Microsoft’s (NASDAQ:MSFT) Windows 7 will be better than Microsoft Vista. The world’s largest software company has learned from the mistakes it made with Vista which users found too complicated. But, Microsoft assumes that customers always want to upgrade to the latest version of its operating system. That does leave out the millions of people who never licensed Vista; people who like XP, the version of the operating system used by most consumers and businesses on their PCs before Vista arrived.

Microsoft is betting a huge amount of marketing and development expense on the assumption that Windows 7 will get an extraordinary reception among PC users.

Intel  (NYSE:INTC) continues to make more powerful chips. It has upgraded its line of semiconductors from dual core to quad core. Many businesses and consumers don’t need all the extra power. Tens of millions of people use their PCs to read e-mail and search the web. Processors that allow people to run a dozen video files at once are not really useful to the majority of PC and server owners.

Technology is now clearly so good in many industries that it has surpassed the needs of many customers. Smart phones do scores of functions that most owners do not want. Many of these consumers opt for a simpler and less expensive phone. An Apple (NASDAQ:AAPL) iPhone may carry a great deal of status with it, but for people who only want to make phone calls it is a luxury that they will not pay for.

Dow Chemical (NASDAQ:DOW) has a new piece of technology that it forecasts will have sales of $5 billion in 2015 and $10 billion in 2020. The $10 billion is only a little less than Dow’s quarterly sales today. The product that will drive all of this revenue is a rooftop shingle that converts sunlight into electricity. Reuters says that “The shingle will use thin-film cells of copper indium gallium diselenide, a photovoltaic material that typically is more efficient at turning sunlight into electricity than traditional polysilicon cells.” The shingle probably works well, but Dow should be more careful about what it has to say about future sales. Most shingles that are used today work well. Once they are hammered on a roof, they can last for decades without being replaced. They do not have to be linked to any other structure in the home. The cost of a single shingle is easy to calculate because it does not come with a set of instructions that says “batteries required” or “do not use this in temperatures above 75 degrees or below 30 degrees”

A solar shingle is a part of a complex and expensive system which involves rewiring the way that a home gets its electricity, stores it, and uses it over the course of a day. A shingle that converts sunlight into electrical energy requires engineering and storage that doubtlessly costs thousands of dollars and has to be installed by a specialist. The homeowner has to decide how long it will take him to get that investment back compared to the cost of simply getting electricity from the local utility. There is also the issue of what happens if twenty days per month are overcast. The solar shingle is not a shingle; it is a part of a complex and expensive system that most homeowners can neither understand nor evaluate financially.

Hybrid cars are supposed to get better gas mileage than cars run by normal internal combustion engines. The same holds true for new diesel cars. Cars with traditional engines still control the great majority of the auto market. The average consumer does not understand how a hybrid car works, why it is more expensive than a car with a regular engine, or how it will be fixed if it is broken. The price of a tank of gas is back down near $2 as well. No one should be surprised if 90% of the people who buy cars in America do not consider a hybrid or diesel at all. Most customers do not want new technology; they want a car that works and one that most modestly skilled mechanics can repair.

The solar shingle is a revolutionary idea and it could change the way people get energy to run their homes. But, Dow may find out that it sells almost none of the news shingles. They may break when it gets icy or blow off in a storm the way normal shingles which are not tied to a home’s electricity system do. Consumers, at least a great many of them, will think these solar shingles might pose some kind of fire or health hazard. They could be right.

Dow Chemical should avoid saying it will sell $10 billion of anything that the public has not seen, even if it is just chemicals

Douglas A. McIntyre

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