And there's a mismatch between the pricing of Windows Phone devices and the segments of the market that most appreciate the futuristic social-centric user interface. That part of the market is looking for £20 to £25 monthly contract bargains - not for £35 to £40 premium models.It needs to assert the importance of the smartphone. It also needs to reassure developers and hardware makers that the recent upheavals haven't distracted the company. Microsoft's welding of a touchscreen phone interface onto the PC version of Windows 8 hasn't really pleased anyone - Redmond needs to put all its weight behind the phone platform and follow the Apple strategy - thew iPhone maker successfully scaled its phone operating system up to a tablet. The Sinofsky strategy was too clever by half.Microsoft also has to reassure hardware makers and their supply chains that the OS will still be there in two years. And it needs the users to come along with it by announcing a quarterly schedule of updates. The hard work has been done - a great design and a difficult platform shift. But Windows Phone drifts into the Christmas buying season in a strangely listless state.
Nokia has enough cash for another swing at the market next year. It's certainly in a stronger position than RIM, which must do all the platform development itself. But Nokia can't save it Windows Phone by itself - and it needs it to succeed more than anyone. Ailing Japanese electronics giants Sony and Toshiba are set to splurge a combined total of over $US14bn (£8.7bn) on chips next year to support a range of new products they hope will turn their fortunes around, according to market watcher IHS iSuppli.The analyst revealed in its IHS Semiconductor Spend Analysis report that Sony’s chip spend would jump by five per cent from $8bn (£4.9bn) this year to $8.4bn (£5.2bn) next, while Toshiba will increase outlay on processors by two per cent to $6.1bn (£3.8bn) in 2013 and then by 6.3 per cent the following year to reach $6.5bn (£4bn).The two firms’ optimistic outlook is in stark contrast to that of their domestic counterparts Panasonic and Sharp, both of which plan less spending reductions will drop in 2013 and 2014, iSuppli said.
All four have suffered an annus horribilis in 2012 thanks to a variety of factors including the continued economic slump in key markets like Europe and increased competition from Asian rivals and Apple. Taken as a group they will see revenue drop seven per cent from 2011 to 2012, according to the analyst.Panasonic recently received a £4.7 billion bailout from Japanese banks after posting a record loss of ¥772.1bn (£6bn) last fiscal year.Sharp, meanwhile, managed to sign a ¥360bn (£2.9bn) bailout deal with the banks after it revealed plans to slash 11,000 jobs, and also received a ¥9.9bn (£75m) boost from Qualcomm, who will take a stake in its IGZO display business.Sony, whose credit rating was recently dropped down three notches by Fitch to double-B-minus, even lower than Panasonic’s, was forced to sell its chemicals business to the state-run Development Bank of Japan and issue five year convertible bonds in order to generate a profit this year.
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It’s also in the process of cutting 10,000 jobs by the end of fiscal 2012 and is selling off manufacturing plants and shares in joint ventures.Toshiba is faring better than most and still hopes to generate a net profit despite losses in the past two quarters.IHS said that despite the gloomy headlines, innovation at the firms could yet herald a resurgence in the market, pointing to a wide range of smartphones, tablets, TVs and cameras on show at Japan’s CEATEC show in October.In particular it highlighted a Bravia 4K LCD TV and hybrid tablet-laptop devices from Sony as well as plans for a PlayStation 4 console, as well as new REGZA HDTVs, ultrabooks and tablets from Toshiba.IHS is predicting mixed fortunes for the two, however, with Sony likely to see 3.7 per cent revenue growth while Tosh is set to suffer a further one per cent decline.“All the Japanese consumer electronics OEMs are struggling financially – prompting them to take measures to cut costs in order to shore up their profits,” said IHS analyst Myson Robles-Bruce, in a canned statement.“But even in these grim circumstances, Sony and Toshiba remain optimistic about the future, and are taking steps to invest in innovative products. This will cause their spending on semiconductors to rise in the coming years.”
Tablet-friendly Windows 8 won't allow Microsoft into Apple, Facebook, Amazon and Google's cosy clique, said Google’s executive chairman.Quoted in a rather thin Wall Street Journal Q&A, Eric Schmidt maintained his belief that Google, Apple, Amazon and Facebook comprise a consumer-pleasing web-conquering “gang of four”. And despite Microsoft's touch-driven Windows 8 and Surface slab launch, the Redmond giant is still persona non grata.Schmidt told the WSJ: “We had never in our industry seen four network platforms that scale. We had seen IBM and we had seen Microsoft. But now we have four, and the resultant competition is a huge change in the industry.”Asked for his thoughts on Windows 8 and Windows Phone 8, the search supremo replied: “I have not used it.” He wasn't asked to clarify what the “it” actually was, but added: “I think that Microsoft has not emerged as a trend setter in this new model yet.”
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Schmidt isn’t the first in the gang of four to diss Microsoft without having bothered to check what the company is offering: Apple CEO Tim Cook wrote off Microsoft’s Surface tablet on the day of its launch in October without even having a fondle.“I haven't personally played with the Surface yet," Cook said during a conference call on Apple’s fourth-quarter results, "but what we're reading about it is that it's a fairly compromised, confusing product."On Surface’s hybrid status as a laptop-cum-tablet, combining a touchscreen with optional keyboard, Cook said at the time: "I suppose you could design a car that flies and floats, but I don't think it would do all of those things very well."Even though Apple and Google are in the same cosy clique, they still have massive fallings out, such as the crap iOS map app that replaced Google's superior software on Apple devices. However Schmidt, a former Google CEO, insisted they do all get along:
The press would like to write the sort of teenage model of competition, which is, 'I have a gun, you have a gun, who shoots first?' The adult way to run a business is to run it more like a country. They have disputes, yet they've actually been able to have huge trade with each other. They're not sending bombs at each other. I think both Tim [Cook, Apple's CEO] and Larry [Page, Google's CEO], the sort of successors to Steve [Jobs] and me if you will, have an understanding of this state model. When they and their teams meet, they have just a long list of things to talk about.However, Schmidt said it was “extremely curious” that Apple was suing Google's Android partners rather than Google itself. Apple is pursuing Motorola and Samsung over Android, Google's mobile operating system that rivals Apple's iOS, taking issue with smartphone features such as scroll bars and pinch-to-zoom.Microsoft needs to hack a third off Surface RT prices and widen distribution to give the fondleslab a fighting chance to compete, said equities analyst Detwiler Fenton Group (DFG).