How the stars aligned against Microsoft at CES 2011

CES 2011 was one of the biggest and most bullish shows in years, but it was not a good one for Microsoft. See the four bad trends that conspired against Microsoft at this year's CES.
Written by Jason Hiner, Editor in Chief

This year's Consumer Electronics Shows was one of the biggest and most substantive in years as tech companies showed off some legitimately breakthrough products and transmitted a general sense of enthusiasm about the future and the innovations that are coming down the pipeline.

However, one big player that noticeably missed the boat on the big trends and failed to generate much enthusiasm was Microsoft. That's why I put Microsoft on the losers list in my post on the biggest winners and losers of CES 2011. Some people have questioned that choice, arguing that Microsoft just had a big success with Xbox 360 Kinect and announced Windows 8 for ARM at CES.

Kinect has been a huge sales success in the video game industry (which has been dying for a hot new product), even though Kinect is very gimmicky and the gesture interface still needs a lot of work. However, Windows 8 for ARM is not a game-changer for Microsoft. This is not about Microsoft scaling Windows down to run on smartphones and tablets, but ARM chips scaling up to be able to power desktops, laptops, and servers. Microsoft has always supported alternative architectures to x86 (NT supported PowerPC and Alpha) when it made sense. ARM chips are coming on strong and Microsoft wants to make sure Windows is an option on the new generation of low-cost PCs that will be powered by ARM chips.

The bigger problem for Microsoft at CES 2011 was that there were several red-hot categories where it should have been a key player but it got virtually shut out from all of the big announcements and the hottest products. That's not a good sign for Microsoft's prospects in 2011.

Specifically, here are four of the stars that aligned against Microsoft at this year's CES:

1. Vision-less keynote

This one was all on Microsoft itself. As usual, Microsoft had the beach-front property of CES keynotes as the first keynoter on the schedule on the night before the show officially opened. Unfortunately, Microsoft and CEO Steve Ballmer completely wasted the opportunity. It spent the presentation reviewing the new products that it launched in 2010, and even worse, it re-hashed some of the same demos from those product launches. Microsoft failed to give us a compelling vision for its place in the staggering changes that are sweeping through the computing world right now, especially the rapid transformation of the PC into smartphones and tablets. Also see: CES: It's time to yank Microsoft off the keynote stage

2. Partners pushed Android over WP7 phones

In the fourth quarter of 2010, Microsoft announced Windows Phone 7 devices with the help of major partners Samsung, HTC, LG, and Dell. While several of those devices just came to market or are still coming to market, those vendors spent CES touting their new Android devices. For all of them, the Windows Phone 7 devices were barely a footnote at CES.

3. No room in the spotlight for Windows machines

One of the usual features of CES is seeing the new lines of desktops and laptops from the major PC vendors. In fact, those new machines have traditionally been some of the headliners of the show by integrating the latest processors or newest hardware components (such as Blu-ray drives, etc.), or innovating with flashy new designs. That wasn't the case at CES 2011. Nearly all of the talk in the PC ecosystem was about new tablets and laptop/tablet hybrids, and nearly all of them -- with a few exceptions like the Samsung Sliding PC 7 -- were running Android. As with smartphones, Microsoft's big hardware partners were pimping Android instead of Windows

4. Nothing to show in tablets

Speaking of tablets, Microsoft had no story there. At last year's CES keynote, Steve Ballmer tried to steal Apple's thunder just a few weeks before the announcement of the iPad (the worst kept secret in tech at that point) by pre-announcing the coming of Windows Slate PCs. Other than the HP Slate 500, the tablets Ballmer touted last year never came to market due to software and battery issues. Since then, Microsoft hasn't given us anything else to believe in, as far as its tablet strategy goes. Sure, Ballmer promised financial analysts last July that Microsoft was working on an iPad rival and he told CNET in October that Microsoft was waiting for Intel's Oak Trail chips in order to create a great tablet, but talk is cheap. At CES 2011, even long-time chum Intel criticized Microsoft for waiting too long to get its act together on tablets. Ouch.

Is Microsoft doomed?

So, am I predicting the demise of Microsoft? No, I'm not saying it's over for Microsoft. The company still has plenty of great technology assets and a ton of smart people working for it. Microsoft's product quality has actually been pretty good over the last couple years. I've been impressed with the work they did on both Bing and Windows Phone 7, for example. The timing was late-to-market on both products and that will limit their success, but in both instances Microsoft showed that it can still execute.

However, Microsoft needs to figure out the vision thing, and just saying "Windows everywhere" is not the answer. Ballmer and crew also need to figure it out pretty quickly because things are accelerating faster than ever in the tech industry, and Microsoft has to stop playing catch-up and start getting out in front of some of these big trends.

Look at the Motorola Atrix, the new dual core Android smartphone that also doubles as a PC. This was a concept that Bill Gates championed over a decade ago, but who was the one who executed on it? Motorola, not Microsoft. At Motorola's press conference announcing the Atrix I just kept thinking,"How did Microsoft and Apple let Motorola beat them to the punch on this?"

What if Microsoft had built this kind of phone-docking technology into Windows Phone 7? I think the world would have been a lot more excited about WP7 phones. In fact, WP7 devices could have been the talk of CES as their hardware partners raced to offer the best WP7 phone + PC option. That's an example of the kind of excitement Microsoft needs to be generating. It didn't happen at this year's CES, and that's not a good sign for the former king of the computing world.

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This article was originally published on TechRepublic.

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