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TMO Reports - Gates Doubts iPod a Microsoft Employee Favorite; "iPod's a Great Success"

by , 7:10 PM EST, February 16th, 2005

Microsoft Corp. founder and chairman Bill Gates said Wednesday he doubted claims that 80% of his employees are iPod owners. Acknowledging the iPod has been a "great success," he said consumers want more choice than what Apple can offer and Microsoft will gain market share in digital media devices in 2005.

In an interview with ABC News anchor Peter Jennings, Mr. Gates said, "I doubt that's the case" when asked if a recent story in Wired news is correct when it quoted an anonymous Microsoft employee as saying about 80% of the employees at Microsoft's Redmond, Wash. campus own and use an iPod at work.

"Certainly, the iPod's a great success," Mr. Gates said, praising Apple CEO Steve Jobs for having done "a lot of amazing things in our business."

When asked if he owns an iPod, Mr. Gates said, "No, I'm not an iPod user. I use the Creative Zen, which is a fantastic product."

On the subject of the iPod's success, Mr. Gates acknowledged Apple has done a "great job" in marketing and selling the iPod, but refused to acknowledged that Apple had beaten out Microsoft for dominance in music players. Mr. Gates vowed that customer choice will win out in the end.

"It's their (player), only their one music store, only their device," he said of Apple. "What we're doing is providing choices. So it's like the Apple computer versus the PC. With the PC you can buy from many companies so you get cheaper prices, you get more variety and here with music devices we're coming in with the same. But they're a strong leader in the space and I think as we gain share, people will be surprised."

Other issues Mr. Gates commented on included:

  • Speech recognition and integration of the PC and the telephone will become the next big breakthroughs in technology. "I think we will surprise people a bit on how well we will do on our speech recognition," he said. "We have made a lot more progress this year on that."

  • Google is the leader is search technology, but Microsoft is narrowing the gap. "We're sort of the David vs. Goliath in that particular battle," he commented. "I think we're actually one of the few companies that can say with credibility that we'll give Google some competition."

  • Microsoft is making great strides in electronic tablets: "They'll have just a tablet device that they can call up the material on. That's been a dream for a long time, we're making progress there. So review of the software projects and encouraging them in terms of what they are doing well and telling them who else they need to work with."

  • Observer Comments

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    View Name:Guest
    Subject:
    View Name:Guest
    Subject: WRONG!
    View Name:Guest
    Subject: Um... Right, not wrong.
    View Name:Guest
    Subject: Well said
    Close Name:Mace Posts: 9314 Joined: 07 Aug 2003
    Subject:

    Teens like cool.
    Baby boomers want it just works.
    In-between welcome both.

    iPod fulfills the needs of all of the above.

    View Name:Guest
    Subject: Yeah OK
    View Name:Guest
    Subject: iPod Marketshare
    View Name:Guest
    Subject:
    View Name:Guest
    Subject: Re: WRONG!
    View Name:Guest
    Subject: Yep
    Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
    Subject: Re: WRONG!

    Quote
    Anonymous wrote:
    Hey, WRONG! Do you understand how sentences are constructed? Guess not.


    Who are you talking to? Peter Jennings?

    View Name:Guest
    Subject: Weird numbers...
    View Name:Guest
    Subject: Speaking in tongues
    Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
    Subject: Re: Weird numbers...

    Quote
    Anonymous wrote:
    Not sure where you are getting your numbers from. Apparently only from Steve-o and Apple. In reality, the iPod holds less than 3% marketshare in the music player market, with Creative holding nearly 45%, being the single largest producer. As for the online music side, Napster now controls nearly 90% of the online music, both purchase and subscription services.

    Thanks to this dominance, MS (thanks to the use of their DRM) will more than likely drive Apple out of the music business within the year. This also means that the main support for keeping Apple up and running will be gone. So, kiss you pitiful excuse of a computer and OS goodbye.


    Tsk tsk. That's just lazy. At least RC has the work ethics to link to misleading articles to back up his posts. This is just...it's just not entertaining if you don't put in the effort, you know? It's like that one guy at the party that tells the joke wrong so the punchline doesn't make any sense. Spend some more time on it next time.

    View Name:Guest
    Subject:
    View Name:Guest
    Subject:
    View Name:Guest
    Subject: Where are you getting your numbers from????
    View Name:Guest
    Subject: edited?
    View Name:Guest
    Subject:
    Close Name:Smith Posts: 13 Joined: 16 Feb 2005
    Subject: TMO should fix their cookies so I can stop posting as Guest

    MacObserver doesn't sound too happy about their thumb-exhausting player.

    quote:
    "Consumers want more choice than what Apple can offer and Microsoft will gain market share in digital media devices in 2005"

    View Name:Guest
    Subject:
    View Name:Guest
    Subject: Re: Weird numbers...
    View Name:Guest
    Subject: Re: Weird numbers...
    View Name:Guest
    Subject: Re: Weird numbers...
    Close Name:B-sabre Posts: 70 Joined: 18 Jan 2005
    Subject: iPod usage at Redmond

    In the original Wired article, the MS employee used as a source estimated that 80% of the employees had an MP3 player of some kind, and that 80% of them were iPods. Which translated into 64% of the 25,000 employees, or about 16,000.

    Now, is that the result of a scientific survey? No. In fact, if the poll that indicates that 11% of Americans own some MP3 player is at all accurate, it really makes the numbers from Redmond look fishy. I would expect that based on age and demographics that they would have a higher rate than average, but 7 times average? Dunthinkso. But based on sales, I would expect a majority of them to be iPods.

    But it is interesting as anectdotal evidence of the popularity of the iPod vs its competitors, and it would be interesting to find out if its true that the MS management sent out email saying "Stop buyin' them there dang iPods!"

    I wish Peter Jennings had asked him that....

    View Name:Guest
    Subject: Billy Boy
    View Name:Guest
    Subject: Weird numbers...part deux.
    View Name:Guest
    Subject: Tech Toys at a Tech Company vs. National Demographics
    View Name:Guest
    Subject: Every Damn Year
    View Name:Guest
    Subject: How Much?
    Close Name:B-sabre Posts: 70 Joined: 18 Jan 2005
    Subject:

    Quote
    Guest wrote:
    Quote
    B-sabre wrote:
    Now, is that the result of a scientific survey? No. In fact, if the poll that indicates that 11% of Americans own some MP3 player is at all accurate, it really makes the numbers from Redmond look fishy. I would expect that based on age and demographics that they would have a higher rate than average, but 7 times average? Dunthinkso. But based on sales, I would expect a majority of them to be iPods.


    You've aparently not been on the NYC Subways. I'd say at least 1 in 6 people have a flash or hard disk based music player of some kind, be it iPod, Zen, Archos, or in my case, PDA. The majority are yes, iPods. However, in a technology company, the demographics are completely different. It's like comparing coffee intake between national and seattle. It just doesn't work.


    That '1 in 6' number is about 15%, or not that high off the national average. And of course, since lowest penetration will be in the elderly and presumably retired, you're not seeing as many of them on the subway as you do people who are going out to work, shop, play, etc.

    As for the source's 80% number, I still think that sounds really high - even at a company like Microsoft, not everybody is going to be a tech-head or gadget freak or have that much disposable income. What about the budgeting/financial people, marketing types, etc? Just because they are working at a tech firm does not automatically make them tech-heads or even computer literate.

    Now, saying that, do I see extensive use of MP3 players by engineering/software types at a software company? yes, but engineers/software people are almost by definition gadgeteers, so I would expect a higher percentage than average having them. And at Microsoft, there should be a higher than normal percentage of engineer/software types than at, say, an insurance company.

    But 80% ownership of an MP3 player says that just about everybody except the janitorial and cafeteria staff have one, and I don't really buy that. Even at Redmond.

    Do I believe that a larger than average number of MS employees have an MP3 player, compared to the national average? Yes, based on the age, education and career demographics that is not much of a leap. Are most of them iPods? No reason to disbelieve it, based on sales, but we have no direct evidence. Do I, on reflection, believe that 80% of the people who work at MS have an MP3? No, that number is just too much higher than the national average to believe it without better information than an anectdotal report.

    Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
    Subject:

    Quote
    B-sabre wrote:
    Do I, on reflection, believe that 80% of the people who work at MS have an MP3? No.


    Good, because that's not what the article said.

    I mean, yeah, THIS article said it, but it's because they quoted it wrong in the interview that this article is about.

    The ORIGINAL article said that 80% of MS employees THAT OWN MP3 players own iPods.

    I don't know if that's true, either, but it's easily possible.

    Close Name:B-sabre Posts: 70 Joined: 18 Jan 2005
    Subject:

    Quote
    Small White Car wrote:
    Quote
    B-sabre wrote:
    Do I, on reflection, believe that 80% of the people who work at MS have an MP3? No.


    Good, because that's not what the article said.

    I mean, yeah, THIS article said it, but it's because they quoted it wrong in the interview that this article is about.

    The ORIGINAL article said that 80% of MS employees THAT OWN MP3 players own iPods.

    I don't know if that's true, either, but it's easily possible.


    ...sigh... Actually, that is exactly what the original source in the Wired article said.

    Quote
    To the growing frustration and annoyance of Microsoft's management, Apple Computer's iPod is wildly popular among Microsoft's workers.

    "About 80 percent of Microsoft employees who have a portable music player have an iPod," said one source, a high-level manager who asked to remain anonymous. "It's pretty staggering."

    The source estimated 80 percent of Microsoft employees have a music player -- that translates to 16,000 iPod users among the 25,000 who work at or near Microsoft's corporate campus. "This irks the management team no end," said the source.


    I can't make it plainer than that - 80% of Microsoft employees have a "portable music player" and 80% of those are iPods. And I just don't buy that first number now. The second, maybe. But not the first.

    Edit: I am assuming that by "portable music player" the source meant an MP3 player of some kind, and not a CD, tape or minidisc.

    View Name:Guest
    Subject: OMG it's plain english, but you're misreading it.
    Close Name:B-sabre Posts: 70 Joined: 18 Jan 2005
    Subject:

    Quote
    Guest wrote:

    When they say "80% of MS employees WHO USE portable music players own an iPod" they mean that if you take the group of MS employee people who actually own music players (that particular number of which we don't know), 80% of THAT GROUP own an iPod. That doesn't mean 80% of ALL MS employees use an iPod. Just 80% of the music player owners. That could be 20 people. That could be 2,000 people. That could be 4 people. Until they actually say, for example: "out of all 25,000 MS employees, 10,000 of them use music players" or whatever, then you could calculate that 8,000 (80% of 10,000) use an iPod. The percentage (80%) is to be used on the number of employees who own music players (which is not listed), not 80% of the entire group of MS employees. It says "of those who own music players" not "of all employees in the company."

    Regardless, it's just funny that MS seems scared of a little thing called competition.


    The necessary information is right there in the original Wired article:

    25,000 people work for Microsoft at Redmond;

    80% of those people own a "portable music player"

    80% of the people who own a portable music player own an iPod.

    25,000 x 80% x 80% = 25,000 x (0.8 x 0.8) = 25,000 x 0.64

    25,000 x 0.64 = 16,000

    Jennings, and numerous others screwed up in saying "80% of Microsoft employees own iPods." Billy is probably correct if he doesn't believe 80% own iPods. Its more like 64%. If you buy any of the 80% figures being tossed around.

    Close Name:macnut Posts: 52 Joined: 28 Jul 2004
    Subject:

    Quote
    Guest wrote:
    I can see now that you are all breathing the same chemical. Just because Steve-o talks big does not mean his numbers are correct. In the real world, people who talk big numbers are all just trying to make a failure seem like something it is not. It's funny that people tend to reference online and print articles to show just how much Apple has done and sold, while those articles are themselves getting the numbers from Apple.

    Get a clue, people. I'm not saying not to buy a Mac or use iTunes. Just that the iPod and iTunes are not nerely as big and popular as Steve-o is telling you it is.


    You do know that Apple gets their Marketshare numbers from NPD Techworld (iPod) and Nielsen Soundscan (iTMS), right???

    Apple's not just pulling these numbers out of their a$$.

    View Name:Guest
    Subject:
    View Name:Guest
    Subject:
    Close Name:mrhooks Posts: 272 Joined: 28 Jul 2003
    Subject: Re: OMG it's plain english, but you're misreading it.

    Pot, kettle, black?

    Paragraph 3 of the excerpt of the Wired article B-sabre quoted: "80 percent of Microsoft employees have a music player".

    Paragraph 2 of the same excerpt: "About 80 percent of Microsoft employees who have a portable music player have an iPod".

    As I've illustrated with italics, those two quotes DO NOT say the same thing.

    Close Name:B-sabre Posts: 70 Joined: 18 Jan 2005
    Subject:

    Quote
    mrhooks wrote:
    Pot, kettle, black?

    Paragraph 3 of the excerpt of the Wired article B-sabre quoted: "80 percent of Microsoft employees have a music player".

    Paragraph 2 of the same excerpt: "About 80 percent of Microsoft employees who have a portable music player have an iPod".

    As I've illustrated with italics, those two quotes DO NOT say the same thing.


    The first citation ("About 80 percent of Microsoft employees who have a portable music player have an iPod,") is a direct quote of a Microsoft "source" - his words, as spoken to the reporter. That's why they are in quotes.

    The second citation (The source estimated 80 percent of Microsoft employees have a music player ) is a paraphrasing of something the source also said to the reporter, and obviously refers back to the first quote from its placement and order in the story. The second cite gives context to the frist quote, illustrating the magnitude of the penetration by the iPod into MS.

    He then follows up with a second quote ("This irks the management team no end,") showing that the two quotes and the paraphrase are all related and part of the same discussion. Why would he change topics midstream in a conversation between portable and "non-portable" music players? The paragraph structure and story narrative make it obvious that they refer to the same thing.

    Maybe he had "portable" in that second cite at some time, but an editor took it out to make word-count, or because its too damn awkward to say "portable music player" yumpty-yump times in an article. You're splitting hairs if you keep trying to say that they are not related solely on the absence of the word "portable".

    I'm done parsing the Wired article, unless you want to argue about what the meaning of the word "is" is....

    Close Name:wthackrey Posts: 1 Joined: 18 Feb 2005
    Subject: iPod Market Share

    Help me out here. Is the Anonymous posting a joke... or is the guys just an anit-Apple lunatic? As rec