So if you can believe some of the media chatter in recent months, the iPhone 5 was one huge failure, and therefore Apple is no longer the company to beat in the tech universe. Samsung is emerging victorious, except for the fact that, in the critical December quarter in 2012, the iPhone 5 beat the Samsung Galaxy S3 by a large margin. Mano a mano and all that.

Indeed, there are even reports that production of displays for the iPhone 5’s successor, the alleged iPhone 5s, will begin next month, making way for a possible introduction at a special Apple media event anywhere from August through early September. But that would simply be in keeping with an almost annual upgrade cycle. That doesn’t strike me as a rush, and didn’t Tim Cook state that Apple’s major new product intros wouldn’t begin until the fall?

So it was interesting to see that T-Mobile offered the iPhone 5 for sale on April 12, and, over the next few weeks managed to sell 500,000 of them. Sure, there was some level of pent-up demand, and it’s also true that a million or two iPhones were already activated on T-Mobile’s network, despite the lack of official support. Assuming T-Mobile can sell another 500,000 or even a million more before the end of June, that would amount to a pretty credible number, one that no doubt would provide a needed boost to iPhone sales if sales don’t drop too much at other carriers around the globe.

Now the most important aspect of this news is the fact that, until the iPhone was offered, T-Mobile’s prospects were on the decline. Customers were leaving, and T-Mobile’s leadership did admit the lack of the iPhone was a key factor. Now that this shortcoming has been remedied — and T-Mobile is engaged in an expensive upgrade of their network — both the carrier and Apple stand to benefit. T-Mobile has also acquired Metro PCS, a small regional carrier, which will surely enhance the combined carrier’s network as the two systems are integrated over the next year or two.

Recently, a tech publication did a bake-off of the camera system on the iPhone 5, which, as you recall, came out last September, against the cameras for the HTC One and Samsung Galaxy S4, which first reached dealers last month. You assume that the new hardware would be more capable of exacting the best possible image from their sensors under a number of different lighting conditions. Overall, the iPhone 5 was still judged better. Among smartphones, the iPhone reportedly deliver more online photos than the competition. Surprisingly, the iOS also counts for more Web traffic than other platforms.

Now this doesn’t mean that early demand for the new flagship handsets from HTC and Samsung won’t reduce interest in the iPhone this quarter somewhat. You have to expect that a lot of buyers want the latest and greatest. But those who are already invested in iOS are hard sells, and not everyone reads the tech columns in newspapers, or tech blogs. Or even Consumer Reports for that matter, so they aren’t aware of all the fine details of the various smartphones and mobile platforms.

Instead, you can expect many will stick with what makes them comfortable. Surveys also show that far more Android users plan to jump to the iOS than vice versa; three times as many. Less customer churn also helps Apple on the long haul, because loyal owners don’t care if sales drop in any particular quarter, or if the stock price is higher or lower. If their iPhone delivers a satisfactory user experience, and roughly 95% or so say it does, it’s hard to claim they’d be ready to jump ship the next time.

But the future of the iPhone and iOS will really come into focus during the keynote address at June’s WWDC. There Apple is expected to lift the veil off iOS 7 and OS 10.9. There are already rampant rumors about the expected changes, such as ditching the skeuomorphic excesses in the interface and dealing with long-standing inconsistencies. There may also be improvements to the venerable Mac Finder, which has been roundly criticized for years since OS X arrived. The iOS is said, by some, to be getting stale, so maybe Apple’s changes will be designed to make it seem more modern, or at least different.

Sure there may be more efforts to integrate some interface elements in iOS and OS X, but don’t expect anything that resembles the whole widget approach Microsoft took in the failing Windows 8. Apple’s product people won’t fall down that rabbit hole.

However, the real attraction of Apple is the hardware, and few expect more than a Mac refresh in June with more powerful Intel hardware, although it would be nice to see SSD drives available at more affordable prices. To say Apple overcharges is an understatement.

When it comes to the iPhone, with new competition, and anticipation of the next refresh, there’s no doubt there will be somewhat of a sales falloff, particularly at the end of the quarter. But that doesn’t mean there aren’t loads of customers who need one now, and aren’t as concerned that it may be seen as “obsolete” in a few months.

If you can believe Microsoft, over 100 million Windows 8 licenses have been sold so far. This number is consistent with the initial uptake of Windows 7, so you have to wonder how these figures are being collected, since PC sales continue to decline. Is it possible Microsoft is just lying?

Well, probably not. But what constitutes a sale?

It’s not just people downloading Windows 8 upgrades, actually. Microsoft earns most of its keep selling software licenses to OEMs, who bundle Windows with a new PC, any PC. So, yes, I suppose it’s possible that Microsoft has booked 100 million sales into its ledgers. But that doesn’t mean that 100 million copies of Windows 8, or anything close to that number, are in the hands of end users. It may also be true that there are tens of millions of unsold PCs in the channel. But that doesn’t matter to Microsoft, since a sale is a sale even if nobody is actually using the product.

This is similar to the IDC survey reporting that the percentage of Android tablets sold now exceeds the iPad, which is left with less than 40% of the market. Whereas Apple reports real sales, most of the other companies are reporting units shipped. It’s very easy to rack up a couple of million or so of each model just to reach all the resellers and distributors. It doesn’t mean all that product is actually sold, and it would be curious to see how many are eventually disposed of at fire sales, or returned to the manufacturer, depending on their return policies.

When it comes to Windows 8, it’s clear Microsoft isn’t getting the love, despite the claim of how many were sold. If manufacturers aren’t moving PCs as they used to, they will build less, which inevitably means sales of Windows 8 are doomed to decline.

The larger issue is why Windows 8 isn’t successful, and what Microsoft can do about it, if anything. One argument is the steep learning curve, that customers are forced to learn new skills, particularly the tiled interface formerly known as Metro. It’s certainly not very discoverable, and, unaccountably, Microsoft killed the familiar Start menu, although it can be readily replaced with cheap third-party utilities. Also, to use the key productivity apps, and that includes Microsoft Office, Windows 8 users must return to the desktop, so why bother with another interface at all?

Windows 8 becomes particularly irritating when you have a traditional PC that doesn’t have a touchscreen. Mousing around is tremendously awkward and unintuitive, but Microsoft clearly hopes that customers will come around eventually once they learn how things work. But they seem to forget that, until fairly recently, most Windows users around the world were using XP, dating back to 2001. Nowadays, Windows 7 has the majority of users, and they appear quite satisfied, so why fix what isn’t broken?

Microsoft’s planned fix is called Blue in development versions, an update to Windows 8 that reportedly will address some problems. While the feature set hasn’t been fully fleshed out, it is expected that the Start menu will return, as will the ability to default boot into the desktop layer. In that sort of setup, Windows 8 might be closer in concept to a Windows 7.5, since it will be quite similar otherwise.

This isn’t to say that Windows 8 or its heirs are destined to fail. It’s possible that, over time, as more and more Windows users buy new PCs with the OS preloaded, they will come to accept the changes and maybe embrace them. That might be true if PCs with touchscreens catch on, but that’s by no means certain. While touch is perfectly viable for a mobile gadget, such as a smartphone or a tablet, using your fingers on a regular PC screen, note-book or desktop, is a decidedly awkward reach. Convertible note-books, which can become tablet-like if you push and pull and tug and swivel and rotate them properly, are usually thick, heavy and awkward to use. Rather than offering the best of both worlds, you get the worst, the master of few tasks.

But Microsoft is in a box. The company believes that we all want the PC and mobile gear to be essentially the same, which is why the interface formerly known as Metro also inhabits Windows Phone devices. But it’s not as if Windows Phone has taken the world by storm, or even come close.

I suppose it is possible that a Windows Blue, which may be called Windows 8.1 when it arrives later this year, will provide the fixes needed to improve PC sales. But that ship may already have sailed, and unless Microsoft can convince skeptical customers to buy more PCs with Windows 8, sales will continue to fall.

Sure, Mac sales are flat too, but Apple still prospers if those customers move to an iPhone or an iPad or, even better, both. Windows users disgusted with Microsoft’s tone deafness, who still want a personal computer, may actually buy Macs.

So, yes, Microsoft may have moved 100 million Windows 8 licenses, but the new OS is far from successful.

As you know, when you buy an app, you don’t actually own it. You own the license to use it for as long as you like. And that can be a pretty long time, although new computers and new operating systems may make it impossible to use. So if you have Word 5.1a, released in 1992, which some consider to be the absolute best version of Microsoft’s word processor ever, don’t expect to have it work on your spanking new 2012 27-inch iMac.

That old version of Word was designed to work on a Mac using the original Mac 68K processor family. When Apple moved to the Power PC in 1994, there was a 68K emulator that allowed you to continue to use your older Mac software with somewhat less efficiency. But as Macs sped up, the emulated apps ran faster too.

In moving to OS X in 2001, Apple included a “Classic” environment that allowed you to run all those old apps in a separate window. There were some limitations that wouldn’t apply to Word, though Classic itself disappeared by 2006 with the advent of Intel-based Macs.

The main point, however, is that, without having to have an old Mac serving standby duty, you were able to use Word 5.1 on a reasonably current Mac for approximately 14 years. Nobody from Microsoft threatened to take your license away. It was yours to keep.

But software companies, particularly the larger ones, don’t expect you to run the same version year after year. Once they sign you up as a registered user, they hope you will continue to buy upgrades every two or three years, which can be a huge profit center, particularly at a time when sales of Macs and PCs have flattened. However, adding compelling new features to an app is increasingly difficult. Microsoft Office 2013, for example, seems to have precious few compelling new features. When you examine a typical Top 10 list, such as this one, it’s hard to find anything that actually makes you more productive. It’s more about adding touch support, and the ability to rent, rather than buy, your software.

Did I say rent?

Well, it appears one of the major success stories for Microsoft these days is the cloud-centered subscription service known as Office 365. What this means is that you agree to pay an annual fee for the software you want, and there are several packages that start with Home Premium at $99.95 per year. The fee also entitles you to SkyDrive cloud storage and other features. And, yes, you get a downloadable copy of the app to run on your Mac or PC.

Of course, when you stop paying, you’re no longer able to use the software. That’s a significant factor to consider if your income isn’t so predictable, which happens to many creative people who require such apps for their workflow. This “pay or stop using” scheme may keep a steady flow of cash in Microsoft’s bank accounts, but the customer suffers. While similar to a music subscription, you won’t lose the tools of your trade if you can’t play the latest music from Kenny Chesney or whoever.

With Microsoft, at least, you can still buy Office, so you aren’t forced to set aside an annual budget for keeping the suite active. That, however, will no longer be true if you want the latest and greatest creative software from Adobe.

This week, Adobe announced that they will not deliver a direct successor to Creative Suite 6. There will be no Creative Suite 7. Instead, they are moving to Creative Cloud apps. What this means is that, beginning in June, you’ll be able to download the newest versions of Photoshop, InDesign, Illustrator, Dreamweaver, Premiere Pro and all the rest for monthly fees. For the first year, users of Creative Suite 3 or later will be eligible for discounted monthly fees for the new Creative Cloud suite, beginning at $29.99 per month; students pay $19.99 per month. The fees will go up next year to $50 per month for a regular user (which means $600 per year).

But if you miss a payment, prepare to lose access to your software. I’m not going to go into the dirty details of the policies, and grace periods for late payments, but the overall impact is clear. Adobe wants you to pay forever. The change, according to a published report, will let Adobe engineers offer faster updates and more innovative features, though it is not certain as to why. Besides, if updates are frequent and ongoing, what about the major version upgrades that generate publicity and reviews? Has Adobe considered possible lost business as a result?

Fortunately, most software publishers haven’t adopted subscription-only schemes. From a company’s standpoint, they can be assured of consistent income, particularly from people who have no choice but to pay and pay and pay again until retirement. But it may also encourage users of Adobe’s CS software to stick with the versions they have and avoid this scheme. Yes, I suppose that the annual fees are probably little different than buying upgrades every couple of years, but at least you know that, once you pay for the app, a future financial calamity can’t put you out of business.

On the other hand, you also have to pay for your utilities and Internet access on a monthly basis, and they are critical to your livelihood as well. You don’t pay, your power goes off, the water stops working, and you lose your online access. Skip too many house payments, and it goes into foreclosure. So I suppose a monthly software subscription payment isn’t so unusual after all. However, Adobe’s current pricing model requires a one-year commitment; month-to-month is supposedly higher. If you fail to meet that commitment, you are still liable for 50% of the remaining charges. So I suppose Adobe may have to hire collection agencies to deal with people who fail to ante up if they break their contracts.

Apple is legendary for having a strong penchant for secrecy. The game plan is simple: Until they are ready to announce a new product, you won’t hear anything about it. Well, at least officially, yet in the weeks before the launch date, there will be a lot of rumors and speculation about what’s going to happen.

Now most of those rumors are nothing more than that. Or people are making guesses, some good, some bad, based on Apple’s previous behavior. That allows them to predict when a product might be refreshed. Looking at Intel’s processor roadmap, it’s very possible to choose the likely chipsets for a new Mac, although delivery dates might vary.

Apple did sort of quash the timeline for new iPads last fall, upsetting the annual cycle, so there is now talk of a fall refresh for both models. That Tim Cook already announced that new products would arrive this fall would seem to set the delivery dates in stone. At least that’s what it seems.

Continue Reading…