Microsoft News Tracker

Allchin Suggests Vista Won’t Need Antivirus

During a telephone conference with reporters yesterday, outgoing Microsoft co-president Jim Allchin, while touting the new security features of Windows Vista, which was released to manufacturing yesterday, told a reporter that the system’s new lockdown features are so capable and thorough that he was comfortable with his own seven-year-old son using Vista without antivirus software installed.

Hard news for the Windows Live OneCare and Windows Live Safety Scanner folks, I guess, but we’ll see how gentle time is in treating this hubris.

Then there’s Bill Gates touring Europe and whistling past the EU:

Microsoft Corp. Chairman Bill Gates said Thursday the company’s upcoming Windows Vista operating system has survived antitrust complaints by rivals who aimed to “castrate” it.

…

“Competitors tried to get regulators to castrate the product,” said Gates, adding they had largely failed. “I wouldn’t say antitrust played any dramatic role.”

The melodrama isn’t over until Neelie Kroes sings.

Update Nov. 12: Jim Allchin clarifies.

In advance of next Tuesday’s Zune launch, the reviewers have started to weigh in and, at best, they’re damning with faint praise:

Walter Mossberg, Wall Street Journal:

Overall, the iPod and iTunes are still the champs. Still, I expect the Zune to attract some converts and to get better with time. And this kind of competition from a big company with deep pockets and lots of talent is good for consumers in the long run.

David Pogue, New York Times:

Then again, this is all standard Microsoft procedure. Version 1.0 of Microsoft Anything is stripped-down and derivative, but it’s followed by several years of slow but relentless refinement and marketing. Already, Microsoft says that new Zune features, models and accessories are in the pipeline.

For now, though, this game is for watching, not playing. It may be quite a while before brown is the new white.

Stephen H. Wildstrom, Business Week:

Maybe I am underestimating the desire of people, especially those of the MySpace generation, to share music by a more high-tech method than passing earbuds back and forth. If I’m not, Microsoft’s only hope may be to top iTunes’ menu of video offerings before Apple comes out with an enhanced video iPod, which could happen as soon as January. It looks like it’s going to be a bumpy ride.

Edward C. Baig, USA Today:

Zune shows promise. But I’d like to see more offerings in the store, and less stringent wireless restrictions. And Microsoft should rethink the silly points system. For now, I’m sticking with iPod.

There’s more by following the links and at the Zune News Site’s Zune Reviews page where I got some of the above.

Update: Speaking of Zune and the press, Dare Obasanjo also recalls the kerfuffle on Monday when the mainstream press led by the BBC finally discovered that the Zune is incompatible with PlaysForSure. I didn’t mention it because I considered it a “d’uh moment,” but Obasanjo wishes that Microsoft still had Robert Scoble or the equivalent to put out the fires in the press. I’m getting the uneasy feeling it may take more than that.

In advance of the imminent console releases by Sony and Nintendo, Microsoft this week launched new high profile Xbox 360 games for the holidays: Viva Pinata (supposedly the “most important Xbox 360 release of the year“) and Gears of War, a much more likely candidate for being the Xbox 360 franchise game. Meanwhile, Microsoft is sticking by their Xbox 360 forecast:

Peter Moore, vice president of Microsoft’s entertainment and devices division which oversees Xbox, confirmed the company’s expectation that Xbox 360 shipments would reach 10 million by the end of 2006, and 13 million to 15 million by the end of its 2007 fiscal year.

The software company’s fiscal year ends June 30, 2007.

In October, the company said it had shipped 6 million consoles worldwide.

That’s 4 million additional this holiday quarter as Sony launches the PS3 and Nintendo launches the Wii. Sony, at least, will have product shortages, but bear in mind that the old PS2 still outsells the “new generation” Xbox 360 and that only 900,000 Xbox 360s were sold last quarter. Time will tell, but as I have said before, this one is Sony’s game to lose and Nintendo may yet be the spoiler for both of the high priced big guns.

More years ago than I care to recall, a friend remarked on a deal negotiated between a computer company and some music labels to the effect that while technology people always think they are slick negotiators, they can never match the ferocity and rapacity of the music mob. More empirical evidence for this hypothesis is provided by today’s expected announcement of an agreement between Microsoft and Vivendi Universal giving Universal a tax on every Zune sold:

Microsoft Corp. has agreed to pay Universal Music Group a fee for each new Zune digital music player it sells when the iPod rival launches next week, the companies said on Thursday.

The groundbreaking deal could redefine the digital music business pioneered by Apple Computer Inc.

Rivals including cell phone makers eventually could pay for hardware sales as well as for the music itself, Universal said.

Microsoft is trying to break into an industry closely aligned with archival Apple, which is credited with nearly single-handedly building the legal Web music world with its iPod players and iTunes music store.

But Apple does not give a cut of sales of iPods to music companies. It only pays labels for songs sold on its iTunes music store.

“We felt that any business that’s built on the bedrock of music we should share in,” said Doug Morris, chief executive of Universal, owned by French media giant Vivendi.

I wonder how good Mr. Morris’ Godfather impersonation is? The formal announcement will be later today, when we’ll get the definitive word on how Microsoft plans to spin this turkey, but here’s a hint:

Redmond-based Microsoft Corp. is pursuing similar agreements with other major record labels, Chris Stephenson, general manager of global marketing for Microsoft Entertainment, said late Wednesday.

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By paying record labels a portion of Zune player sales, Microsoft hopes to have more freedom to allow song-sharing or other promotions, Stephenson said.

“There’s certain marketing elements that we’re looking at going forward, all based around the sharing and wireless scenarios,” he said. He declined to provide specifics.

But in an interview late Wednesday, Universal Music Group Chairman and CEO Doug Morris told The Associated Press that the wireless song-sharing feature of the Zune was not a major factor behind the company seeking a revenue sharing deal on the player.

“The only factor was that we feel that there’s a great deal of music that’s (stored) on these devices that was never legitimately obtained, and we wanted to get some sort of compensation for what we thought we’re losing,” Morris said. “I want our artists to be paid for the music that makes these devices popular.”

Gosh! It’s all about the poor starving artists, I guess. Actually, it may be better for the artists than the music labels’ arrangement with YouTube before the Google acquisition:

The media companies had their typical challenges. Specifically, how to get money from Youtube without being required to give any to the talent (musicians and actors)? If monies were received as part of a license to Youtube then they would contractually obligated to share a substantial portion of the proceeds with others. For example most record label contracts call for artists to get 50% of all license deals. It was decided the media companies would receive an equity position as an investor in Youtube which Google would buy from them. This shelters all the up front monies from any royalty demands by allowing them to classify it as gains from an investment position. A few savvy agents might complain about receiving nothing and get a token amount, but most will be unaware of what transpired.

That kind of makes you wonder if the Zune Tax actually counts as a license payment, doesn’t it? 

Anyhow, Microsoft is coming from a position of weakness since the Zune is starting from way behind the iPod and so they apparently folded like a house of cards when the music labels came knocking and offered them some “protection.” As I said at the start, I’m not really surprised, but one wonders how Steve Jobs got to be savvy enough to face down the media bruisers. Maybe his time at Pixar stood him in better stead than we can imagine.

Update: For a similarly dyspeptic view with a gangster theme, see Om Malik’s Microsoft, Zune & The Music Mafia.

Update: For an alternative view, watch Jupiter Research’s Joe Wilcox try to put lipstick on the pig.

Update: This is apparently the press release although I coudn’t find it on either the Microsoft or Universal Music Group websites. There’s not much there besides more starving artist platitudes from both Microsoft and UMG, but here’s another theory: Microsoft To Give Portion of Zune Sales To Universal In Attempt To Hurt Apple. I enjoy a good conspiracy theory, but ineptness seems to be an adequate explanation here.