Microsoft needs radical OS redesign

Microsoft and Amazon both launched new tablets, looking to steal some market share - especially in the enterprise, while there is no new iPad. Amazon is broadening the reach of its Kindle Fire range, with a higher specified top end with increased business functionality; combined with a new low entry price point and features which could appeal to first-time tablet buyers, such as Mayday, an instant video connection to customer support.
Meanwhile, Microsoft's ambitions still revolve around the survival of Windows, which to some extent means the survival of devices that are something like PCs – though even in that segment it is no longer safe, given the rise of Linux/browser-based options like Google Chrome OS.
It needs a radical design to keep Windows current (or better still, a new operating system), but the new Surface models add little to their predecessors. Despite the poor performance of the ARM-based Surface RT so far, however, Microsoft insists it will stick with the platform, though once the Nokia deal is complete, we can expect RT to converge quickly with Windows Phone.
Amazon's new Kindle Fires:
On Amazon's side, with Google boasting of the highest resolution 7-inch tablet on the market, and new small-screen models looming from Apple and even Microsoft, Amazon has to step up its game to stand out in a sub-segment it helped to create. It has unveiled the third generation of its Kindle Fire family, but rather than driving price points down even further, as was widely expected, it has raised the tags for the top models.
The new flagship, Kindle Fire HDX, costs from $299 to $479 and comes in two sizes – 7-inches and 8.9-inches. The prices are still below the $329 starting point of Apple's iPad Mini, but a far cry from the $199 norm that Amazon set with its earlier Fires. This saw the giant retailer challenging traditional device makers with a model that relied on low cost gadgets to drive mass up-take, and then on increased consumption of content and services to deliver the profits.
However, the original Fires had fairly low specifications, while the new HDX has a higher resolution screen (339 pixels per inch on the larger version, more than the iPad); faster processor (the Qualcomm Snapdragon 800 clocked at 2.2GHz, which trebles the speed of the previous generation Fires); and LTE support as well as Wi-Fi. It also added a new graphics engine to enhance the gaming experience, with games a key aspect of the Kindle digital sales model. All that in a device that weights 13.2 ounces, 10 ounces less than the larger iPad.
This sees Amazon looking to extend its reach to users demanding a higher end hardware or content experience, and trying to poach customers from Apple or Samsung. According to IDC, Amazon slipped to fourth place in the tablet market in the first quarter of this year, with 3.7% share.
The HDX suggests Amazon is amending, or at least diversifying, its strategy for device sales, which was previously summed up by the words of CEO Jeff Bezos: “We want to make money when people use our devices, not when they buy our devices. We think that's good customer alignment. No one has to be on the upgrade trend.”
But the higher specs of the new model suggests Amazon is now trying to tempt loyal users of its ereaders, slates and stores to upgrade. However, it is still playing in the low cost hardware space, also unveiling a new low end Fire HD priced at just $139.
Another reason for stretching the Fire line-up at the high end will be to attract business users as BYOD habits take off and as corporations take the iPad and even the Surface seriously. For this space, Amazon has added new security features such as hardware and software encryption.
Another new feature is the Mayday button, which connects the user to a customer service representative via video and lets the Amazon support staff see a consumer's screen and draw on it. This is just one example of how Amazon is increasingly leveraging its cloud technology to bring new services to its devices, an area where it currently is ahead of Apple.
Bezos said at the launch: “If you think about Amazon's history, we have always been where we marry together hi-tech and heavy lifting. Mayday is another example of marrying hi-tech and heavy lifting.”
Microsoft may converge its ARM-based systems soon:
Over at Microsoft, as Surface 2 upgrades were unveiled, Microsoft executives insisted the company would continue to develop and promote ARM-based tablets running Windows RT, and that the firm sees great potential in the “phablet” form factor. That suggests that the long-awaited convergence of Windows RT and Windows Phone might come soon, and would be hastened by the acquisition of Nokia.
There have been tensions in that relationship – Nokia was effectively deterred from expanding into the tablet growth area by the fear of having to compete head-on with Surface; similarly, Windows Phone remained the Finnish firm's domain and Microsoft failed to extend its own range to the handset.
Now, with both partners set to announce new tablets or phablets in the coming weeks, there is the prospect of the two ranges harmonizing along with their owners, when the deal closes in the new year (at which point, Nokia CEO Stephen Elop will pocket $25 million, it was revealed this week).
Terry Myerson, EVP of Microsoft's operating system group, told the firm's analyst meeting: “There are two very important chipset families in all of our devices and that's Intel x86 and ARM. The ARM devices, particularly in phones, have incredible share due to the battery life and connectivity options. As phones extend into tablets, I expect us to see many more Windows ARM tablets in the future.”
The comments did not directly mention Windows RT, and focused on the smaller screen sizes – 6-inches and below - and some analysts took that to mean Microsoft might axe RT and promote Windows Phone, or converge the two ARM-based systems. However, Myerson is certainly responding to calls from some quarters that, given Intel's recent significant advances in tablet-focused processors such as Bay Trail, Microsoft should retreat from ARM and put its full weight behind the old Wintel platform that made its fortune.
Myerson also made more concrete statements about the harmonization of the Windows platform at the device end, something that has been discussed but not formally outlined. He told the analysts: “We really should have one silicon interface for all of our devices. We should have one set of developer APIs on all of our devices. And all of the apps we bring to end users should be available on all of our devices."