back when.

However, a read of the filings involved in a certain class action lawsuit against the Windows Vista marketing scheme presents the picture of a company forced to kowtow to Intel and other partners in order to create the false impression of Vista readiness.

A full summary of the sad tale is described in an excellent piece over at the Ars Technica site.

In short, Intel didn’t want to see the market for its 915 chipset — extremely underpowered as far as full Vista compatibility was concerned — to dry up. Such dealers as Best Buy didn’t want to see PC sales for the holiday season in 2006 tank as folks awaited newer, more powerful models that could handle Vista’s exorbitant system requirements with aplomb. So Microsoft, evidently with some reluctance, went along with a dual compatibility rating that largely confused customers who bought computers that couldn’t deliver the full Vista experience.

Does this sound like an all-powerful company that can enforce its dictates through force of will and shady marketing tactics? That may have worked at one time, but no more. Today, while earnings have remained good, MIcrosoft’s stock price remains relatively flat, particularly when you compare it to Apple and Google.

Recent surveys show that Windows Vista gets poor marks for customer satisfaction, both in the consumer and business markets. Microsoft’s name no longer has the prestige it used to carry, at least according to recent surveys.

Without going into excessive detail, it’s clear to me that Microsoft’s fearsome image is severely tarnished. When you extend past their core competency in desktop operating systems and applications, they don’t do so well. The ill-conceived attempt to bear hug Yahoo strikes me more as a move of desperation than a carefully-conceived plan to gain traction in the online marketplace. Surely Microsoft could have spent far less addressing the shortcomings of its own efforts to compete. After all, Google started with nothing. But then again, so did Microsoft, but that was long ago and far, far away.

Unfortunately, while it seems to make for good headlines to write lurid headlines about apparently successful attempts to find security failings in Mac OS X, or possible unsold iPhones (when they are actually in short supply in many of the usual outlets), Microsoft’s failings don’t seem important.

Consider the fact that over a billion dollars was allocated to repair an estimated 12 million defective Xbox 360s, which amounts to roughly the entire production run as of that time. Why? Because of severe overheating problems that would require replacing the consoles. If something similar happened to Apple on even a fraction of that scale, you’d see the headlines plastered on the front pages of the mainstream press around the world.

In other words, Microsoft can make mistakes, deliver faulty products, but just go on laughing to the bank with large profits on their remaining successful products. Apple? The slightest mistake will get them into a jam.

Please understand I’m making no attempt to be objective here, as such a thing is impossible for any journalist. But since I do use Windows from time to time, I’ll try to fairly represent what’s really going on.

First and foremost, Windows Vista is widely acknowledged as a huge let-down. Maybe not an abject failure, as tens of millions of copies have been preloaded onto new PCs, but with a major petition begging Microsoft to extend the lifetime of XP, you can bet a lot of people don’t want the upgrade.

Where’s the petition for Apple to continue to support Tiger, or allow you to downgrade even on the latest models? That’s not a question that’s being asked — although I’m sure a few downgraded because of Leopard’s known version point-zero defects that haven’t been fixed as of 10.5.2.

Whenever Microsoft moves beyond its software business, trouble arises. Assuming that the Xbox 360 woes have been resolved, there’s the failure of the Zune, which ended up being largely a clone of an older iPod, rather than represent a new and better way to carry your music.

Relying on products that are just good enough, rather than innovate as they claim to do, will ultimately hurt Microsoft big time.

This doesn’t mean Microsoft can’t come back. As a new generation of management begins to take over — except for the often irrational-sounding Steve Ballmer of course — it’s quite possible the company will begin to change direction and learn from its mistakes in the years to come. Companies routinely go through ups and downs, and surely Apple is a prime example.