Ballmer: Microsoft Wants Back the Marketshare Apple is Taking

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Microsoft's annual shareholder meeting put CEO Steve Ballmer in the hot seat answering questions about marketshare the company is losing to Apple. Mr. Ballmer was quick to point out that his company still controls the majority of the OS market, but that every percentage point counts -- even the points that belong to Apple.

One shareholder said that his college age children all use Macs, and that Apple's ad campaign makes Microsoft look like a "buffoon," according to the Seattle Times.

"The truth of the matter is we do quite well, even among college students. Do we have an opportunity for improvement? We do. Some of that is marketing, some of that is phase of life. Ninety-six times out of 100, people choose a PC with Windows," Mr. Ballmer responded. "Mac has picked up a couple of tenths of a percent of market share last year. But every tenths of a percent matters."

Shareholders hit on the iPhone's popularity, too, by asking just how Microsoft plans to compete with Apple's combination iPod and smartphone as well as the Google Android platform. Mr. Ballmer apparently skipped past the iPhone to talk about Android instead.

"We have greater market share to Google Android. Our objective is to have a leading position among these competitors," Mr. Ballmer said. "We have just recently launched a new generation of Windows phones with new software. We are going to keep making investments, we have a lot of opportunity."

Microsoft's recent Windows 7 launch could help the company regain some customer trust if the operating system isn't burdened with the same issues Windows Vista was plagued with. It's also an opportunity for Apple to draw more switchers to Mac OS X, and that's what company's recent ad campaigns are targeting.

If Microsoft can keep customers from abandoning Windows in favor of Mac OS X, it could stop Apple from slowly chipping away at its operating system market share.

The smartphone market, however, looks to be the iPhone's playground. Mr. Ballmer's response to shareholders seems to indicate Microsoft would rather compare its smartphone marketshare to Android instead of the iPhone, which might be an indication that he knows which smartphone battles he has a chance of winning.

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Comments

Jeff Gamet

Looks like Microsoft has some damage control to do with shareholders when words like “buffoon” enter into the conversation. That doesn’t mean, however, that Microsoft is spiraling towards certain death. It’s a big company and it’ll take a long time for other companies—including Apple—to make a significant dent into Windows’ marketshare.

Reddogslc

Steve Ballmer is more greedy than most.

Vermonster

If Ballmer thinks the MS is going to get back those Apple converts, he is seriously mistaken. The reasons that Windows uses switch to Mac aren’t going to go away just because MS released a new version of Windows.

J

Consumer market is one thing, the commercial market is another, and where the big money hangs out.  Apple advocates who try and push for getting XServes in the server room aren’t helped by Apple’s on-again, off-again commitment to providing the server hardware.

Vista was more of a marketing failure than an actual OS failure, anyway.  We have been running it for years (as well as OS X and Linux) as a desktop OS, as well as in our automated regression testing lab, and really, it’s as good or as bad as the other two in terms of stability and use.  They all have their warts.

MrWhite

His says 96% of people choose windows over Mac, what he and most people factor, the fast majority of those windows machines are being bought corporations. Not consumers. Big differnce, as IT units only use windows for job security reasons only.

jbruni

I thought Apple’s marketshare gains were a mere “rounding error”?

JC

” Big differnce, as IT units only use windows for job security reasons only.”

Really!!!!  As a business owner, and a personal MAC user…I don’t buy Windows machines in order to keep my IT department employed.

I have users, many of them, I can buy 3 Windows Machine to one MAC….That’s why I buy them.

It’s about the bottom line.

Photodan

I’m not a huge supporter myself but aren’t they forgetting Linux in this discussion?

On a slightly different matter, are MS stockholders really that concerned with the Mac’s comparatively miniscule gains in market share? There are much bigger fish to fry in Redmond.

rpaege

I have users, many of them, I can buy 3 Windows Machine to one MAC (sic)?.That?s why I buy them.

Really?  Are you giving the Staff $300 netbooks to work on?

Mac over PC?

Lets face it.. Mac is the Ashton Kutcher of the world and the PC is the Alan Greenspan.

When it comes to central mangemnent and large scale networking, Mac is about as brain dead as all the Hollywood Celebs it tries to act like. smile

It will be interesting to see what happens with Google Chrome.

UrbanBard

Microsoft’s market share will be exposed for the fraud it is. The Vista users (6 to 8% of the computer market) have every reason to upgrade to System Seven. Most of the business market, which downgraded to Windows XP to maintain their workflows, will be holding off for better economic conditions.

The Windows 2000 (3%) and a third to a half of the XP users (79%) are on computers too old to take advantage of System Seven. Many of these are computers in businesses which do a single function well and there is little reason to upgrade them until the hardware cannot be repaired.

Meanwhile, Apple (9.5%) will be picking up Wintel consumers who’s hardware would need to be replaced anyway. These people will have decided that upgrading to System Seven is not worth it.

Google’s Chrome OS will be chipping away at Microsoft’s low end consumer market, while Apple chips away at the upper end. I expect the computer market share to be divided, next year, into System Seven users, business computers yet unready to move from XP, Apple OS and Google Chromes’s OS.

Rather than Microsoft looking like a robust monopoly, it will look like a company with a long legacy tail. That legacy tail is not guaranteed to move to System Seven. Much of it will stay where it is for many years.

Ion_Quest

I’ll bet within a year, Win 7 is offered preloaded on Macs (or my initials aren’t S.B. or even B.S.)

KenC

Our objective is to have a leading position among these competitors,” Mr. Ballmer said.

Well, that’s a comedown. I distinctly remember reading a year and a half ago, where MS stated they wanted to garner 40% of the smartphone market by 2012. I think they’ll be lucky to have 10%.

rpaege

When it comes to central mangemnent and large scale networking, Mac is about as brain dead as all the Hollywood Celebs it tries to act like.

Then why did you spend $25k on becoming a Mac network expert?

FlipFriddle

Lets face it.. Mac is the Ashton Kutcher of the world

Really? I’ve never wanted to punch my Mac in the face.

Yesterday I was happily working away on my Ashton Kucher while my colleagues Alan Greenspan was a doorstop suffering from a viral infection.

Decision validated for me.

Constable Odo

When is over 90% desktop market share not good enough?  That just smacks of incredible greed.  From his statement of saying Mac market share is merely a “rounding error” to now saying Microsoft absolutely has to take back tenths of a percent of market is ridiculous.  They’re the biggest software company in the world, have by far, the biggest market cap for tech companies to which nobody is coming close and they completely dominate the corporate world.  Yet Microsoft wants to take back some insignificant market share that Apple has gained after years and years of going nowhere.  That sounds like totally monopolistic behavior.  Microsoft has been the leading force in computers for almost 35 years with no competition at all.  No wonder Google is going after Microsoft in force.

Lancashire-Witch

I can buy 3 Windows Machine to one MAC?.That?s why I buy them.

3 times the trouble for a third of the cost! Who can resist that?

fo

He’s talking to shareholders. He has to seem aggressive in all areas - complacency isn’t an option here. Ballmer is (unintentionally) one of the funniest CEOs on the planet, and I love reading his ridiculous rantings, but I also see what he’s trying to do - he’s trying to put forth a valiant front to keep investors from leaving the ship. He has no choice - his company can’t compete on ideas. In the words of W.C. Fields, “If you can’t dazzle them with brilliance, baffle them with bull——.”

Photodan

Microsoft has been the leading force in computers for almost 35 years with no competition at all.

MS has been the leading force in sales, not innovation, reliability, design, technology or User-interface. I just wanted to be clear on these points.

urapns

We’ve been all Mac for over 20 years and have over 75 machines. Due to a specific use we had to add 10 Win machines and now I find that we have to hire a M/S fool to take care of them. 20 years without an in house IT person…if I can replace this tool I will as soon as possible. It’s cost savings will be about 1/3 of what was promised due to the crap necessary to keep the Win machines up and running, most Win people view these costs as incremental in that they already have them so the crap I’m now dealing with is just another line on the list. In my case it’s a list that never existed before. Ballmer is like all the other CEO’s, they have no clue what’s happening in the trenches.

deasys

it?s as good or as bad as the other two in terms of stability and use.? They all have their warts.

Oh, right. Vista is just as good as Mac OS X. No real difference. Got it.

I believe you where a thousand others wouldn’t, J. Keep up the good work.

deasys

I have users, many of them, I can buy 3 Windows Machine to one MAC?.That?s why I buy them.

Wow! What are those $200 PCs like? Pretty reliable?

I personally prefer MAC.

(You’ve never used a Mac, have you, “JC”?)

deasys

When it comes to central mangemnent and large scale networking, Mac is about as brain dead

Yeah, I know. It would be great if Mac OS X was an industrial strength OS like Unix.

Oh wait…!

wilf53

Lets face it.. Mac is the Ashton Kutcher of the world and the PC is the Alan Greenspan.

Are we here talking of the same Alan Greenspan who admitted that he had been wrong about some basic principles regarding the market? Some details about deregulation?

If it is the same Greenspan, I can see that you have a point. Somehow. smile

gslusher

Consumer market is one thing, the commercial market is another, and where the big money hangs out.

In numbers of units sold, yes, but, in terms of profit, no. Big businesses and government entitites, who buy a lot of PCs, can negotiate the price down to the point where margins become perilously thin, That’s one reason why so many small PC manufacturers went belly-up in the ‘90s, leaving only the really big companies like Dell & HP who could take advantages of scale (e.g., spreading engineering costs over many units).

I doubt that the Apple management cares a whit about “marketshare.” They care about revenue & profit.

ipaqrat

Ask a precise enough question, it answers itself. So to me, the question of which is better, and on what basis that is judged, boils down to this question:

To whom does the qualitative difference between MacOS and Windows matter?

Compare a Honda Element (Windows) to a Porsche 911 Carrera 4 (Mac Snow Leopard) - Yes, I own both cars, both OS’s.

They are equally reliable. They have on-demand 4 wheel drive. They get @ 25 MPG. At my age, they are cheap to insure. Air bags. Sat Nav. Awsome Sound systems. Park in compact-only spots at Ikea. Same-Same. Who cares.

Element hauls cargo. Porsche hauls ass.  That means something to me.

Element gets maintenance at corner gas station by an indian dude and a teenage kid out on parole. I eat a slim-jim while I wait and maybe pet the shop dog (who wants a bite of my slim-jim and looks like he needs it.). Porsche gets maintenance in an equally squalid shop by a certified specialist who has owned a porsche since he was 16 and races on weekends. That means something to me.

Element needs careful throttle control so it doesn’t drop a gear, spike to 5000 rpm to maintain speed up a hill. Porsche needs careful throttle control so I don’t snap my passenger’s neck when I pull away from a light. That means something to me.

Does Honda seriously consider Porsche a competitor? Would Honda’s president feel bad if a board member whined that Porsche sales improved in Kentucky?

Neil Anderson

PC users who left for Mac are not coming back.

UrbanBard

The point is that the market will decide. We will not enough evidence to tell us anything for a while.

I’m betting that a year from now that Microsoft be close to these figures.

System Seven   12%
Vista           2%
Windows XP   70%
Windows 2000 3%

Apple and Chrome are still a toss up, but both will be bigger than now.

James

I love how Ballmer continues to give his attention to precisely the wrong issues facing his company. Heaven forbid they actually improve their products instead. With this attitude, Microsoft will continue to flounder, methinks, regardless of their size.

lrd

To Microsoft investors-

Expect another 5,000 workers being laid off in the coming months.

That’s about the only way MS will maintain its profits going forward.

Happy holidays!

UrbanBard

Steve Ballmer is doing what he always does: putting the best light on bad news. I suspect that he knows that system seven is not preforming as well as expected. He is shining it on. Meanwhile, we must wait for the results.

ctopher

@UrbanBard - Please, please, please stop calling Windows 7 “System Seven”. System 7 was a version of Mac OS that included a lot of features and changes. That’s why Apple called software “System Seven Savvy” if it supported Drag-n-drop or Apple Events. It was a big change over System 6 and helped propel the Macintosh market forward with state of the art features like co-operative multitasking and personal file sharing over TCP-IP network.

So please stop sullying the good name of System 7 by conflating it with a Microsoft product. Instead call it by it’s official name “Windows 7”

Thanks.

UrbanBard

Yes, you are right. I should be calling it by its official Microsoft name. Internally, its designation is Windows 6.3. The Windows 7 name is a marketing appellation which pretends that it is separate from Vista, when it s not.

If you wish, I could call it Vista Sp3.

I see no reason to flatter Microsoft or to imply something which is untrue. Most people knew what I meant.

ctopher

@UrbanBard. If the point of your post was to say that Windows 7 is no different than Vista, then say so. Instead you seem to be making a point about Windows 7 and market share. To make that point you use the currently accepted marketing appellation for all the other Microsoft operating systems: Windows 2000, Windows XP and Vista. Why not Windows 7?

Being cute does not enhance clarity. I know because I’ve been guilty of it in the past. I don’t believe it flatters Microsoft to call their products by their given name. Especially when you’re making a point about their adoption rate. I believe it does flatter Microsoft to refer to one of their products with the same name as an Apple product.

If you want to be cute, call them all Windows NT!

UrbanBard

I never said that Windows 6.3 was no different from Vista. I am repeating the assessment made by Steve Ballmer that Windows 6.3 is “Vista as it was meant to be.”

What’s wrong with that? ” A rose by any other name would smell as sweet.”

My position is that Windows 6.3 is much improved over Windows 6.2, but remains fatally flawed. The problem with it is that after Longhorn failed, Microsoft was forced to take a clean copy of Windows Server 2003 to build Vista on. Windows Server 2003 is an updated version of Windows NT and keeps its inherent flaws. It follows in the NT numbering scheme. What is wrong with that?

System Seven is not a derogatory comment; Ballmer, himself, called it that.

Are you being politically correct here? Do I get fined for using incorrect terminology? Need I play along with Microsoft marketing?

PS. The proper name for the Apple product you mentioned was Macintosh system seven. How could you confuse the two?

But, this discussion is needlessly stupid.

gslusher

System Seven is not a derogatory comment; Ballmer, himself, called it that.

Could you provide a link where Ballmer, himself, uses “System Seven”? I checked the first 40 results on a Google search on ballmer “system seven” and every one was someone (perhaps you?) saying that Ballmer said this, usually in a comment to an article, like your post here. I couldn’t find where Ballmer, himself, said that. A video clip would be nice.

UrbanBard

I could find the link, but it is too much bother. I have nothing more to say on this thread, so I will let it go. It bores me. Bye.

My only point was that there are too many imponderables to be able to say much about Microsoft’s market share for a while. Some of the assumptions are unlikely. I think many of XP users, will be long delayed inupgrading and are up for grabs either by Apple, or more likely, Chrome OS.

Look, I don’t like offending people. And I really don’t care what I call the versions of Windows. It is not my pattern to be insulting.  It’s just a habit from about a year and a half ago. Eventually my natural laziness says that, I’ll get around to calling Seven or some such. No offense was intended.

ctopher

Ahh, and the complete name for all of the version of which you refer should perhaps refer to “Microsoft Windows XP”, “Microsoft Windows 2000” etc.

Is this discussion stupid? I don’t think so. Pedantic perhaps, but I don’t believe it’s stupid to point out that referring to “Microsoft Windows 7” as “System Seven” is confusing and detracts from your point. My note was to take you to task for doing so. No more, no less.

UrbanBard

And my objective was to tell you not to sweat the small stuff. I seriously doubt that I confused you or anyone else. You were being needlessly doctrinaire.

My phrase was not an intentional insult. I let insults just pass me by. Boring.

dbelsham

People for every one Mac user there are 9 happy PC users. and if you look at the business users it is probably 9.9. contrary to stupid ads windows users are not flocking over to Macs in droves, it is a trickle and with windows 7 that trickle will probably dry up. if Steve Ballmer focusing his attention on gaining back the .2 or .3 % that he lost to Apple I would guess Microsoft is in pretty good shape.

If you read between thew lines on the I am a mac ads you would see that they were true. Just the slant was wrong. People do us PC to do boring Business stuff like make pie charts etc. Because most business application are only available on PC. I would say that 90% of the 6-8 hours a day I work on a computer is work related. They few things that Apple does better some one ported an acceptable version to windows anyway.

The only reason that Widows user have to worry about viruss
which by the way is not something that I lose sleep over is because the market share of MACs is so poor that it is not worth crooks to waste time on attacking. 

The biggest problem with Vista was bad Press. Any issues brought about by the new OS was no different then the issues Apple has with Snow leopard.

The strange thing is that Mac users think that they are in competition with Microsoft. Apple makes Hardware, it took them to version 10 until they finally got a stable OS. Every new version meant reprogramming all there old software so it would work on the new operating system. OS 10 it basically a Mac interface on a Unix OS which Microsoft dealt with with windows 3.1.A lot of apples computer looked good were very innovative but unfortunately they don’t the software to make them work. Why pay extra for something that does less things. 

Apple is basically a Toy maker it make toys like Ipods and I-phones and now the Ipad. There software caters to hobbies that likes, to take pictures list to music and have fun. But very little of what they offers has any practical Business applications.

And don’t get me started on the I-pad. The best I heard about it is not think of it as a computer but an appliance that reads books. It may compete with Kindle.

I am a PC and love it.

UrbanBard

I agree that Ballmer would be better off ignoring Apple. It’s bad advertising to mention a competitor.

I question how happy (or content) Microsoft Windows users are. There are many reasons for staying with Windows. Some of that is bias, ignorance or inertia. It’s hard to go get people to change from the devil they know.

Often, it takes years to work up the gumption to change, given the FUD against Macs. The pain level has to get rather high to provoke a shift. Windows Seven is improved sufficiently over Vista to reward people for upgrading. Hence, there is a temporary lessening of Windows pain, but it won’t be going away. Windows is continual train wreck.

Macintosh sales have been growing at around 30% a year. It doesn’t take too many years of that before you see major changes. The latest sales figures see an accelerating growth in Mac laptops. Apple now sells well over 90% of the premium laptops.

http://www.applematters.com/article/mac-sales-its-all-about-the-chips/

I expect most institutional users to remain with Windows XP for a number of years. There is not enough benefit for them to upgrade and the hardware expenses are high.  It is not automatic that XP users will upgrade to Windows Seven. There are a number of imponderables operating here. We don’t know what effect the Chrome OS will have on this.

What issues did Apple have with Snow Leopard? It was one of the smoothest upgrades; ever. The upgrade to Leopard 10.5 was much longer drawn out. Some of my friends waited ten months, and 3 bug fix revisions, before switching. But, by the time 19 months was in, 93% had upgraded. The move to Snow Leopard is faster than that.

The only problem, in Snow Leopard, was that developers misjudged how much time they had before release. They thought they had another month. Many of the developers upgraded within the next month and into 64 bit code too. I think Apple is on schedule to get 90+% of their apps upgraded to 64 bit code by June or July. Then, they can turn on the 64 bit kernel by default. But, there no hurry.


I’ll not say too much about Vista. It was businesses who rebelled and stayed with XP. Vista did not serve the business market well. Windows Seven does a bit better, but I still don’t see a major rush out of XP machines, yet. Do you?

Mac users think we are in competition with Microsoft, because Microsoft obsesses about Apple, as Steve Ballmer showed.

Yes, it took Apple until Version 10 to get to a modern Modular, Object Oriented, Mult-user Operating System. Apple did so by buying an OS which already worked, NeXTstep, and reworked it to look like the old Mac OS. Then, it had all kinds of teething pains, which are, thankfully, now over. Apple is in the process of obsoleting the procedural Carbon API’s which helped move it from the original Mac OS.

Microsoft hasn’t started moving Windows toward a modern Modular, Object Oriented, Mult-user Operating System yet. Windows is a Stand Alone disk system which is utterly unsuited for the internet. This is why businesses must spend billions of dollars each year protecting themselves from malware which doesn’t happen on a Mac.

http://rixstep.com/2/20090601,00.shtml
http://rixstep.com/2/20090726,00.shtml

Apple intentionally does not serve the business market. Some of that is historical; Apple, in 1997, was pushed back into its niches in the Graphic Arts, Design and Education markets.

Since then, Apple has moved into and gobbled up the upper end of the consumer market. Why? Because that is where the money is. Apple is now rushing into the Small to Medium Sized Business markets. Apple has little interest in Government or big business sales which you like so much. And it probably won’t for while, because it has other fields to conquer.

Partly, that is the result of Apple growing the computer market by providing computers to people who ordinarily dislike or distrust them. Apple must make computers which look like toys, because that will appeal to the 50% of the population which is non technical or Anti-technological. The technical oriented market has already been served.

The PC market is not growing; It is, at best, a replacement market. The PC market’s best sellers are NetBooks which make the manufacturer little money. That is not healthy for PC’s. Apple is the only part of computer market which is growing and profiting from that. Apple is into NEW markets, not OLD ones. Therefore, it is not directly in competition with Microsoft or the Wintel manufacturers. But, Google is taking Microsoft head on, though.

You seem obsessed about business uses. It seems quite clear that Apple is not trying to sell to you. You are not in Apple’s market purview. Apple has no reason to appeal to you. It is doing quite well by catering to consumers.

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