Microsoft is coming and coming hard to overtake Google's Android foothold and put a serious dent in Apple's (unfragmented) mobile dominance.
I've got to think the decision to coin the latest Xbox iteration "SmartGlass," unveiled at the E3 conference in Los Angeles Monday, serves as a subtle shot at Google. Of course, one of these days Google will release "Google Glass," a futuristic set of specs you can use to activate your every whim.
As I explained earlier this week on TheStreet, thanks to Xbox's popularity, Microsoft already dominates Google and Apple in the living room. And, by leaps and bounds, it owns the desktop/laptop OS market.
Consider the brilliant position Microsoft is in point-by-point:
- It used gaming as the gateway to make Xbox the leading full-service streaming device.
- Comparitively, both Google TV and Apple TV have been miserable failures.
- Steve Jobs figured out the living room, but a mere mortal, Tim Cook, needs to realize the dream.
- Cook better hurry or iTV will be a niche and Xbox SmartGlass will dominate just as the present Xbox does in the living room and Windows does on computers.
As an illustration of Apple's challenge, consider why the corporate world shifted faster than a speeding bullet from Research in Motion's Blackberry to Apple's iPhone and iPad.
Of course, employees provided the catalyst. The days of seeing a person in a suit fumble with a Blackberry in one hand and an iPhone in the other are long gone. Employees voted as consumers and, in the name of convenience, IT departments had no choice but to dump RIM for Apple.
Apple's dominance in the consumer space inevitably penetrated an area RIMM bulls considered protected – enterprise. Better design. Better hardware. Better software. Better user experience. Better overall products. Steve Jobs anoints apps the future. Jim Balsillie pushes back to the contrary. Jobs wins. You win. Balsillie loses. RIM loses. Don't blame Canada.
It's all pretty straightforward.
Expect to see a similar dynamic play out as Microsoft forges ahead admirably with Xbox SmartGlass and Windows 8.
Whatever you do, do not call it Zune. Zune lived a horribly unsuccessful life and died a slow and painful death because it was little more than a hasty reaction to Apple's dominance via iTunes. It never stood a chance. The only thing that was more pathetic was the Blackberry Music Service Balsillie unveiled last year (remember that!?). In a few months, we might be able to say the same thing about the iPad Mini, Cook's reaction to a non-threat.
With Xbox, it appears Microsoft, of all companies, is the one that really had the living room "figured out." It should come as no surprise that, for many, gaming on Xbox, particularly SmartGlass, will be an afterthought. I'll likely ditch my Roku player for the device when it comes out later this year.
Whether Microsoft just got lucky or it knew what it was doing all along, investors should not underestimate the magnitude of what's about to happen.
You sit in front of the television set or your computer (odds are that TV is not connected to Apple or Google TV and you run Windows on your computer) with your smartphone or tablet in hand. With SmartGlass, Microsoft looks to provide a seamless, fully-integrated experience.
While SmartGlass will apparently work with Android and iOS devices, if it comes through as billed and as expected, it should further drive the already dominant market shares of Xbox and Windows, while providing an important boost for the company's emerging mobile push. It builds the brand and it helps infringe, at least a little bit, on Apple's "cool." Expect Android's share to drop like a rock in 2013; there's much less loyalty there.
Apple bulls will call this analysis extreme. They need some perspective. The stakes are much higher for Apple than they are Google. Android is truly a "hobby" for Google, which generates almost all of its revenue from advertising. Apple relies on constantly wooing potentially fickle consumers.
If Microsoft beats Apple (and Google) to living room dominance (wait! It already has) . . . or, better yet, further extends its lead with SmartGlass, Apple's next big thing – iTV – will hit the market with a Ping-like thud.
Sure, it will do well, but if its impact comes in anywhere south of iPad's, Apple loses. Coupled with a surging Microsoft in the mobile space, Wall Street will perceive the unthinkable – a real challenge to a Steve Jobs-less Apple.
Even without this potential pressure, those lofty price targets would have been difficult, if not impossible, for Apple to hit. With it, the odds drastically decrease.
iTV was never a lock, though it absolutely needs to be. Microsoft might have just beat Apple (and Google) to the punch and thrown a wrench in the plans Steve Jobs presumably left for Tim Cook.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.