Microsoft launch an advertising campaign called Laptop Hunters where they give people a set amount of money to find a laptop to meet their needs. If they get it for less they keep the cash. The recent commercial has a kid and his mom shopping for a new laptop.

This marketing campaign does get enough credit for being smart and effective. Microsoft’s response to Apple’s commercials has been direct and bold. Given the current economic environment, people are much more focused on making every dollar count. And these commercials hit and the heart of Apple’s premium pricing which has helped them amass a war chest of cash. Now that premium pricing will be under pressure.

Many thought his pancreatic cancer had come back. But two weeks ago he tried to quell rumors about his health and said his weight loss was due to a hormone imbalance. Now he is being more definitive about how serious his health condition is. Below is the full text of his email.

Team,

I am sure all of you saw my letter last week sharing something very personal
with the Apple community. Unfortunately, the curiosity over my personal health
continues to be a distraction not only for me and my family, but everyone else
at Apple as well. In addition, during the past week I have learned that my
health-related issues are more complex than I originally thought.

In order to take myself out of the limelight and focus on my health, and to
allow everyone at Apple to focus on delivering extraordinary products, I have
decided to take a medical leave of absence until the end of June.

I have asked Tim Cook to be responsible for Apple’s day to day operations, and
I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our
board of directors fully supports this plan.

I look forward to seeing all of you this summer

Early in December photos leaked on the OPhone and it was rumored to be built on Google’s Android platform. This would be a big step up from Google’s G1 device in many ways. Lenovo and China Mobile could have a legitimate iPhone killer on their hands. Time will tell but if this is build on Android, Google is quickly closing the gap on Apple.

Apple had launched the iPod Nano a year earlier and the game was over. Apple’s unit volumes went up exponential and in no time,  everyone that was ever going to own a music device on the planet had an iPod. In Zune’s 2nd generation Microsoft started to get the software right and in many ways its superior to the iPod software but it seems too little too late. The puck is already shifting away from pure play music devices. 

At first you would think that this is a razor blade business. Sell the razor (hardware) for little to no profit and make all the money on selling razor blades (content and services). Except the paid content business is a horrible business. There is no money in that business, it just adds value to the device you are using. Apple makes all their profit selling hardware. So what is the future of Zune?

There has been a lot of specualtion that Zune will become a Microsoft phone. All of these rumors could not be farther from the truth. Zune is about the software. Its more of a strategy to compete with the growing dominance of iTunes than it is anything else. Microsoft needs a simple way to distribute software and services across the PC, phone, and TV. Right now Microsoft’s strategy for delivering digital content is extremely fragmented. For example, I cant get the same content on my Zune as I can on my Xbox 360. I also can’t easily share that content across other devices like my PC or phone. Microsoft has to fix this or they will never be able to compete with Apple for the consumer.

Apple also said they are no longer going to participate in MacWorld, which is in partnership with IDG. With consumer demand at an all time high for Apple products it seems they don’t think they need these types of industry events to build awareness of their products. Tomorrow wont be good for Apple’s stock (AAPL).

If I was Steve Ballmer I would be breathing a sigh of relief. Giving a keynote at CES two days after MacWorld would make anyone a little nervous.

What is interesting about this move is Microsoft is making Seadragon Mobile available on Apple’s iPhone even before you can get it on the Windows Mobile platform. Is this a change of heart for Microsoft? Probably not. Seadragon Mobile uses graphics accelerated hardware and there are not many devices on the market today that take advantage of those capabilities. Microsoft is probably using this as an opportunity to test some technology early and also doing a little bit of hedging.

Nokia who owns over 40% of the phone market should start getting a little worried. They sold over 430M units last year and their bread and butter segment was at price point below $100 for low end feature phones. This move by Apple can be a real game changer if it proves to be true.

Now 10K apps later the #1 “paid” app on iTunes is Koi Pond. This is a joke. Gizmodo gives an entire breakdown of the apps by category. The iPhone app marketplace has really blossomed into a freeware marketplace. The only really successful apps that will be high volume will be free. There is no money in building small little consumer apps.

The only reason Apple got 10K people to build apps was the hope it would lead to getting users. iPhone will create a concentrated set of users using a common platform. But similar to Facebook apps no one really looks at Facebook as a real application platform. It’s just a way to get access to a 120 million people that are all socially connected. And the only reason established companies will build apps is to stay relevant to iPhone users.

Developers are also constrained by Apple’s closed system approach. Similar to Chinese capitalism it looks and smells like a open marketplace but its not really open. I can’t wait until 2009 where Pong will be the #1 “paid” iPhone app.

Since Apple entered the cell phone business more than two years ago, the iPhone has gotten a lot of critical acclaim and has sold over 10 milllion units. This may be one of many lawsuits and come up because of its growing popularity. If the claim has any merit, my guess is Apple will settle for an undisclosed ammount. They have a track record of keeping things quite and paying off the people they need to.

Most of the attention was given to the update center on GPS and Google Maps. Now a user can see a 360-degree view of locations taken by Google car’s with cameras mounted to them. It also added walking directions in Google maps with information on public transportation.

In addition the iPhone can now download podcasts over the air using a Wi-Fi or 3G network. Previously users had to rely on syncing their content in iTunes. User can also now turn off the auto-correct feature on the virtual keyboard, which is helpful if the iPhone can’t guess what you are typing. Other additions include several bug fixes to the email and web browsing experience. It also includes fixes on phone quality to reduce dropped calls and improve sound. But with all these fixes how come no one in Cupertino created a “Copy and Paste” feature. This has been one of the most requested features from the iPhone community. I guess Steve Jobs in going to wait until MacWorld for that one.