Steve Ballmer: “Tides Have Turned” Against Apple & the Mac

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Microsoft CEO Steve Ballmer

The tides have turned against Apple in the computer market, according to Microsoft CEO Steve Ballmer. The comments from Mr. Ballmer came at the McGraw-Hill Companies’ 2009 Media Summit in response to an interview question about the momentum Apple is perceived to have.

According to TechFlash, Mr. Ballmer responded, "Apple gained about one point, but now I think the tide has really turned back the other direction. The economy is helpful. Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be."

Mr. Ballmer is asserting, in other words, that the only difference between a Mac running Mac OS X and a PC running some variant of Windows is a price difference of US$500 and the Apple logo. Such might be expected from Big Redmond's CEO, who also made a point of showing that his family owned no Apple products when asked if there was perhaps a secret iPod in his life.

"No, none. I don't, my sons don't, my wife doesn't. You're talking to a guy, though, whose dad worked for Ford, and once Ford sold Land Rover and Jaguar, we're selling the cars to get Fords, so you may have a weird outlier in me."

Microsoft chairman Bill Gates's wife, Melinda Gates, made similar comments recently, when she told Vogue magazine that her kids were not allowed to have iPods or iPhones, though she admitted she "wouldn't mind having an iPhone" for herself.

Apple has been gaining significant market share for the last several years for its Mac platform, more than the 1% Mr. Ballmer mentioned in the U.S. market, but approximately 1% in the global market. The company celebrated several record quarters in 2008, with growth in Mac sales higher than the growth in the market (note that the December quarter showed a mix of contraction and growth in the PC market).

For Apple, the company's growth slowed in the December quarter, but Mac sales still grew year over year. That, it would seem, is the foundation of Mr. Ballmer's remarks, but it remains to be seen if his cheer-leading conclusion is accurate.

Apple will announce March quarter sales in April, third party firms such as NPD and Gartner will be adding additional color to February and March in the coming weeks, as well.

As for Microsoft, the company recently laid off 5,000 employees. There was a hot item about Apple laying off 50 employees in one aspect of its Enterprise sales team, but then there's the caveat that those responsibilities were outsourced to third party retailers. Oh, and how at least one group in Enterprise at Apple is actually adding headcount.

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33 Comments Leave Your Own

Laurie Fleming

We need some light relief in these troubled times.

Seriously though folks, he says this sort of thing in public, but I’d love to know what goes on in the Microsoft boardroom. He’s not a stupid man - he can’t really believe this shite.

Bryan Chaffin

Laurie, you are, as usually, right, but I do think Mr. Ballmer has an enormous capacity for self-delusion. He’s a True Believer? in Microsoft’s business model, and I just don’t think he’s been able to see that much of Apple’s success is the result of a backlash against the crap that results from that license-to-all model.

Bryan
Editor
TMO

Tiger

He’s a white/black sort of guy. For one to succeed, the other must fail.

I have news for Mr. Ballmer. I just ordered a MacPro for $2,500. And not because it has a logo on it. Because it does what I need it to do with relative ease and treats me well. It’s replacing a 7 year old G4 that has gone from OS 8 to OS 9, to OS 10.

Any 7 year old PCs out there capable of running Vista Pro? ANY?

The economy is actually showing signs of improvement. Too bad Mr. Ballmer’s demeanor isn’t.

brett_x

Clearly, it’s time to sell all of your AAPL.

domsin

Ballmer is not only delusional, he is self-destructive.  The statement that his family only buys Fords speaks volumes about his judgement.

MOSiX Man

To quote a great rabbit “What a rube! What an im-buh-sill!’ Steve Balmer definitely bathes in the Microsoft Cool-Aide. Unfortunately, there is still a large contingent of folks out there that actually buy into this kind of FUD from MS. Luckily, enough people have seen the greener grass of Mac OS X and other alternatives to Windows, and are learning not to automatically trust any ‘facts’ coming out of the big buildings in Redmond.

I wish that there was a law (in the U.S.) allowing people to challenge these kinds of public statements (specifically statements that may harm market competitors or give market advantage to the speaker). Not being able to provide sufficient proof of truthfulness should be considered a form of fraud.

I think that would prevent a lot of this kind of misleading, and often downright incorrect, misinformation from being so freely dispensed to influence consumers. I mean, there is a difference between stretching the truth a bit in advertising, and completely fabricating crud like this.

I challenge ANYBODY to show me a good example of a Mac configuration currently sold by Apple, and a new, identically (or nearly identically) configured (including built-in application software), major name-brand PC - NOT a no-name Mac Clone - that can be bought for $500 less than the Mac.

As Descartes said, just before he disappeared in a puff of philosophy, ‘I think not’.

James

His comments also appear to have been made under the assumption that Apple is competing in the traditional PC consumer space-his biggest delusion of all might very well be adherence to business practices based on the PC model of a decade ago that his company dominated. His observations might very well ring true if time had stood still and Microsoft’s strategies were relevant to the nascent shifts we’re seeing toward non-traditional computing devices.

Someday we’ll look back and think of things like netbooks etc. as the tottering first steps toward this new frontier, of which Apple once again seems to be pointing the way. This is all just barely getting started as far as I can tell-it’s much too early to be so haughty about anything (though I guess that’s never stopped Ballmer from chewing his Pumas in the past).

Boscher

I don’t think that Ballmer is stupid either but he only will see and hear what he wants to.  He takes any information that pertains to Apple and bends it to suit his argument and he is always so defensive.  “Only 17 million iPhones sold?  HA!  We have sold a gazillion with Windows Mobile!”  If you don’t or can’t change with the times, you will get left behind…I think Ballmer realizes (or won’t) that their business model is not working like it used to but he won’t change…until someone gives him an iPhone.  smile~

Richard Platt

Says Balmer, as he frantically puts more chewing gum and bailing wire on a crumbling Windows.

Macfox

What a shame that both Steve and Bill’s families are “not allowed” to buy Apple products. Who do they think they’re hurting? Not really Apple. People buy Apple products because they are simply great products.
I’m sorry Bill and Steve. Apple is not the “enemy”, Apple is just a great innovator; unlike your company.

Like Laurie Fleming says, it’s good to see the humor in these types of statements.

salparadise

Bluster-monkey.

Next!

Bosco (Brad Hutchings)

You can’t spell Steve Ballmer without BALLS EVER, as in biggest BALLS EVER.

Ric

I don’t know why, but I think Monkey Ballmer deserves an entry in the Death Knell with such wise predictions…whaddya think? wink

ipaqrat

Well, people are kinda funny… I overhear plain old folks talking about the Macs and PC’s in the local big box outlets. The dramatic differences between the MacOS and Windows are lost on most folks.

Apple sells to people who values the differences at each price point (performance, functionality, service life, user friendliness, cool factor). Microsoft DOMINATES the overwhelming majority of people who do not value the differences.

It’s kind of like Porsches. Regular folks just don’t get Porsches. They may think a 2003 Acura RSX Type S is a pretty hot ride. It looks good and goes like a scalded cat. My wife has one. She likes it a lot.

But my 1996 911 Carrera 4 will knock it into the dirt.  At 10 years old, it cost almost double what wife’s RSX did brand-new. Believe me, I appreciate the difference. Mac Users. Porsche Drivers. Ducati People. Hermes Chicks. Breguet, Macallen… 

Ballmer and Ozzie don’t have to get it. But windows would be a much better product if they did.

Terrin

Actually, that is the only smart thing he said. That isn’t to say that there aren’t other good vehicles out there made by companies other then Ford, but his sentiment 1) is smart since Microsoft is an important Ford business customer (Microsoft’s new Sync technology found in Fords really works great including with iPods), 2) Ford actually makes some really decent cars compared to some other offerings both foreign and domestic, and 3) buying American is the ultimate form of patriotism. Ford’s, “Have you Drive a Ford” lately commercials really sum it up. Ford’s vehicle rank right up there with Toyota, Volkswagen, and Honda in terms of quality.

As far as Ballmer’s Apple comments are concerned, what do you expect? The guy’s job is to promote Microsoft. I doubt he actually believes half of what he says. If he does, Microsoft is in trouble.

Ballmer is not only delusional, he is self-destructive.? The statement that his family only buys Fords speaks volumes about his judgement.

Terrin

Actually Microsoft might learn something if the family did buy Apple products. Perhaps, the families could explain to Gates and Ballmer why Apple is becoming so successful. Moreover, it probably would help prevent their kids from being picked on.

What a shame that both Steve and Bill?s families are ?not allowed? to buy Apple products

xmattingly

“So, the thing is, people pay an ‘extra’ $500 just to have an Apple logo on their computer. Yeah, that’s it - that’s the ticket.”

Yeah, right. Like there isn’t a massive difference in operating system, architecture, hardware reliability, resale value, and total cost of ownership. Ballmer’s oversimplified views of his competitors and the market in general can only be contributing to M$’ tail spin.

I thought the Ford comment was pretty interesting, and it makes perfect sense, when you connect Ballmer + Ford + Microsoft: Found On Repair Desk.

Lee Dronick

Ford actually makes some really decent cars compared to some other offerings both foreign and domestic, and 3) buying American is the ultimate form of patriotism. Ford?s, ?Have you Drive a Ford? lately commercials really sum it up. Ford?s vehicle rank right up there with Toyota, Volkswagen, and Honda in terms of quality.

After 30 some years of driving a Datsun (500,000 + miles) and then a Nissan (319,00 miles) pickups I bought a Ford Ranger. Consumer reports rated the Toyota slightly higher, but gave the edge to the Ranger because of price. A few weeks ago I paid it off and will keep it as long as it is economically feasible, but I no longer do my own repairs. For the most part I have been happy with it and recommend one to anyone wanting a mini-pickup truck.

As to Ballmer’s statement. Well he has to say something like that, he has to support his own team. When was the last time you heard a sports team coach when asked how they were going to in the big game this weekend answer “We don’t have a snowball’s chance in hell of winning or even doing well, we should not even show up.”

B9robot

He?s a True Believer? in Microsoft?s business model, and I just don?t think he?s been able to see that much of Apple?s success is the result of a backlash against the crap that results from that license-to-all model.

I couldn’t agree with you more Bryan. He’s so blind to the fact that Apple is getting the business because of his STUPIDITY and ENORMOUS EGO!!!

B9robot

Try GM, there the ones on the verge of bankruptcy, not Ford.
Ford hasn’t even asked for any bail out money from the government.
Only Chrysler and GM have done that.

Cat

The fact tbata he says what he says, let’s me know that Apple is right on track,,, friends at work continue to switch from IBM clones to Macs, and I stopped “talking up” macs a LONG time ago. They just noticed that the mac folk talk about things like “did you get this or that progrAm” or “hey, what’s a faster way to ,,,”. And thief IBM/microsoft Friends only talk about how do I fix this problem, or what so I do if this happens, or can you help me ? I got a virus,,,,

My 2.93 just came, and I’m gonna enjoy configuring and setup,,,
Won’t take me too longggggggg!!!

Laurie Fleming

“There the ones” - bzzt - it’s “They’re the ones”. Sigh.

You’re correct - Ford has not asked for bailout money. On the other hand it has dropped its wages and benefits from $US70/hour to $US55/hour, and eventually to $US50/hour, in an attempt to save $US500m a year. It’s currently trying to reduce its debt by 40% of a staggering $US25.8b. So although the other big two have enormous problems, Ford is not far behind.

But I’m sure Ballmer is aware of that too.

auramac

When I was a kid, I was “not allowed” to uh.. party and have sex.

Hmmm..
Forbidden Fruit.

FastEddie

Please God, let Ballmer continue to run M? for at least ten more years. On second thought…  five more years with him puling the levers may do it to demote them from dominant to just a player. As always, talk is cheap. The marketplace always decides who gets to be King Kong.

Tiger

‘Scuse me Mr. Ballmer, but have you compared stock prices of your company versus Apple lately. For the past year for that matter?

Apple closed Friday over $101 per share.
Microsoft’s closed at a very competitive $17 per share.

Microsoft lays off 5000 employees.
Apple lays off 50 employees.

Who’s kickin’ who’s a$$?

Bryan Chaffin

Tiger, it is important to note that share price comparisons between stocks are not useful in determining how the markets perceive two companies. It’s market capitalization (share price times the number of shares outstanding) that really counts.

On that front, Apple is worth a bit more than US$90 billion, while Microsoft, even at its massively deflated share price we’re seeing today, is still valued at more than $151 billion.

Mind you, I’m with you on the other points. smile

Bryan
Editor
TMO

eugenio

4 words for you Ballmer, “You’re OUT OF TOUCH!!!”

Tiger

Brian, a valid point, but since his comparison was about how the company is viewed in general, it is a valid reflection of how out of touch he is. Daily headlines have Apple at the top of Customer Satisfaction lists, Steve Jobs at the top of CEO lists, etc. Ballmer himself is just a blip, best known for his monkey-like thrashing around the stage during his rants and tantrums. I still wonder what goes through his brain at times. That is NOT normal behavior, except for monkeys (as we’ve seen lately, they go crazy at times).

So, an Apple a day keeps the nutjob at bay? grin

/did I mention I bought a new MacPro?
//did I also mention I got the email that it has shipped and it will be here in a few days?
///maybe I’ll go ranting and raving like a crazed monkey when it gets here!

mike

Anyone see the resemblance of this guy to Rush Limbaugh?

Someone needs to jot down all these quotes and write a book similar to Al Frankens titled book… “Steve Ballmer is also a BIG FAT IDIOT”

cramar

Hey “Bury Your Head in the Sand Ballmer,” the tides have turned…against Microsoft!  That began with the release of Vista.

If you actually took your head out of the sand you would allow your family to buy iPods and ask them why they like them better than Zune. You might actually learn some valuable marketing intel first hand. But of course if you tell them just to ignor Apple it might just go away.

You figure people are paying $500 more for just an Apple logo?  I know someone who bought a cheap black netbook, installed OS X, then put a big white Apple logo on it. It causes quite a stir. That logo is important. It stands for something. It means it no longer has MS inside.

FastEddie

I like the earlier comparison of Balmer to a monkey. I’m picturing Balmer, the monkey, and that other idiot monkey, Al Franken, huddled on a deserted beach picking lice out of each others back hair (since B is bald). For a touch of irony, in my vision they’re watching the Final Four Tournament on an iPhone

Bregalad

I challenge ANYBODY to show me a good example of a Mac configuration currently sold by Apple, and a new, identically (or nearly identically) configured (including built-in application software), major name-brand PC - NOT a no-name Mac Clone - that can be bought for $500 less than the Mac.

I believe that all the software differences and great intangibles of the Mac are worth the price difference in most cases.

At the same time your challenge is simply not fair. Just because Apple refuses to make a consumer tower doesn’t mean you can’t compare iMacs to PC towers. In fact, the tower wins on price, performance and longevity which is why a large number of regular Mac forum contributors wish there was a Mac tower in the $1000-1500 price range. Those facts also explain why Apple doesn’t make one. If they did, people would upgrade their Mac less frequently and Apple wouldn’t make such huge profits.

I’d argue that many no-name PCs are superior to the name brand ones. No serious PC gamer or software developer buys name brand towers, they all get custom machines from small independent retailers. You don’t even have to put it together yourself, the PC shop near me charges just $40 to assemble a custom tower.

JLT

I’ve been a Mac user since I was a child. In the early nineties I moved away from Apple due to cost and poorly designed products. I started buying Macs again when OS X was introduced. I realized why Apple was a failing company for so long when I used Windows for a while. It lost focus. It wasn’t making new and usable products just for the sake of making good products. It was making products to compete with competitors that didn’t exist. If you asked anybody at that paranoid company fifteen years ago who were it’s competitors and in what field they competed in, anybody at Apple would have given you a laundry list of companies and told you they compete in everything. This quickly created a “me too” company. With Ballmer at the helm of Microsoft, I’m afraid we’re seeing the same thing happening to this software gian. This guy makes absurd comments about any company that isn’t Microsoft, as they call, Apple, Google, Sony, Nintendo, IBM, Yahoo, Linux, Adobe and Blackberry their major competitors. Not to mention the dozens more they would call minor ones.

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