Steve Ballmer calls Apple's Mac growth a "rounding error"
appleinsider.com
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If anything, Microsoft should play up two things. First, that they believe their products offer a superior value, choice, and flexibility when compared with Apple's as their "laptop hunters" commercials portray. That counts for a lot. Second, that Apple's health shows that competition is alive and well in the computing market which will drive all parties to produce the best products they can.
Saying that Apple's growth isn't real simply comes off as out of touch with reality. It makes it seem like you don't know the market well enough to see the obvious and, if that's true, how can you steer your company to success? Similarly, if Apple were to simply dismiss Microsoft's "laptop hunter" commercials as not connecting with people, they'd similarly be out of touch.
Both offerings have strengths and weaknesses. Pretending that isn't true might win you points with fanboys, but makes you seem out of touch to the 90% who aren't die-hards on either side and try to buy what's best for them.
The key is getting across the point that your product has continued value, not that someone else's product doesn't have value. Windows is powering more computers than ever today as the market expands. Windows provides a low-cost (compared to Apple) operating system that maintains a high level of compatibility that businesses demand. Similarly Apple should stress that they offer an elegant, integrated experience with greater interoperability than ever.
Fanning flame wars as an executive just seems immature.
Apple's Standard Oil model of business (fanatical control of every aspect of its products) has given it certain major engineering advantages but has limited its desktop share to that of a strong high-end niche - great for connoisseurs and for those on the cutting edge, less appealing to those who need to solve immediate business problems with cost-effective solutions.
It was a seismic shift ala first-time-ever mass computing that blind-sided IBM and caused it to lose hegemony in the enterprise market. That could happen today as well (though not from the Mac itself, which will remain a high-end niche product), and I would suspect that Microsoft is not nearly as sanguine in the back room about the threats to its dominance as it lets on. Agreed it is not wise to put on an arrogant face about it.
IBM senior management regarded the desktop PC manufactured by its own Boca Raton division as a toy.
What IBM missed (with all its big-systems hubris) was the competitive threat that arose when it gave Intel and Microsoft a vehicle by which to seize the future of mass computing when they got to supply the key inner parts for the PC.
"Wintel" was intended as a shorthand reference to the Intel/Microsoft teaming but it was obviously a poorly chosen term to refer to the early 1980s era, when Windows didn't even exist.
Microsoft OEM contracts and market power have nothing to do with this.
Apple cannot reproduce the same success of the PC in a similar fashion with the same kind of strategy, because skimming off the top of the value chain doesn't naturally scale, as most people aren't income-insensitive, and Apple's brand cachet depends on being classy, not cheap.
In reality, it's web apps that are the "inferior" thing that is killing desktop software, which in turn reduces platform stickiness and frees the high end of the market to move to Apple. That's where MS is worried, and why they invest so much in .NET, Silverlight, etc.
Yes. Getting market share means you've a product that lots of people want and you've figured out a way to get it to them.
Just because Microsoft does not fit in your narrow definition of innovation does not mean that they are not innovative.
The cool one is the one who innovates
Yes, but the cool one is not usually the most successful business. If anything, Apple's learned that over its history. For the longest time it innovated great cool things that Microsoft would copy and sell it better while after the innovation phase, Apple would crumble. Since the iPod things have been looking up but geez, Apple has a longtime to go before it can compare itself to Microsoft.
Talking about innovation, don't even get me going about Apple's treatment of developers versus Microsoft's. Hint: innovation is a lot more than building cool technology in your secret lab.
Microsoft obviously competes in the entire PC market but its fairly obvious that Apple is really only taking on the high end. This way both win, Apple owns the over $1000 market and Microsoft wins the overall share. Its just investor spin.
According to Google Finance, in the last available quarterly results for each company Microsoft had about $13B revenue with $3B net income, Apple had about $8.3B revenue with $1.3B net income. And Apple has been growing faster (Microsoft's income went down year over year last quarter, for the first time in their history I believe). So, yes, I think you can compare them. Microsoft is still bigger with more profits, but with Apple growing faster you can make a case it is the better stock to own.
One small clarification.The 'rounding error' he was talking about was the change in share. I know this since I was a few feet away doing manning a booth for my team :)
http://www.microsoft.com/msft/speech/FY09/BallmerFAM2009.msp... has the entire speech. Grep the page for the quote - it appears deep in and is just a couple of lines.
'Ballmer noted the large number of Apple machines in the crowd as he spoke, saying the Windows maker has a "low share" in the investor audience.
"I can see the Apple logos versus the PC logos," Ballmer told the crowd. "So we have more work to do, more work to do. Our share is lower in this audience than the average audience. But don't hide it. I've already counted them. I have been doing that since we started talking."'
Sorry to single you out with this reply, because there are a few posts suggesting Ballmer does not realize that there are places, professions, and industries where Macs are prominent. This quote shows that Ballmer is more than aware of this fact.
This has been going on for years, this isn't news. Who cares?
At this point the recession is a fairly known quantity and should be factored in to estimates - its not a very solid excuse any more.
Google and Apple topped estimates for the quarter I believe
Cool. That's exactly what I wanted to know.
Ballmer is the only problem in M$, the worst CEO ever, and I will be very happy the day he steps down.
I guess Ballmer is banging his head against a monitor showing a Win7 screensaver for missing that opportunity to double his wealth.