By Kevin Kelleher, contributor
FORTUNE – Imagine it's 1999. Scratch that, it's 2006.
The computer in your office is made by ... well, it doesn't matter who it's made by. Unless you are in a creative profession, that computer is run on Microsoft Windows. And the phone in your pocket is made by Nokia (NOK), or -- if you're feeling stylish -- Motorola. Apple (AAPL) made your mp3 player (yeah, back when we still called them mp3 players), and Samsung made your display screen, or your TV screen, or both.
Just close your eyes and go back to that crazy 2006 mindset (here's a link to help, if you need it). Apple was killing it on iPods and iTunes, not in its original mission of personal computers. Google (GOOG) was just a search engine, a filthy rich search engine. Nokia still ruled mobile phones, although Motorola's Razr owned popular culture. And Microsoft (MSFT)? It was still Microsoft, the grating white noise of personal computing that Bill Gates designed the company to be.
In the seven years since, so much has changed, which in the tech world isn't notable. What's strange is how it changed. Apple's mp3 player mutated into a mobile phone that changed everything. And it mutated again into the iPad, changing the personal computer. Yet somehow Samsung sold more smartphones using an operating system powered by, of all companies, Google.
And Motorola? Its mobile-device business was bought by Google. And Nokia? Its core devices business has been bought by Microsoft. The software companies began to eat the hardware companies because they needed to act like Apple, which married software to hardware ... oh, three decades ago. And search ate Motorola smartphones. And Windows consumed Nokia smartphones. And Samsung, the maker of those excellent TV screens in 2006, sat there sticking its tongue out at everyone else.
And no one -- no great master of the chess board that is the technology landscape -- saw this coming. Maybe one part of it, yes, but not all of it. Because if you live in the past or the present, none of it could possibly make sense. This is all about a bunch of wild guesses about the future.
So what are we to make of Microsoft and Nokia? In the past day or so, there has been so much to say. Opinions on the deal run the gamut from approval to scoffing to the purely perplexed. (Mostly scoffing, however.) But how are we really to know? The evolution of the mobile web has surprised longtime web observers the same way the desktop web surprised everyone involved with the tech industry that preceded it. Only, in some ways, the mobile web has offered even more surprises.
People who in 2006 couldn't predict what 2013 would bring to tech giants like Microsoft, Google, Apple, Samsung, Nokia, and Motorola are now confidently tweeting the future of Microsoft and Nokia. People who could make no good sense of Google-Motorola two years ago (I'd wager Larry Page was among them) have a sure view of where Microsoft-Nokia will go. And good for them.
Yes, this deal may very well amount to tying two sinking bricks together, etc. And both Microsoft and Nokia face uphill battles. But at the same time, in the early days of September 2013, the only honest analysis you can give is that a mobile web everyone saw coming yielded a competitive landscape few expected. And if we can't foresee which company will be on top in another several years, the best we can do is look at similar deals that have happened in recent years.
Which brings us to Google's purchase of Microsoft, announced a little more than two years ago. At the time, people struggled to understand the sense of it. People speculated, as they do with Microsoft's Nokia investment, it had to do with patents. That Google would simply spin off Motorola's manufacturing operations. At the time, it seemed like the most likely explanation.
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But Larry Page, Google's new CEO, took a different direction. He held onto the Motorola devices that had been outmoded by Apple's iPhone. Although Motorola has been a drag on Google's earnings since then, the move seems prescient now. Software hasn't just supplanted hardware in the past decade. It needs hardware as an ancillary business. Microsoft's unexpected introduction of the Surface underscored that idea. And now its Nokia deal makes it seem that much more inevitable.
In other words, many companies can produce software on their own, but once you get big enough, you need hardware in the mix to stay on top of the game. The old cliché that the line between hardware and software was blurring has become an industry maxim. Software giants are doubling as hardware companies -- Google 2010 (Motorola), Microsoft 2012 (Surface) and 2013 (Nokia). Others going it alone -- like Amazon (AMZN) and Samsung -- will have to adapt. Still others, like Apple (early 1980s), took this route years ago.
The mobile revolution at the center of technology innovation today may be protean and hard to predict, but one thing is certain: The old lines -- like what is a PC and what is a portable device, or what is a software company and what is a hardware maker -- are dissolving. Yes, Microsoft and Nokia may be several years late to this game, but at least they're there.
And this mobile game isn't finished offering up its surprises.
iTunes, Software, Services has become Apple's fastest growing revenue stream.
FORTUNE -- Analysts tend to think of the iTunes store as a metaphor. It's a "moat" that protects Apple (AAPL) from competitors. Or something "sticky" -- like honey or flypaper -- that keeps fickle customers from flying away.
But since Apple reclassified its revenues in January and consolidated iTunes, Software and Services into one line item, it's become clear that iTunes is MOREPhilip Elmer-DeWitt - Jul 21, 2013 7:32 AM ET
There are parallels between today's trolls and the so-called sharks of the 19th century.
FORTUNE -- Complaints about patent trolls have reached such a level that the White House is now pushing for reform. Some people might believe the problem to be relatively new. And it is, in a way. But there were patent trolls in the 19th century, and they behaved in much the same way as modern ones, causing MOREDan Mitchell, contributor - Jun 7, 2013 7:35 AM ET
Patrick Grady argues entrepreneurs see the world not as it is, but how it could be
FORTUNE -- Fortune's Brainstorm Tech Conference (July 22-24 in Aspen, Colo.) regularly brings together the best and brightest minds in tech innovation. Each week, Fortune will turn the spotlight on a different conference attendee to offer his or her own personal insight into business, tech, and entrepreneurship. This week, we asked Rearden Commerce Chairman and MOREJun 6, 2013 12:22 PM ET
China has long been a piracy trap for Microsoft. It hopes it can change that with new product launches and thousands of new employees in the country.
By John Foley, Reuters Breakingviews
FORTUNE -- Microsoft is staging a comeback in China. The world's biggest software maker hopes to use the twin technological disruptions of cloud computing and mobile devices to get a second bite of a market where profit has proved elusive. MOREMay 29, 2013 10:58 AM ET
Have a fancy navigation system? It's probably running software built by QNX, a little-known but powerful Canadian company.
By Kurt Wagner, reporter
FORTUNE -- Under the bright lights of the Consumer Electronics Show in Las Vegas last January, a stunning black Bentley sat with the top down on the showroom floor. The Bentley -- a Continental GTC convertible starting at $191,000 -- became the center of attention throughout most of the MOREApr 5, 2013 7:12 AM ET
Networking giant Cisco wants to double its revenues from software, as its so-called collaboration business continues to change.
FORTUNE -- Cisco Systems' "transformation" into a more software- and services-centric company is far from complete. Over the next five years, the San Jose-based networking equipment giant plans to double the amount of revenues that come from software from $6 billion to $12 billion. To that end, it's announced a string of software-related MOREMichal Lev-Ram, writer - Mar 28, 2013 7:06 AM ET
According to the Korea Times the device was supposed to be unveiled a month ago
FORTUNE -- Last September, two weeks after it lost a $1 billion patent infringement verdict to Apple (AAPL) and four days after Apple introduced the iPhone 5, Samsung's home-town English-language newspaper -- the Korea Times -- had a scoop: Citing company officials and local parts suppliers it reported that Samsung would introduce a new smartphone -- the MOREPhilip Elmer-DeWitt - Mar 18, 2013 7:57 AM ET
Digital ad management platform provider Marin Software seeks a $75 million valuation.
By Kurt Wagner, reporter
FORTUNE -- San Francisco-based Marin Software filed a Form S-1 with the Securities and Exchange Commission Wednesday to begin an IPO. The company, which provides a digital ad management platform to customers such as Macy's (M) and Netflix (NFLX), is seeking a valuation of $75 million. Goldman Sachs (GS) and Deutsche Bank (DB) are lead MOREFeb 15, 2013 1:38 PM ET
With Splunk, Godfrey Sullivan pulled off one of 2012's strongest IPOs. But it's his hobbies and no-drama management that have made his reputation.
FORTUNE -- Godfrey Sullivan has an odd idea of fun. For the past two decades the 59-year-old chairman and CEO of data analytics firm Splunk has competed in a little-known type of race called Ride and Tie: Two partners alternate between riding a horse and running on long, MOREMichal Lev-Ram, writer - Feb 1, 2013 5:00 AM ET
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