Anticipating Steve Jobs' Response to Windows 8 and Ultrabooks

Apple (Nasdaq: AAPL  ) has been the hidden target of announcements from both Intel (Nasdaq: INTC  ) and Microsoft (Nasdaq: MSFT  ) . Intel is promising a MacBook Air/iPad experience with the ultrabook, and Microsoft is showcasing a PC interface that rivals its Windows Phone 7 platform. But Steve Jobs is going to be keynoting soon as well, and he will want to remind folks he is driving this bus. Since I will be covering this drama for one of the big news networks, let's anticipate what Jobs is likely to say.

Setting the stage with Windows 8 and Ultrabooks
Intel and Microsoft, though clearly not together, actually presented a compelling picture of the future that will start in the second half of this year with ultrabooks and Windows 8 in late 2012. Ultrabooks promise the benefits of the iPad and MacBook Air with prices closer to the iPad. These products are expected to be thin, light, and with battery life for light duty that rivals the iPad.

In 2012, they will get Windows 8 and touch capability, which jumps to a primary interface with this new OS, and the interface in Windows 8 is designed to favor it. Windows 8 will span devices that start with iPad-like tablets and scale to performance desktop PCs, and monitor vendors are already starting to get touchscreen monitors ready for next year.

Wrapped with application stores, built-in Skype capabilities, and rich media from a variety of online sources such as Windows Live, Xbox Live, and Office Live, coupled with games and applications designed with the new interface, this is a big push from Microsoft to take back the future of the PC. Along with Intel, they are arguing strongly that the PC era isn't dead; it was just taking a little break.

Steve Jobs' opportunities and problems
It is clear that Jobs will be showcasing Lion and his new cloud media services. Apple struggled with MobileMe, but Jobs purged that group before going on leave, and the new folks -- and the folks who are left -- know their jobs are on the line and are likely to execute sharply this round. Apple's advantage is the control of the platform. It has one primary service in iTunes, which is both dominant and entrenched, and is currently the poster child for the future of personal technology with the iPad and iPhone.

Among Apple's disadvantages are that it's increasingly becoming the biggest security target and that it suffers from channel limitations, particularly in Europe and Asia (Apple just isn't in as many stores as PCs are). It's still one company against an industry. It's suing Samsung, one of their big suppliers, and Intel is pushing for a non-iPad/iPhone solution. Meanwhile, the iTunes Store has been down for some time this week, and the company has already indicated there will be no new hardware announced at the show -- so don't expect the iPhone 5.

Steve Jobs' magic trick
Jobs regularly undersets expectations on purpose to get the pop from folks who are later surprised. I wouldn't rule out the possibility of an iPhone, but with regard to content, he is likely to attack on several vectors. With OS X Lion, he'll probably argue that what Microsoft is going to have in 2012, Apple will have something better in 2011. He doesn't like to preannounce products, but it wouldn't be hard for him to hint that the same technology that will be in ultrabooks will be available to Apple and that Apple has more experience with iPad and MacBook Air devices, because Apple invented them.

Real showstoppers would be an early move to touch for laptops (rather unlikely, as Jobs mentioned in the past that touch doesn't work on vertical screens) or a move from Intel to ARM Holdings (Nasdaq: ARMH  ) for laptop and PC chips. I wouldn't bet on those, but either could steal the show from Intel and Microsoft, and Jobs loves to steal the show. He may compare Windows 8 to the failed Origami Windows 7 platform, and it would be in character for him to start getting people to think about the new Windows 8 as the Windows Vista Origami with lipstick.

Movie deals surrounding iCloud and subscription capability for both video and audio content are likely and could be his traditional "one more thing" ending, if he decides to wait for the iPhone 5 announcement that is expected for September.

In the end, he is going to go in hunting for bear. The fact that this may be his last launch may put a small cloud over his performance.

The advantage of going second
The advantage Steve Jobs and Apple have by going second is that they can go over the Intel and various Windows 8 claims for several days and craft a response that will devalue them. The biggest exposure for Microsoft is the relatively late release of Windows 8. For Intel, it is the chance that Apple might go with ARM top to bottom. For Apple, it is the advantage that potential buyers could be waiting until the Windows 8 hardware and software shows up and not choosing Apple as a result. The stakes are high in this game. Steve Jobs' keynote next week will be fascinating to watch.

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Read/Post Comments (9) | Recommend This Article (6)

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  • Report this Comment On June 04, 2011, at 11:47 PM, skippywonder wrote:

    An "ultrabook" (really nothing more than a thin and light and fast notebook, so read "next generation laptop") running Windows 8 is exactly the kind of stale technological thinking that has so many companies chasing Apple. Apple is like the sports team that develops entirely new defensive or offensive schemes. It twists the old preconceptions and produces an evolutionary product that seems revolutionary. These other companies are like the old guard sports teams that are convinced the strategy to defeating these new schemes is "run our old plays better". The result is always the same. Those who get on board and adapt to the new paradigm by understanding how it is constructed more than simply copying what they see are successful. Those who parrot what they think the other guy is doing, or stick with their old way of looking at the world simply fail.

    The iPad has nothing to fear from a fast and light laptop running the latest and greatest from Windows. An old laptop might have something to fear, but not an iPad.

    Companies thinking of touch as a mechanical interface that must be incorporated or thin and light being the new design spec they must chase are really missing the point. It is about the user's relationship with the technology. A tablet needs to be light enough to hold comfortably in one hand at least for a little while. Touching the screen creates an intuitive relationship and helps diminish the user's consciousness of the interface. Poking at a thin and light laptop screen is unlikely to produce the same seamlessness. It will probably feel like using a flimsy ATM.

    These companies need to worry a lot less about Apple and think a lot more about how they could themselves own the next evolution of the user- technology interface. A laptop (and OS) that responds to where you look on the screen, for example. That would be so intuitive as to seem "magical". Chasing down a bunch of borrowed ideas from Apple? Not so much.

  • Report this Comment On June 05, 2011, at 12:00 AM, tomhanks wrote:

    "An old laptop might have something to fear, but not an iPad."

    There are an order of magnitude more old laptops out there than there are iPads. MS has maintained strong sales and continues to dominate in the business market. My expectations are that these new ultrabooks will continue the steady growth seen year after year in the existing notebook/laptop market.

  • Report this Comment On June 05, 2011, at 2:44 AM, skippywonder wrote:

    "My expectations are that these new ultrabooks will continue the steady growth seen year after year in the existing notebook/laptop market."

    My feeling is that if this kind of thinking is driving your investing, then you are on a very short horizon. A couple, maybe three years. The overall PC and tablet market will continue to grow, but tablets will be the lion's share of this growth. PC sales are already stalling out. We are nearing a time where there will be fewer laptops sold each year. Sure, it's always important that these techs improve and there will be a role for laptops for years to come, but if either Microsoft or Intel think that a better laptop is the answer to the new paradigm in computing, they are mistaken. Investors who count on growing laptop sales to drive stock prices will not be rewarded for their faith in old fashioned technology.

  • Report this Comment On June 05, 2011, at 4:15 AM, Henry3Dogg wrote:

    "Among Apple's disadvantages are that it's increasingly becoming the biggest security target..."

    Wishful thinking.

    At worst Apple retains the advantage that it is vastly more secure than it's competitors. It's security is first rate. There are no viruses on MacOS. The only malware about is based on conning users to install the malware, and not on any insecurity of the system.

    In fact most cons relate to people being told they need antivirus software, and that includes the big antivirus vendors.

  • Report this Comment On June 05, 2011, at 5:11 AM, EvenSteppinWolf wrote:

    hey skippy

    couldn't agree with you more. totally well stated.

    peace

  • Report this Comment On June 05, 2011, at 5:20 AM, EvenSteppinWolf wrote:

    btw and fd, i now own a fair amount of msft for once in my life (i live in seattle), cuz i think it has a few points of upside and littler downside---and a divy---, assuming the market stays intact.

    but aapl is still a core holding...

    (if aapl starts tanking big time, lord help the market. canary in a coal mine)

  • Report this Comment On June 05, 2011, at 7:52 PM, WaltFrench wrote:

    Ask yourself this ONE question, @Rob: how much of ANYTHING that has driven Apple to its phenomenal success is a *response* to Intel and Microsoft?

    Apple has blazed incredible new ground the last 10 years, some of it in cooperation with Intel, some without it. Some collaboration with Microsoft, most not. But all of it laser-focused on what Apple could do to meet user needs that were unmet otherwise, referencing Wintel only by (mostly) correctly guessing that Apple could have a market to itself for 5 years by striking ahead.

    So 12 years ago, the Wintel Duopoly had market cap roughly 100 times Apple's, and Friday Apple passed the total of MSFT+INTC. Investors see Apple as blazing the new growth trail.

    Apple is NOT going to spend its time looking at the rear view mirror, watching some smoke-belching old truck recede farther into the distance.

    2011 is about the ubiquity of Apple: on your desktop, on your laptop, on your phone, in your briefcase, on an internet cafe computer in Peru. Various tools (such as the Time Capsule replacement) to make your files, your licensed media, your work modality, all instantly accessible anywhere. Of course, they will not achieve this in one fell swoop; the question is how close they will come to perfection.

    Not how many months ahead of Microsoft they are. Heck, MS already offers sharepoint stuff that nobody knows how to use.

  • Report this Comment On June 05, 2011, at 10:11 PM, beetlebug62 wrote:

    Holy cow, you're aggregating Enderle's ravings now?

  • Report this Comment On June 11, 2011, at 8:33 PM, BillStacker wrote:

    Steve Jobs's respond to the Ultrabook, "no comment"

    ...but look for an Intel driven Macbook Air coming soon. Apple will respond with the world's best "ultrabook" but it will have Intel's silicon in it, no doubt.

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