Ballmer sees Mac as a main competitor, iPhone as just buzz
As software giant Microsoft is warning of continued economic hardship after its first round of layoffs ever, the company's chief executive is eyeing competition from Apple, Linux, and Google on the desktop while downplaying the market strength of the iPhone and other opponents of its Windows Mobile operating system.
Microsoft chief Steve Ballmer spoke to analysts during a midyear update in New York, where he said he believes the economic downturn will continue into the second half of this year. He held up RCA as a model for Microsoft to follow.
Following the RCA Model?
Ballmer told participants that Microsoft, like RCA during the Great Depression, will look to spend money on research and development so it can dominate the market once the economy rebounds.
The software giant's co-founder didn't make any mention of RCA's eventual buyout at the hands of General Electric and subsequent sale of the electronics brand to the French, becoming part of the then state-run Thomson SA.
Windows 7, Office 14, Advertising, Windows Mobile
The Redmond, Wash.-based company is targeting a January 2010 release for Windows 7, which will arrive with a heavy blitz of advertising spending to promote both the new operating system and Office 14. Microsoft announced a public beta of Windows 7 last month. It also intends to open its own retail stores in an attempt to better control its public image.
Meanwhile, Ballmer addressed its competitors on the OS scene, both acknowledging Apple's one percent gain in market share over the last year and the rising open-source alternatives.
"We're very focused on both Apple as a competitor and Linux as a competitor," Ballmer said, according to CNET. "I think the dynamics with Linux is changing somewhat. I assume we'll see Android-based, Linux-based laptops, in addition to phones, and we'll see Google more and more as a competitor in the desktop operating system business than we ever have before... the seams between what is a phone operating system and a PC operating system will change, so we have ramped our investment in the client operating system."
Ballmer down on integrated smartphones
Ballmer also said he was not impressed with the integrated model of Apple's iPhone, which has captured 51% of mobile web traffic, or Research In Motion's BlackBerry platform, which dominates the corporate messaging market in the US.
"The truth of the matter is all the consumer market mojo is with Apple and to a lesser extent BlackBerry," he said. "And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android." Ballmer's company made similar comments as it worked to promote PlaysForSure as an industry coalition in competition with Apple's iPod.
Last week Microsoft previewed Windows Mobile 6.5, which won't ship until the end of the year. The company plans to launch Windows Mobile 7, which was originally intended to have already shipped by now, sometime next year.
Despite dismissing the iPhone as hype, Ballmer said he sees growing competition in mobile software sales, such as Apple's iPhone App Store. He also has noticed the growth of ecosystems with software, hardware, and services bundled together. Both the Cupertino-based company's iPhone and RIM's BlackBerry fit that description, while Microsoft itself does not manufacture handsets. To date, it has favored partnerships with existing device makers instead.
Windows 7 on Netbooks
Ballmer indicated plans are underway to make Windows 7 work well on the small laptops known as netbooks, which would correct Vista's requirement for more robust system resources than the more modestly-powered netbooks can provide. Microsoft doesn't make as much money from sales of Windows XP as it could charge for Vista, were Vista capable of running on the low cost, simpler devices.
Microsoft will offer a Windows 7 Starter Edition optimized for netbooks while at the same time making efforts to convince netbook customers to pay more for full-featured versions of Windows 7. How the company intends to go about that goal was not elaborated on. The Starter Edition is defined by Microsoft as running just three apps at a time and lacking the Aero Glass user interface that defines both Vista and Windows 7.
Grappling with Google
Finally, Microsoft plans to keep on in its fight against Google for web search and advertising market revenues, even though efforts to bolster Windows Live Search and a Yahoo takeover bid both failed.
"You give up, you can't get back in the game," Ballmer explained. "I don't want to wind up being known as the Jerry Yang of this market," referring to the Yahoo co-founder who was ousted from his CEO position just months after rejecting Microsoft's $47.5 billion takeover offer.
The meeting comes after Microsoft announced five thousand job cuts late last month and was embarrassed in recent days by an accounting glitch that short-changed some fired employees of their full severance pay and inadvertently overpaid others.
The Redmond-based software maker then suffered a PR nightmare when letters asking that the extra funds be returned were publicized, pressing the company to reverse its stance and issue an apology that let laid-off workers keep the extra pay.
Microsoft chief Steve Ballmer spoke to analysts during a midyear update in New York, where he said he believes the economic downturn will continue into the second half of this year. He held up RCA as a model for Microsoft to follow.
Following the RCA Model?
Ballmer told participants that Microsoft, like RCA during the Great Depression, will look to spend money on research and development so it can dominate the market once the economy rebounds.
The software giant's co-founder didn't make any mention of RCA's eventual buyout at the hands of General Electric and subsequent sale of the electronics brand to the French, becoming part of the then state-run Thomson SA.
Windows 7, Office 14, Advertising, Windows Mobile
The Redmond, Wash.-based company is targeting a January 2010 release for Windows 7, which will arrive with a heavy blitz of advertising spending to promote both the new operating system and Office 14. Microsoft announced a public beta of Windows 7 last month. It also intends to open its own retail stores in an attempt to better control its public image.
Meanwhile, Ballmer addressed its competitors on the OS scene, both acknowledging Apple's one percent gain in market share over the last year and the rising open-source alternatives.
"We're very focused on both Apple as a competitor and Linux as a competitor," Ballmer said, according to CNET. "I think the dynamics with Linux is changing somewhat. I assume we'll see Android-based, Linux-based laptops, in addition to phones, and we'll see Google more and more as a competitor in the desktop operating system business than we ever have before... the seams between what is a phone operating system and a PC operating system will change, so we have ramped our investment in the client operating system."
Ballmer down on integrated smartphones
Ballmer also said he was not impressed with the integrated model of Apple's iPhone, which has captured 51% of mobile web traffic, or Research In Motion's BlackBerry platform, which dominates the corporate messaging market in the US.
"The truth of the matter is all the consumer market mojo is with Apple and to a lesser extent BlackBerry," he said. "And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android." Ballmer's company made similar comments as it worked to promote PlaysForSure as an industry coalition in competition with Apple's iPod.
Last week Microsoft previewed Windows Mobile 6.5, which won't ship until the end of the year. The company plans to launch Windows Mobile 7, which was originally intended to have already shipped by now, sometime next year.
Despite dismissing the iPhone as hype, Ballmer said he sees growing competition in mobile software sales, such as Apple's iPhone App Store. He also has noticed the growth of ecosystems with software, hardware, and services bundled together. Both the Cupertino-based company's iPhone and RIM's BlackBerry fit that description, while Microsoft itself does not manufacture handsets. To date, it has favored partnerships with existing device makers instead.
Windows 7 on Netbooks
Ballmer indicated plans are underway to make Windows 7 work well on the small laptops known as netbooks, which would correct Vista's requirement for more robust system resources than the more modestly-powered netbooks can provide. Microsoft doesn't make as much money from sales of Windows XP as it could charge for Vista, were Vista capable of running on the low cost, simpler devices.
Microsoft will offer a Windows 7 Starter Edition optimized for netbooks while at the same time making efforts to convince netbook customers to pay more for full-featured versions of Windows 7. How the company intends to go about that goal was not elaborated on. The Starter Edition is defined by Microsoft as running just three apps at a time and lacking the Aero Glass user interface that defines both Vista and Windows 7.
Grappling with Google
Finally, Microsoft plans to keep on in its fight against Google for web search and advertising market revenues, even though efforts to bolster Windows Live Search and a Yahoo takeover bid both failed.
"You give up, you can't get back in the game," Ballmer explained. "I don't want to wind up being known as the Jerry Yang of this market," referring to the Yahoo co-founder who was ousted from his CEO position just months after rejecting Microsoft's $47.5 billion takeover offer.
The meeting comes after Microsoft announced five thousand job cuts late last month and was embarrassed in recent days by an accounting glitch that short-changed some fired employees of their full severance pay and inadvertently overpaid others.
The Redmond-based software maker then suffered a PR nightmare when letters asking that the extra funds be returned were publicized, pressing the company to reverse its stance and issue an apology that let laid-off workers keep the extra pay.
Comments
What are his qualifications and does the MS team on board with this guy?
DEAD!
Crazy Ballmer talks crazy. Time to sell your MSFT stock.
If Ballmer isn't careful he'll be replaced. The Microsoft board of directors and stock holders won't stand a few more quarters of losses.
Interesting how he doesn't see the iPhone as a competitor and does with Android. Android isn't in as many countries as the iPhone. Apple has just begun in the phone market and really hasn't shown the world it's next update which will be major.
Ballmer told participants that Microsoft, like RCA during the Great Depression, will look to spend money on research and development so it can dominate the market once the economy rebounds.
Like they don't already own the desktop / notebook markets?
They have technology and they have smart people, the problem is that they have been misdirecting or squandering it.
Ballmer down on integrated smartphones
Ballmer also said he was not impressed with the integrated model of Apple's iPhone, which has captured 51% of mobile web traffic, or Research In Motion's BlackBerry platform, which dominates the corporate messaging market in the US.
"The truth of the matter is all the consumer market mojo is with Apple and to a lesser extent BlackBerry," he said. "And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android." Ballmer's company made similar comments as it worked to promote PlaysForSure as an industry coalition in competition with Apple's iPod.
Yeah, Windows Mobile and Android have yet to make a marked dent. How Microsoft wins is often by convincing other companies to give up - and that's not happening here, and the Microsoft-spread FUD isn't working in these markets.
Grappling with Google
Finally, Microsoft plans to keep on in its fight against Google for web search and advertising market revenues, even though efforts to bolster Windows Live Search and a Yahoo takeover bid both failed.
How about a plan? I realize that most people failed to learn this, but throwing money at a problem is not a good way to spend money or to solve a problem. There usually needs to be a strategy, and there needs to be a disruptive innovation to topple entrenched rivals and take their place.
I guess in Ballmer's World, Windows still holds over 98% of the "real" desktop market.
All I hear is hot air. Someone throw an egg at him.
Hey dude, get with it we don't throw eggs any more were into shoes...... throw your size 10 at um!
Much as I do not particularly care for the company's products, I genuinely do want them to do (reasonably) well because of all the tens of billions in good works that MSFT's equity value is making possible via the Gates Foundation.
At the rate this guy is going, he is simply going to vaporize that value. That would be truly sad.
I wonder if B&M Gates are paying attention, and should take some serious action soon.
Your envy of Apple is unparaled.
Par
Is Steve Ballmer a good manager or something and we just don't see it? I really question how this guy got to sit in the seat to drive MS.
It looks like nepotism, more or less. He's been with the company from very early on.
Should we be surprised the device manufacturers don't have momentum with Apple's mobile OS?
He should be a politician. Say what you want while the cameras are rolling, don't let facts bog you down, throw enough BS and some will stick.
Next he'll be saying he sold tons of WinMo 6.5 while under sniper fire.
And maybe 'great' is too strong an adjective.
Does anyone think we would see a lean and powerful OS like Snow Leopard, DRM free music, or a mobile device capable of the full internet if it weren't for someone like Steve Jobs? The contrast between a real technology leader like Jobs and Ballmer is startling. The best thing Ballmer could do for Microsoft is fire himself.
I don't understand how they can say OS X is a competitor (i.e. threat) when it has such a small share of the OS market and then on the flip side say the iPhone isn't a real competitor even though Apple has a much larger slice of that market and is potentially an even bigger threat in the near future!?
With the advent of Android and the potential loss of Palm as a licensee, they are obviously worried about the release schedules of Windows Mobile and are trying to spread F.U.D. in the hopes of saving what little Windows Mobile licensees they have left in their pockets.
So on one hand we'll have RIM, Apple and Palm creating their own complete devices that don't necessarily eat directly into Microsoft's business, but do affect the sales numbers of Windows Mobile devices. And on the other hand you'll have Android, LiMo, and Symbian all as open mobile operating systems directly taking away business from Microsoft by cutting into Microsoft's slice of the licensee pie. I'd say unless Microsoft does something drastic soon, they'll be out of the mobile business shortly.