On Thursday, Goldman Sachs downgraded Microsoft shares to “Sell” from “Neutral” and Nomura Securities cut its call to “Neutral” from “Buy.” The moves came a day after  IDC called the first quarter of 2013 “the worst quarter” ever, with PC sales down 14 percent from the year-ago quarter. (Gartner numbers were slightly better: it had PC sales only off 11.4 percent year over year for the quarter.)

“At this point, unfortunately, it seems clear that the Windows 8 launch not only didn’t provide a positive boost to the PC market, but appears to have slowed the market,”  Bob O’Donnell, IDC Program Vice President, Clients and Displays said in a statement. (Full IDC statement here.)

Long-time Microsoft watcher Rick Sherlund at Nomura Securities wrote that the combination of “sluggish” Windows 8 adoption and the “lack of compelling new hardware is disappointing with no relief likely” until later this year when Intel releases the new Haswell notebook processor.

As if on cue, the Wall Street Journal (subscription required) reported that Microsoft plans a new 7-inch Surface tablet to come later this year.

Updated: To be fair, for the first quarter, IDC also acknowledged that industry darling Apple also faded. While it did better than the overall U.S. market, IDC said shipments of Apple PCs  slipped 7.5 percent — apparently because more people are opting for iPad tablets as PC replacements.

MSFT data by YCharts

This story was updated at 6:54 a.m. PST with Apple PC share decline.

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The group is called the Article 29 Working Party and, while it doesn’t make laws, it does have a great deal of influence over those who do, and over the way in which privacy laws are interpreted. Its opinion (PDF warning) on mobile apps will be unwelcome in many quarters because it states that just about everyone in the mobile industry — app developers, app store proprietors and even OS and device vendors — has a range of legal obligations around protecting and properly collecting and processing user data.

Compliance with E.U. data protection law means sticking to several principles. First and foremost, the user needs to give full and unambiguous consent to having their data processed. Data processing has to be for a legitimate purpose — like the app’s stated use case — and everyone has a responsibility to keep personal data secure.

Even those mobile players who are trying to stick to the rules may find the task more complex than they first imagine. Here’s an example given by the regulators (with bold type reflecting my emphasis):

“An app provides information about nearby restaurants. To be installed the app developer must seek consent. To access the geolocation data, the app developer must separately ask for consent, e.g. during installation or prior to accessing the geolocation. Specific means that the consent must be limited to the specific purpose of advising the user about nearby restaurants. The location data from the device may therefore only be accessed when the user is using the app for that purpose. The user’s consent to process geolocation data does not allow the app to continuously collect location data from the device. This further processing would require additional information and separate consent.

Similarly, for a communication app to access the contact list, the user must be able to select contacts that the user wishes to communicate with, instead of having to grant access to the entire address book (including contact details of non-users of that service that cannot have consented to the processing of data relating to them).”

How about app stores? Here, the working party recommends that apps “should not just be rated by users for how ‘cool’ they are, but also on the basis of their functionalities, with specific reference to privacy and security mechanisms”.

These kinds of recommendations may seem a tall order, but they are doable. However, the working party seems under no illusion about the challenge it faces. Here’s the whole problem with ensuring the rules get stuck to, distilled into a single passage:

“A high risk to data protection comes from the degree of fragmentation between the many players in the app development landscape. A single data item can, in real time, be transmitted from the device to be processed across the globe or be copied between chains of third-parties. Some of the best known apps are developed by major technology companies but many others are designed by small start-ups. A single programmer with an idea and little or no prior programming skills can reach a global audience in a short space of time. App developers unaware of the data protection requirements may create significant risks to the private life and reputation of users of smart devices. Simultaneously, third-party services such as advertising are developing rapidly, which, if integrated by an app developer without due regard, may disclose significant amounts of personal data.”

There’s the rub. The creation and distribution of apps can involve many, many parties, with services interlinked in a way that’s hard to keep track of — especially since one of the fundamentals of EU data protection law is that the user is kept fully informed of what’s happening with their data, the likelihood of proper compliance breaks down on that point alone. That’s before we even get to the thorny issue of who is situated where and whether sending data to that location means breaking the rules, or how many opportunities for a security breach get opened up by having so many links in the chain.

It’s one thing imposing these rules on a big cloud provider, but what about the one or two-person team that comes up with some app that taps into multiple APIs linking to services around the world? Are they supposed to have a designated data controller within their organization, keeping an eye on compliance? That’s hardly going to be top of their agenda when their app may have been created and set live practically on a whim.

What the Article 29 Working Party is doing here is noble — and I don’t mean that dismissively. We should all be thinking about this stuff. Low barriers to entry shouldn’t be an excuse for ignoring a cumulative effect of privacy erosion.

The question is, are these guidelines going to stay a wishlist, or are we going to see Europe’s regulators enforce them? That’s what these opinions often presage, so we may soon find out what privacy regulation really means in the mobile age.

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Yes, Canonical’s Ubuntu Linux has run on tablets before, but the upcoming version is the first to be engineered specifically with touch in mind. The idea is to have one code base running across all screens (more on that later), and a developer preview will come out on Thursday that can be installed not only on Google’s Nexus 7 and Nexus 10 tablets, but also on the Nexus 4 and Galaxy Nexus handsets.

We’ve already seen what the mobile version will look like, and now we know how it will look on tablets. In that form factor, it’s got several features worth mentioning, including voice-control for the heads-up display (HUD), multiple user accounts with full encryption, and the ability to multitask tablet and phone apps at the same time and on the same screen. The tablet can also be used as a thin client in the same way as an Ubuntu desktop can.

Here’s what Canonical founder Mark Shuttleworth had to say in a statement, and a video too:

“Multi-tasking productivity meets elegance and rigorous security in our tablet experience… Our family of interfaces now scales across all screens, so your phone can provide tablet, PC and TV experiences when you dock it. That’s unique to Ubuntu and it’s the future of personal computing.”

Unified code

Now, about that single code base. Over the weekend, KDE developer Aaron Seigo launched what was by open-source standards a broadside against Canonical, accusing the London-based firm of “duping” developers by claiming to be using the same code for all versions, but not doing so in practice.

Canonical responded yesterday by insisting the code really would be one-size-fits-all when it’s complete. It went on to say this would hopefully happen by the end of this year, and that the first public release of “the full unified code base” would be in Ubuntu 14.04, in April 2014.

In other words, what you can install on your Nexus this week is far away from being being the finished product.

Enterprise focus

This is partly a consumer play, hence the TV iteration. However, the features Canonical mentioned today should appeal to enterprises, some of which are running Ubuntu on the server and, in the case of a few, on the desktop too.

In general, businesses currently use Microsoft on the desktop, with Apple’s iPad serving as the tablet of choice. If — and it’s a big if — Canonical can find manufacturers to actually make Ubuntu phones and tablets, the idea of developing once across all these form factors will be extremely attractive, particularly with a big question mark hanging over Windows 8′s place in the enterprise.

Of course, by spring 2014 there’s a good chance that Microsoft will have released an obligatory service pack (or ‘Blue’ release, or whatever it will be called) that clears up the OS’s various quirks, effectively giving corporate customers the all-clear to dive in. And it’s quite possible that Windows 8 will also prove to be the consumer success that Microsoft hopes it will be.

But if Windows 8′s enterprise appeal turns out to be more Vista than XP, business customers won’t have many familiar options to fall back on, leaving Canonical in a good position.

A lot can happen in a year.

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“Nokia originally planned to develop a 10-inch Windows RT tablet equipped with Qualcomm’s S4 processor in first-quarter 2012, with Compal to undertake ODM production and initial shipments of 200,000 units to test the market, the sources indicated.

But because Microsoft later announced Surface, and the market for Windows 8/RT tablets needed to be proven, Nokia internally focused on smartphones, and delayed the development of the 10-inch Windows RT tablet, the sources pointed out. ”

Digitimes doesn’t have a perfect track record when it comes to such news, so I’m not yet sold on this actually happening. But Nokia has attempted to break into the Windows laptop market in the past. Amid falling phone sales, the company debuted the Nokia Booklet 3G netbook back in 2009.
Even if it this report does turn out to be true, I think it would be a mistake for several reasons. Experimentation is good, but Nokia isn’t in a position for a potential product flop. It’s simply too risky to debut a product — even as a market test — with hopes of success.

If such a test shows little to no consumer interest, analysts won’t be kind to the event. I’m also unsure of what Nokia has to offer the Windows RT market that would make such a product standout from competitors.

For smartphones, the company has a rich history in radio communications plus excellent camera sensors and optics. Could these help a Nokia-branded Windows RT tablet stand apart from the crowd? Color me leery. Camera benefits on a 10-inch tablet — which is the size being bandied around — aren’t likely to attract buyers. Integrated mobile broadband capabilities might, but these typically come with the baggage of a carrier contract; something the market has shown isn’t desirable for tablets.

Another thought: Part of what got Nokia into its current situation was product focus. The company at one time literally had a phone model for nearly every possible type of user, creating hundreds of unique designs. In short, instead of concentrating research, development and effort on fewer, better products in the line, Nokia wasn’t in a position to compete with the current smartphone kings.

There are other reasons for today’s challenges at Nokia, but product line focus is certainly one. Instead of divesting resources on a totally different product line with a smaller current audience (based on smartphone vs. tablet sales) where it has no expertise, building a Windows RT tablet seems like folly at this point in time.

That’s just my reasoning and it’s certainly arguable so share you thoughts in the comments. And to make things even simpler, jump into our yes-or-no poll on if Nokia should build a Windows RT device.

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To provide some background context, recall the popular news site launched an online TV network in August that streams 12 hours of live footage a day from New York and L.A. It’s a big investment, but the company is hoping its hyper-engaged user community will follow the brand into the video space, and that all that footage will produce buckets of viral content clips to spray across HuffPo and AOL web sites.

So what is the significance of the iPad app in all this? At first glance, not much. The app is simply another way for a user to watch the live stream — which features both ordinary people and celebrity guests like Bill Maher — while reading and adding comments, and sharing shows to Twitter or Facebook. Here are a couple of screenshots that show how comments can appear either stacked or tiled:

On its own, the HuffPo Live app is not extraordinary. Where it could be a real game changer, however, is the fact that the app can be slung onto a TV set using Apple TV. This means that Huffington Post has a chance to control not just a living room’s second screens but also the primary one as well.

In practice, this could occur if groups of friends watch the presidential elections on HuffPo Live and share comments in real time via their iPad — comments that would appear on their TV. If this comes to pass, HuffPo Live will have created what amounts to a walled garden extraordinaire in living rooms across the land.

But could HuffPo actually pull this off? In the short term, the answer is no, as the commenting system is too rudimentary. It allows users to like or flag a given comment but does not let users create a limited community like the ones they know on Facebook or Twitter. A company spokesperson says improved commenting features are coming soon (a Reddit-style up-or-down voting system might be one idea).

Meanwhile, bandwidth will provide another obstacle to HuffPo Live as most houses don’t have the capacity to enjoy an uninterrupted live stream on several devices at once. (Although, as Om’s recent account shows, things are improving quickly).

Still, the future prospects of a living room with a single media source dominating all devices is intriguing from both a user and marketing perspective. Will we one day see other content makers like the NFL or BuzzFeed try to do the same thing?

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Microsoft gets a lot of good marks for its hardware, which includes a keyboard cover and kickstand, though many question the usability of Surface when placed on a lap. But the bigger questions revolve around the Windows RT software, which is buggy and limited and isn’t able to run old legacy Microsoft applications the way Windows 8 devices can. Surface Pro, which will run Windows 8, will debut in a few months and may get a better reception.

Here’s a look at some of the comments from reviewers:

“Look, here’s the thing. You’d have to be fairly coldblooded to keep your pulse down the first time you see the Surface: its beauty, its potential, its instant transformation from tablet to PC. How incredible that this bold, envelope-pushing design came from Microsoft, a company that for years produced only feeble imitations of other companies’ fresh ideas. And how ironic that what lets the Surface down is supposedly Microsoft’s specialty: software,” said David Pogue in the New York Times.

“For all Microsoft’s claims to hardware perfection and software revolution, Surface RT is undone by too many little annoyances, cracks, and flaws. After the initial delight of an evolved tablet wears off, you’ll groan—because Surface brings the appearance of unity, but it’s really just the worst of both worlds. Instead of trading in your laptop and tablet for Surface, a cocktail of compromises that fracture the whole endeavor, you’ll miss them both urgently,” wrote Sam Biddle in Gizmodo.

“The big problem Microsoft has is that right now it doesn’t matter how good Surface is. The decision on whether or not to buy depends not on Surface itself, but on Windows RT. The only third-party applications that will run on Windows RT are those that use the Metro interface and are distributed through the Windows Store. At the moment, there just aren’t that many applications, and many of the ones that exist are mediocre,” wrote Peter Bright in Arstechnica. 

“For a device that’s supposed to feel more like an appliance, with seamless and beautiful software, there are a number of weird moments that scream “computer!” like black-and-white nightmares bursting into rainbow dreams. In general, the desktop environment feels like a trick, a kludge, because Microsoft didn’t have a fully touch oriented version of Office ready to go — so every time you want to use Word or Excel, you’re launched into Windows circa 2000-whenever,” writes Matt Buchanan of Buzzfeed.

“This is a great device. It is a new thing, in a new space, and likely to confuse many of Microsoft’s longtime customers. People will have problems with applications — especially when they encounter them online and are given an option by Internet Explorer to run them, only to discover this won’t work. But overall it’s quite good; certainly better than any full-size Android tablet on the market. And once the application ecosystem fleshes out, it’s a viable alternative to the iPad as well,” said Mat Honan of Wired.

“By supporting an ultra-thin, feather-light full keyboard accessory, the Surface instantly becomes one of the best tablets on the planet in terms of productivity without adding any bulk. Typing on a soft polyurethane keypad is not the same as typing on a regular keyboard of course, but I got pretty good with it after a few days of practice,” BGR,” said Zach Epstein of BGR.
“Overall, Microsoft has designed a beautiful tablet that’s unfortunately more functional as a laptop… on a desk. The styling and components are incredibly well made and high quality, but the form factor isn’t svelte or small enough to really come across as a true hybrid,” said Joshua Topolsky in the Verge.

“While (other) devices are primarily targeted at content-hungry consumers, the Surface is a slate upon which you can get some serious work done, and do so comfortably. You can’t always say that of the competition. It’s in the other half of the equation, that of the content consumption and entertainment, where the Surface is currently lacking. It needs a bigger pile of apps and games to make up for that and, while we’re sure they’re coming, we don’t know when,” said Tim Stevens of Engadget.

Stay tuned for our own review of Surface, as we take a look at Microsoft’s latest attempt at post-PC technology.

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This particular tablet uses an Intel Atom chip combined with the full Windows 8 desktop operating system. It can be used as a tablet for up to 9 hours on a single charge but Acer is also offering an optional dock accessory. With it, the W510 looks like a traditional laptop with a touchscreen display. The dock includes not only a keyboard and trackpad, but also a second battery that extends usage to 18 hours. Acer hasn’t broken out the dock price, but a 64 GB model of the tablet with dock is priced at $749.

When Microsoft debuted its Surface tablets for Windows 8, it declined to provide pricing details, saying only that the devices would be priced similar to Ultrabooks. Those slim laptops typically start around $700 to $799, so Acer’s new Windows 8 tablet is certainly in a reasonable price range by comparison. And Windows 8 RT tablets, which will run on ARM-based chips should be priced even lower than Intel-powered Windows 8 slates; a price of $399 to start is a reasonable possibility.

Acer’s Iconia W510 is certainly less expensive than an Ultrabook if one forgoes the keyboard dock, but I suspect most consumers will contemplate adding the option; after 26 years of Windows, it’s not known as a “touch friendly” operating system. Microsoft is working hard to change that with what it used to call the Metro user interface, but for most consumers, Windows means keyboard and mouse. Still, a positive first impression paired with a price that’s comparable to an iPad could sway purchasers this holiday season.

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A new division, headed by Saar Gillai, is charged with weaving the disparate pieces of HP’s cloud strategy and together, according to the report which cites an internal HP memo as its source. One of HP’s problems has long been that it fields a diverse and sometimes incomprehensible array of products and services. That may have been fine when HP was top dog and could sell anything. Now, that lack of clarity is a serious problem for a company that’s been trying to downsize its way to profitability. (HP will cut 29,000 jobs before October 2014.)

Update: Gillai will report to Zorawar Biri Singh, SVP and GM of HP Cloud Services, according to a CRN report posted Monday night. CRN cited what appears to be the same internal memo.

If true, this news shows that Whitman, who took the helm at HP just over a year ago and initially pledged to stay the course while she sorted things out, is taking charge of this cloud effort.

It’s hard to gauge the take-up of HP’s ambitious cloud effort. It rolled out the public beta of its OpenStack-based cloud in May but things have been quiet on that front since. That is probably not good news

HP has been hurt by what can only be called a dysfunctional board, a series of strategies and CEOs that are introduced then jettisoned, and what some say is a counterproductive dependence on Microsoft. It’s hard to tell at this point whether tweaking its new cloud strategy is the right thing to do or just another stopgap measure.

Feature photo courtesy of Shutterstock user  drserg

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But in an interview with The Seattle Times, CEO Steve Ballmer hinted that, with its new tablet, Microsoft is aiming to compete on features more than price. Ballmer said the “sweet spot” would be between “$300 to about $700 or $800.”

“I think most people would tell you that the iPad is not a superexpensive device. … (When) people offer cheaper, they do less. They look less good, they’re chintzier, they’re cheaper.

If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Kindle Fire, $199) to do their homework? The answer is no; you never would. It’s just not a good enough product. It doesn’t mean you might not read a book on it….”

The Verge points out that the company could still offer a lower price with a subscription to Microsoft’s Xbox Music service, but Ballmer’s comments seem to indicate that the vendor is planning to present Surface as a higher-end, highly functional device.

In the interview, Ballmer also said that while Microsoft was born as a software company, over the next five to ten years, the company will retain its core capability in software but evolve into more of a “devices-and-services company.”

“[That] is a little different,” he said. “Software powers devices and software powers these cloud services, but it’s a different form of delivery…. Doesn’t mean we have to make every device. I don’t want you to leap to that conclusion. We’ll have partners who make devices with our software in it and our services built in.”

Ballmer also defended the company’s so-called “stack-ranking” management system, which was called out as destructive and demoralizing in a damning Vanity Fair article in August on “Microsoft’s Lost Decade.” (In the system, supervisors are forced to place employees into tiers based on performance.)

While Vanity Fair said former Microsoft employees maintain that the system led to a counter-productive corporate culture, Ballmer said it rewards top talent and nudges lower performers to get with the program.

“I think you always want to have a system that has a chance to recognize people who are doing a great job, a good job, and helping people who are still doing maybe even a decent job, but they’re not doing as good a job as the other folks,” he said. “It helps to let those people recognize where they stand.”

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