Microsoft Becomes Most Interesting Stock in the World
By
Dana Blankenhorn
NEW YORK -- When I last wrote about Microsoft's (MSFT) Windows 8, I described its Metro user interface as "one interface to rule them all," because it can be adapted to PCs, tablets, phones, and even game machines.
I suggested it might do for Microsoft what Linux did for IBM (IBM): unify disparate product lines. But it turns out it's more than that. Metro is making Microsoft the most interesting stock in the world.
That's because, according to former Apple (AAPL) and Palm executive Michael Mace, this is the most important rollout Microsoft has had since Windows 3.0 more than 20 years ago, and an entire industry is on the line.
There are three possible outcomes:
Microsoft wins and extends its desktop dominance into phones, online services, tablets and social networking.
Microsoft loses, and becomes vulnerable to desktops using other operating systems such as Apple's Macs and Google's (GOOG) Chromebooks.
Meh. Users resist upgrading, and we go on as we have been.
All three outcomes are possible, and investors don't know where to place their bets. Also, "meh" may be the worst outcome of all.
The main Metro screen will be filled with Microsoft products, Mace writes, and efforts by competitors to put their own brand identities on their "tiles," which replace icons, will tend to look shabby.
The old Start menu is disappearing -- users will be pressed to learn a new way of doing things. And forget about restarts -- even turning the thing off is going to be a trial.
It's true that the old Windows 7 interface will remain available, much as MS-DOS compatibility remained in Windows 3.0. (Don't remember DOS? Ask your dad.) But users, and developers, will be strongly pushed toward Metro. Either you like Metro or you don't.
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I was already a tech reporter when Windows 3.0 came out. Although a version of Windows had been out for four years, this was the first one that worked.
Windows 3.0 basically forced IBM out of the PC business, made Apple marginal for a decade, and gave us Microsoft Office, pushing out older application vendors like Lotus, WordPerfect and Ashton-Tate.
You can see a version of Metro on the Lumia 900, which Nokia(NOK_) is advertising with the tag line "the smart phone beta test is over!"
It's a funny ad, and stars former Saturday Night Live funnyman Chris Parnell, best known these days for playing Dr. Leo Spaceman (pronounced "speh-che-min"), a walking malpractice suit of supreme self-confidence, even self-delusion. (An interesting choice.)
Why will "meh" be the worst possible outcome? Because it would leave Microsoft's biggest OEMs, Hewlett-Packard (HPQ) and Dell (DELL), vulnerable to Chinese competitors such as Lenovo that can better handle today's value pricing.
It would prevent these American companies from gaining a toehold in the tablet market. Something has to change, in other words, or Microsoft's whole ecosystem, including Nokia, goes down in flames.
Mace wrote in his blog post that he did a search comparing "I hate Windows 8" and "I love Windows 8."
Hate outran love by 3-1.
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But my own Googlefight on those same two terms showed love outrunning hate by nearly 30-1, and a straight comparison of the terms on Google.com had love outrunning hate 15-1. (Mace later wrote to say he got it wrong.)
But we don't really know. Microsoft is doing a slow, controlled rollout, and the current view may be down to PR -- it may all be marketing hype. We won't know the result of all this until the fall, after the software is officially released.
Microsoft has been a sort of widows-and-orphans stock for a decade, bouncing between $25 and $30 a share. Those days are ending. It will either rise or fall with Metro. Which way will it go? Your guess is as good as mine.
At the time of publication, Blankenhorn held shares of Microsoft, Apple and Google.
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