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

Posted:
in General Discussion edited January 2014
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.

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"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."
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Comments

  • Reply 1 of 273
    rot'napplerot'napple Posts: 1,839member
    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?!
  • Reply 2 of 273
    Lets go back to that line,

    Quote:

    "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!
  • Reply 3 of 273
    kreshkresh Posts: 379member
    If it is just a rounding error, why spend real money to advertise against Apple?
  • Reply 4 of 273
    chronsterchronster Posts: 1,894member
    We all know he's an idiot. Let the Ballmer flaming begin! LOL

    Quote:
    Originally Posted by kresh View Post


    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.
  • Reply 5 of 273
    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.
  • Reply 6 of 273
    quadra 610quadra 610 Posts: 6,743member
    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.
  • Reply 7 of 273
    john.bjohn.b Posts: 2,717member
    Quote:
    Originally Posted by kresh View Post


    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".
  • Reply 8 of 273
    thetoethetoe Posts: 84member
    Quote:

    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.)
  • Reply 9 of 273
    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.
  • Reply 10 of 273
    "not to expencive but not to cheap??
  • Reply 11 of 273
    macxpressmacxpress Posts: 4,789member
    Quote:
    Originally Posted by kresh View Post


    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...
  • Reply 12 of 273
    john.bjohn.b Posts: 2,717member
    Quote:
    Originally Posted by AppleInsider View Post


    "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.
  • Reply 13 of 273
    quadra 610quadra 610 Posts: 6,743member
    Quote:
    Originally Posted by TheToe View Post


    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.
  • Reply 14 of 273
    applezillaapplezilla Posts: 941member
    What a buffoon.
  • Reply 15 of 273
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by chronster View Post


    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.
  • Reply 16 of 273
    thetoethetoe Posts: 84member
    Quote:
    Originally Posted by Quadra 610 View Post


    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.)
  • Reply 17 of 273
    quadra 610quadra 610 Posts: 6,743member
    "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.
  • Reply 18 of 273
    tundraboytundraboy Posts: 1,611member
    Quote:
    Originally Posted by AppleZilla View Post


    What a buffoon.



    You guys quit dogging Ballmer. He is eminently qualified to be Microsoft CEO. He was Bill Gates' college buddy.
  • Reply 19 of 273
    phalanxphalanx Posts: 109member
    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.
  • Reply 20 of 273
    rameetirameeti Posts: 3member
    Quote:
    Originally Posted by macxpress View Post


    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.
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