Steve Ballmer calls Apple's Mac growth a "rounding error"

[AppleInsider]

Speaking to a group of market analysts this week, Microsoft Chief Executive Steve Ballmer repeatedly mentioned Apple, including a suggestion that a growing rate of Mac adoption is statistically insignificant.

"Share versus Apple, you know, we think we may have ticked up a little tick," Ballmer said at the 2009 Financial Analyst Meeting, "but when you get right down to it, it's a rounding error. Apple's share change, plus or minus from ours, they took a little share a couple quarters, we took share back a couple quarters."

The Microsoft executive said he expects Windows to continue to trade market share with Mac OS X back and forth, though he added he feels taking customers from Apple is a limited resource.

"Apple's share globally cost us nothing," he said. "Now, hopefully, we will take share back from Apple, but you know, Apple still only sells about 10 million PCs, so it is a limited opportunity."

The 40-minute speech covered a variety of Apple-related topics, including product pricing, advertising, and the number of Macs in the audience. 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."

The CEO also, in a roundabout way, acknowledged that Apple is known for making higher-quality hardware than Microsoft's PC partners. But Ballmer said he expects consumers to be surprised at some of the new offerings available this fall alongside the debut of its new operating system, Windows 7.

"At least when Apple attacks us, the primary attack that comes from Apple is, 'Hey, at the end of the day, we have the coolest hardware,'" he said. "When you see the hardware, the PC designs that will come out this Christmas with Windows 7, I think that conventional wisdom can begin to really change. There is some really amazing, amazing work. So it is possible to get great hardware innovation, even when hardware and software comes from separate companies."

Microsoft's top official said Windows falls in between OS X and Linux into the market sweet spot -- not too expensive, not too cheap. Just weeks ago, Ballmer laughed off the threat of Google's open source Chrome OS. This week he said Microsoft's goal is to dominate the market, rather than carve out a niche.

"We do not, say, like Apple, believe in low volume, very high prices, very -- Apple is a great company, does a fine job. But their model says high margin, high quality, high price," he said. "That's kind of how they come to market. We say we want big market share. But with big market share, you take a lower price."

Recently Microsoft changed one of its advertisements attacking the high cost of Apple products after legal threats. The Microsoft executive spoke about those commercials, but did not talk about the recent controversy. Instead, he said the "Laptop Hunters" ads have changed some public perception about the Microsoft brand as it relates to Apple.

"And are the ads working?" he asked rhetorically. "In an independent survey, we asked 18- to 24-year-olds—or they were asked, "Who offers the best value, Apple or Microsoft?" You can kind of see Apple was comfortably ahead despite the fact they — well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far."

[ View this article at AppleInsider.com ]

[Rot'nApple]

Ballmer IS a rounding error!

For someone who critiques their competitor's product and then reproduces a shoddy version of it for their own resale, Ballmer has a hell of a nerve!

"...you know, we think we may have ticked up a little tick," Ballmer said"

Too bad your stock hasn't ticked up...

"Ballmer laughed off the threat of Google's open source Chrome OS."

Just like he laughed at the iPhone... who's laughing now?!

[crisss1205]

Lets go back to that line,

"Windows falls in between OS X and Linux into the market sweet spot -- not too expensive, not too cheap."

What? Not to expensive? WTF Windows is the most expensive OS!
At $299 for a basic retail version and $399 for a premium, thats not expensive?

FYI: Apple has sold 10 million "PC's" and how many did Microsoft sell? Um, 0! All they do is sell software for PC, not hardware!

[kresh]

If it is just a rounding error, why spend real money to advertise against Apple?

[chronster]

We all know he's an idiot. Let the Ballmer flaming begin! LOL

Originally Posted by kresh

If it is just a rounding error, why spend real money to advertise against Apple?

The only rounding error I see is on the top of Ballmer's skull.

[Wil Maneker]

Actually, beyond the "rounding error" statement, most of what Ballmer has to say is on point and complimentary of Apple's strategy.

I'm surprised.

[Quadra 610]

Ballmer and crew are ready to make excuses at every turn. He has plenty to answer for, anyway.

It's not about overall share.

It's all about locking MS out of the Premium end of the market and relegating them to bargin-bin status.

A company with a fraction of MS/ R&D budget embarrasses them on a regular basis. Look at what MS has rolled out since 2001. Now look at what Apple has rolled out since then. MS can barely get a lousy OS out the door, never mind products that reshape entire industries overnight.

"We do not, say, like Apple, believe in low volume, very high prices, very -- Apple is a great company, does a fine job. But their model says high margin, high quality, high price," he said. "That's kind of how they come to market. We say we want big market share. But with big market share, you take a lower price."

"And are the ads working?" he asked rhetorically. "In an independent survey, we asked 18- to 24-year-olds—or they were asked, "Who offers the best value, Apple or Microsoft?" You can kind of see Apple was comfortably ahead despite the fact they — well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far."

Is Ballmer retarded? Most of that is incredibly complimentary to Apple. Wow.

Apparently, most people in the room were sporting Macs.

[John.B]

Originally Posted by kresh

If it is just a rounding error, why spend real money to advertise against Apple?

Exactly, what kills me is that the analysts don't question these inconsistencies. Of course, most analysts stopped fulfilling their duties a long time ago, instead it seems most are inclined just "do their jobs".

[TheToe]

But their model says high margin, high quality, high price," he said

So is he saying that Micrtosoft's model is "low margin, low quality, low price?"

(Answer: yes.)

[macanator]

Ballmer will be the sole reason Microsoft is driven into the ground. Trying to hid the fact that Apple is doing better than they are.

[techfreak85]

"not to expencive but not to cheap??

[macxpress]

Originally Posted by kresh

If it is just a rounding error, why spend real money to advertise against Apple?

Excellent point!

If Apple costs Microsoft nothing, then why is Microsoft spending millions and millions of dollars to advertise against what Apple is doing? There is some flawed logic there...

[John.B]

Originally Posted by AppleInsider

"And are the ads working?" he asked rhetorically. "In an independent survey, we asked 18- to 24-year-olds—or they were asked, "Who offers the best value, Apple or Microsoft?" You can kind of see Apple was comfortably ahead despite the fact they — well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far."

And Ballmer wouldn't be the first executive to mistake value for price.

[Quadra 610]

Originally Posted by TheToe

So is he saying that Micrtosoft's model is "low margin, low quality, low price?"

(Answer: yes.)

LOL, don't even bother trying to understand. The guy's out to lunch. It's what happens when you put the sales guy in charge.

[AppleZilla]

What a buffoon.

[teckstud]

Originally Posted by chronster

We all know he's an idiot. Let the Ballmer flaming begin! LOL

The only rounding error I see is on the top of Ballmer's skull.

More like what's inside it.

[TheToe]

Originally Posted by Quadra 610

Apparently, most people in the room were sporting Macs.

Every conference I go to, most people in the room are sporting Macs.

It makes me wonder how much the numbers bear out the reality. Last conference I went to, the most popular computer was the aluminum MacBook... and it was only a couple months after their introduction. (This was a conference about government, btw, not anything Mac-related.)

[Quadra 610]

"And are the ads working?" he asked rhetorically. "In an independent survey, we asked 18- to 24-year-olds—or they were asked, "Who offers the best value, Apple or Microsoft?" You can kind of see Apple was comfortably ahead despite the fact they — well, despite whatever the facts are. Our ads started in April of '09. You can see kind of what the perception changes have been so far."

Perception changes? Like what, Apple selling more Macs in a recession than before? Record quarters? Dominating mindshare for years now?

Yeah, the "perception change" is that people with money to spend don't want your shitty software running on shitty PCs.

[tundraboy]

Originally Posted by AppleZilla

What a buffoon.

You guys quit dogging Ballmer. He is eminently qualified to be Microsoft CEO. He was Bill Gates' college buddy.

[phalanx]

They advertise against Apple because there is no one else to advertise against. That is why the they bailed them out financially years ago. Apple makes Windows PC more appealing. People like to get a bargin. That is why the sell so many Chevy's.

[RAmeeti]

Originally Posted by macxpress

Excellent point!

If Apple costs Microsoft nothing, then why is Microsoft spending millions and millions of dollars to advertise against what Apple is doing? There is some flawed logic there...

Whoa. The reality is that AFTER having spent their advertising dollars, Apple is then costing them nothing. [using your words]

It should not be expected that MS's current position of Apple's being 'insignificant' was accomplished out of thin air. It has been accomplished via Ms's marketing and advertising.

I am not wanting to be sounding like I am on either side but you've got to recognize that the advertising is supposed to have accomplished something.

[PaulMJohnson]

Originally Posted by kresh

If it is just a rounding error, why spend real money to advertise against Apple?

They only really spend in the US, where the share gains by Apple are less of a rounding error - they are making gains in the US, so it makes sense that they look to defend.

Ballmer is right globally though, Apple's share gains overall are insignificant. Whether we Apple fans like it or not, Mac sales are tiny when compared with the overall Personal Computer market.

I can't understand why so many people would chose Windows over Mac, but there we go.

[bfulda]

Steve Ballmer will end up sucking the life blood out of M$. He is the pinnacle idiot. I know of no other person with such huge blinders on. But, alas, I shouldn't complain to loudly. It is actually fun to watch him show his ass at every turn, the entertainment value is just priceless. Not to mention watching M$ trying to copy everything about Apple time and time again only to, once again, watch the market leader go down in flames.

[Quadra 610]

Originally Posted by phalanx

They advertise against Apple because there is no one else to advertise against. That is why the they bailed them out financially years ago. Apple makes Windows PC more appealing. People like to get a bargin. That is why the sell so many Chevy's.

??

MS didn't bail Apple out. Apple had MS over a legal barrel regarding patent violations - a battle which MS would have lost. Apple at the time, in a roundabout way, blackmailed MS into a deal. And the rest is history. Apple caught MS with its pants down, hunched over the photocopier, and took advantage of the situation.

The rest of your post makes no sense. I'm not sure how "Apple makes Windows PC more appealing." Apparently, it doesn't.

[dr_lha]

Originally Posted by phalanx

People like to get a bargin. That is why the sell so many Chevy's.

Is that why GM went bankrupt and needed to be bailed out by the US Gov then?

[Abster2core]

As previously submitted by another poster on MD† re Ballmers statement,

"When you see the hardware, the PC designs that will come out this Christmas with Windows 7, I think that conventional wisdom can begin to really change. There is some really amazing, amazing work. So it is possible to get great hardware innovation, even when hardware and software comes from separate companies."

"Yes (Steve,) there is a Santa Claus. HE exists as certainly as love and generosity and devotion exist, and you know that they abound and give to your life its highest beauty and joy."*

But unfortunately for you, HE works for Apple.

And HE, has been a very good boy.

*http://www.newseum.org/yesvirginia/ (FP Church. Yes, Virginia, there is a Santa Claus. New York Sun Editorial; Sept 21, 1897.)

† http://macdailynews.com/index.php/we...omments/21955/

[AppleZilla]

Originally Posted by tundraboy

You guys quit dogging Ballmer. He is eminently qualified to be Microsoft CEO. He was Bill Gates' college buddy.

I was in same cell with Bill Gates in Albuquerque, New Mexico back in 1977. Can I be CEO next?

[huntercr]

Originally Posted by Quadra 610

??

MS didn't bail Apple out. Apple had MS over a legal barrel regarding patent violations - a battle which MS would have lost. Apple at the time, in a roundabout way, blackmailed MS into a deal. And the rest is history. Apple caught MS with its pants down, hunched over the photocopier, and took advantage of the situation.
[...]

Not disagreeing, but wanted to point out that it has always been in MS's best interest to keep Apple alive when they were faltering ( and lets be honest... Apple in the 90's was barely hanging on at times). Having Apple around bolsters Microsoft's defense that they were not a monopoly. They would ( correctly ) point out that people are free to choose Mac OS as a platform. What do you think the *real* reason is that there is Microsoft Office for Mac?

In truth, Ballmer, though he is an idiot, is right that Microsoft's core business will not be touched by Apple... YET. Apple is handing them their own arses in all other segments of business though. That will hurt MS in the long run. Apple has sweetly positioned itself as the "great enabler". Microsoft once was today's "Apple" when they were fighting against IBM. Microsoft has become "IBM" in public perception. MS continues to talk and talk and talk about innovation and features. None of it ever makes it to market.

[kim kap sol]

I think Ballmer was planted to destroy Microsoft.

[eksodos]

Originally Posted by crisss1205

Lets go back to that line,

What? Not to expensive? WTF Windows is the most expensive OS!
At $299 for a basic retail version and $399 for a premium, thats not expensive?

FYI: Apple has sold 10 million "PC's" and how many did Microsoft sell? Um, 0! All they do is sell software for PC, not hardware!

Microsoft makes its money from volume OEM sales and corporate. They get a fraction of the retail price with the volume discounts.

They only sell a tiny, tiny, tiny amount of Microsoft Windows at retail. That is probably going to change a bit with Windows 7 given how fantastic it runs on older hardware. For the first time in a long time, you can actually improve the performance of your computer by updating to the latest version of Microsoft Windows.

[Mastersonics]

Is this guy on crack or plain delusional?

This A Hole is destructive and now that he's at the helm of MS
he think he's GOD and can do whatever the hell he wants.

At least Gates was more elegant and smarter.

oh well....

[LordNige]

Ballmer laughs everything off and most things come to bite him in the backside. M$ has been a little too smug as of late, its actually pretty annoying considering the company isn't doing too well lately. Ballmers appointment as CEO is almost like giving the village idiot the job as mayor

[Quadra 610]

Originally Posted by huntercr

Not disagreeing, but wanted to point out that it has always been in MS's best interest to keep Apple alive when they were faltering ( and lets be honest... Apple in the 90's was barely hanging on at times). Having Apple around bolsters Microsoft's defense that they were not a monopoly. They would ( correctly ) point out that people are free to choose Mac OS as a platform. What do you think the *real* reason is that there is Microsoft Office for Mac?

In truth, Ballmer, though he is an idiot, is right that Microsoft's core business will not be touched by Apple... YET. Apple is handing them their own arses in all other segments of business though. That will hurt MS in the long run. Apple has sweetly positioned itself as the "great enabler". Microsoft once was today's "Apple" when they were fighting against IBM. Microsoft has become "IBM" in public perception. MS continues to talk and talk and talk about innovation and features. None of it ever makes it to market.

A reasonable view. It certainly is advantageous in certain respects to have MS around. And frankly, Apple seems to look their best in a strong #2 position overall.

[FloorJack]

He probably has a point there.

[VinitaBoy]

@phalanx,

"That is why the they bailed them out financially years ago."

Sorry, "phal," but Microsoft did no such thing. When little Billy G's company sent $150 million to Apple "years ago," it was to keep himself and his company out of jail! Microsoft (via one of its supposed "subcontractors) was caught red-handed stealing the code from QuickTime to make its own media support system. Yes, STEALING THE CODE. Gotcha!

The settlement of this matter, accomplished out of court, was the transfer of funds you allude to, above. Believe me, there is no love lost between Microsoft and ANY of its present or former competitors: not Netscape, not Word Perfect, not anybody.

Do NOT delude your self into believing that Microsoft bailed out Apple. Didn't happen. They bailed THEMSELVES out of just one more in a long list of ethical (not to say CRIMINAL) activities here and around the world.

[bmforbes]

Originally Posted by crisss1205

Lets go back to that line,

What? Not to expensive? WTF Windows is the most expensive OS!
At $299 for a basic retail version and $399 for a premium, thats not expensive?

FYI: Apple has sold 10 million "PC's" and how many did Microsoft sell? Um, 0! All they do is sell software for PC, not hardware!

I never thought of it that way... it explains why MSFT is focusing on the cost of PCs instead of the cost of the OS in their advertisements. They do not sell PCs. This is a dodge to make you think Mac is more expensive. I wonder how people will feel about MSFT when they try to upgrade their existing system to Windows 7! Apparently the best way to upgrade is to purchase a new PC... (see Walt Mossberg's article on the upgrade).

Ballmer highlights MSFTs weakness by trying to diminish the competition's strength at the same time they attempt to copy it.

[macxpress]

Originally Posted by RAmeeti

Whoa. The reality is that AFTER having spent their advertising dollars, Apple is then costing them nothing. [using your words]

It should not be expected that MS's current position of Apple's being 'insignificant' was accomplished out of thin air. It has been accomplished via Ms's marketing and advertising.

I am not wanting to be sounding like I am on either side but you've got to recognize that the advertising is supposed to have accomplished something.

You obviously didn't get what I said.....

[wizard69]

Ballmer was focusing on the hardware but to be honest my Mac Book Pro and even my iPhone don't stand out on quality. Let's face it iPhone is a thin brick and the MBP a fold open box.

The key to both products is the OS driving each unit. It is brilliant that Apple has taken UNIX so far. In both cases OS and APIs striving for high quality.

In a way though he is focused on an issue the Mac community needs to take a look at. That is the obsession with market share relative to Microsoft. What Apple needs is healthy and controlled growth in shipments that make the company stronger. What is happening anyone quarter against Microsoft isn't relavant. With sustained growth Microsoft will eventually loose but Apple can't loose sight of quality.

In a way Ballmer has a point even though he completely misses on why Microsoft is having so many problems. Let's face it there is hardware out there that equals or exceeeds Apples notebooks in physical quality but nothing comes close with respect to the operating system or customer service.


Dave

[rnp1]

Originally Posted by tundraboy

You guys quit dogging Ballmer. He is eminently qualified to be Microsoft CEO. He was Bill Gates' college buddy.

A "ROUNDING ERROR"
---Well that pretty much describes Ball-mur doesn't it!---

(Ball-mur was a poker and drinking buddy of Gates-someone he could laugh at and who followed him around worshipping his code writing skills. But they both bowed before the 'eminent,' porcelain throne on the weekends!)

[Mastersonics]

Originally Posted by bfulda

Steve Ballmer will end up sucking the life blood out of M$. He is the pinnacle idiot. I know of no other person with such huge blinders on. But, alas, I shouldn't complain to loudly. It is actually fun to watch him show his ass at every turn, the entertainment value is just priceless. Not to mention watching M$ trying to copy everything about Apple time and time again only to, once again, watch the market leader go down in flames.

I couldn't agree more,

C