Silicon Insider: Why Touch Screen Is King

May 30, 2008 — -- When it comes to investing in the future of high-tech, I would suggest buying stock in a screen cleaner company.

It's been a slow week for technology news, so most of the attention has focused upon D6 -- the sixth annual All Things Digital Conference being held in Carlsbad, Calif., and hosted by Walter Mossberg and Kara Switzer of The Wall Street Journal.

D6 is rapidly becoming the pre-eminent event for leaders in the tech industry, not least because it's a way to legally cozy up to two of the pre-eminent figures in business journalism without either side being accused of conflict of interest. As such, it has become a very safe venue for companies such as Apple and Microsoft to offer early glimpses of upcoming products.

With Apple staying undercover this year with its new (solar-powered?) iPhone, D6 has turned into a promotional platform for Microsoft, which is desperate to show that it is not as operationally inept and technologically out-of-touch as the world has concluded it is after the endlessly awaited and ultimately disappointing introduction of its Vista operating system.

For all of its geegaws and new market thrusts (remember last year's "table" computer), Microsoft is really a company with just two important products: Windows and Office. They are the company's bread-and-butter, and no matter how many statistics the company hauls out to prove, by sales or units shipped, that Vista is a success -- it was, in fact, a fiasco. The delays in its delivery almost killed the personal computer industry, the finished product proved unreliable (at least that's the public perception -- I, for one, have had no problems) and most of all, at a time when Microsoft was trying to show that it was still a player, still an innovator, Vista was a disappointment: It had far too many shoulda's and oughta's. Microsoft had talked Corvette, but delivered a Caprice.

That makes the next Windows generation -- Windows 7 -- particularly important to Microsoft. Not only does it have to undo some of the PR damage left in the wake of Vista. Just as important, with Bill Gates' pending departure from company operations, Microsoft users (and employees and shareholders) need some evidence that Steve Ballmer can do more than shout and posture. And right now, thanks to Vista and the failed Yahoo takeover, Ballmer's record is looking a little thin on wins.