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Hi Reggie,

Some days ago, we 'discussed' Nokia. We had a bit of a differing opinion, but I do agree MeeGo/ Maemo and Symbian were all pretty much dead in the water. Nonetheless, what I probably meant to say is, Nokia is trying to save money by means of ditching their R&D costs and 'buying' stuff from Microsoft in return for receiving back the costs - or so it seems. I thought this was a pretty stupid model, but given the farce that were their other operating systems you're probably right it was the best thing to do.

Nonetheless, I'm very happy to announce I found this great interview with Mr. Apotheker, CEO of HP, who says exactly (and far better than I can) what I intended:

"Apotheker Seeks to Save HP's `Lost Soul' With Software Growth"
http://www.bloomberg.com/news/2011-03-09/apotheker-seeks-to-save-hp-s-lost-soul-with-software-growth.html

You see, HP is going in _exactly_ the opposite direction as Nokia. Their Windows-phones never sold BTW. So they're (partially) ditching Microsoft and starting their own 'commodity-'software.

True, from a technical viewpoint WebOS two years ago was probably much better than Symbian (multitasking support, integrated social media and such), but nonetheless, in my opinion Mr. Apotheker is very convincing when he explains a tech company like HP shouldn't treat software as 'costs', but as investment.

Now, why is this important? Well, to be honest, my glass ball can't tell yet. But I do like guessing and doing some predictions which never come true. So here we go:

-HP is making one platform for all their devices, the way like Apple did. And the way Google is trying to. But HP's OS extends all the way from smartphones and printers to tablets and desktops. That's pretty unique, Apple can't do it (they have MacOS/iOS), Google can't do it (they have Android for mobile and ChromeOS coming for desktops).

-ChromeOS is coming to desktops pretty soon, though there's no date announced and nothing sure. If it does, it means margin compression for Microsoft, I guess. In my opinion however, Google is pretty slow when it comes to delivering operating systems in time. Honeycomb took _very_ long; and now the iPad2 is on the market earlier than Google's Tablet OS.

-The fact that HP is pushing WebOS, probably means they're less dependent on Microsoft. In the same way Verizon is less dependent on Apple than AT&T was, so Apple was less able to pull every pence out of Verizon, it will become harder for Microsoft to keep
their 'fat' margins with HP. If HP pays less for Windows, then so might Acer, Asus & co. I'm not sure what Dell is doing. I have the feeling they have been wanting to sell desktops without Windows for years, but MS somehow 'blackmailed' ("paid") them preventing them from selling desktops without Microsoft OS. Seems Dell sold 1 million Linux desktops, and still they're not advertizing. You do the math!

-Probably, both ChromeOS / WebOS desk/laptops will run on ARM-chips, the higher power / higher performance counterparts of the chips currently running the iPad, iPhone, Android phones and Android tablets. Which will probably mean margin compression for Intel too.

Now, normally WebOS would be another 'also ran', because I'm not sure they will gain enough momentum to survive against Android / iOS. But I think we should remember HP's the no.1. PC maker. Others might follow their example.

The result might be a balkanization of the mobile and maybe even on the desktop space, where every 'player' tries to create their own chain and not willing to cooperate with the competition. At least Apple and HP will, maybe add RIM, though I think they already are an also-ran. When considering MS/Nokia as a chain, there's four players, and then there's Google.

Apple/HP/RIM/MS-Nokia's success of their software is dependent on their hardware, and their hardware dependent on their software. But not for Google, they're more independent. I think selling on more hardware brands will be a benefit for them.

From what I read, HP is pretty serious about serving business with their tablets and WebOS (Apotheker came from SAP AG), just like MS (Elop came from MS Business), so it will be an interesting race.

What any of the above will lead to I'm far from sure, but I think we'll definitely see lower margins. Not only Apple will suffer, but I think Microsoft and Intel will too. Intel might suffer from cheap Chinese sillicon as well, because ex Chinese expats who developed in Sillicon Valley run their own chip business in China now; please refer for example to NuFront, which as far as I can tell is an 'unannounced' Microsoft partner. They're bringing 2Watt 2gHz dual core ARM-desktops running Windows(8?) for prices below $200 soon.

So for the consumer, everything will become cheaper. The market place will become more competing than ever, meaning innovation at an incredible peace. If I had any money, I'm pretty sure I'd buy ARMH (ending up in MS, Apple, Google, HP products, but also coffee/washing machines!) and for example QCOM/MRVL, not INTC; even while 'trading advises' at NASDAQ differ (Intel is at 'strong buy'). Luckily I don't have money, so for me there's nothing to lose making these glass ball predictions.

Sorry I don't tell much about Android, but I think you're far better at it then I am anyway.

Thanks for the article, and look forward to coming articles!