Microsoft: Whistling in the Dark 88 comments
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Fear and Loathing in Redmond
“Great occasions do not make heroes or cowards; they only unveil them to the eyes of men. Silently and imperceptibly, as we wake or sleep, we grow strong or weak; and at last some crisis shows us what we’ve become.”
It’s an astute observation from Brooke Foss Wescott, which can be applied to companies just as much as it can be applied to men. So let's apply it to Microsoft (MSFT).
Recently, Steve Ballmer got all loquacious at a meeting with financial analysts, many of whom were using Apple (AAPL) laptops. He was moved to comment on the preponderance of Macbooks, referring to Apple as “a fine company” that was prospering from a low-volume, high-price strategy." He then proclaimed that Microsoft hadn’t lost market share to Apple over the past year and any changes in the reported market share numbers were a rounding error.
Nobody needed to butt in and tell him that his statistical skills needed a little polishing, because he contradicted himself in the next sentence by saying that “market share gains by Apple cost Microsoft nothing” and “hopefully we’ll take share back from Apple.”
Math Problems
Ballmer is whistling in the dark. Microsoft’s revenues collapsed 17 percent in the last quarter, mostly from the decline in Windows revenues, while Apple still managed to post growth in Mac sales – albeit of a modest 4 percent. Meanwhile the iPhone was taking off like a rocket.
The tendency of CEOs whose companies are in trouble to become suddenly inept with statistics is legendary, but it’s not in a CEO's nature to stand up and proclaim “the competition is killing us.” But that’s what’s happening to Microsoft. Competition is killing it.
The twin threats of Apple and Google (GOOG) are gradually bringing Microsoft to its knees. Microsoft works fine as a monopoly and it has been skilled in maintaining its monopoly with intelligent and innovative monopolistic practices. But it’s no longer good at competing outside its monopolistic domain.
It was once a skilled marketeer and public relations ringmaster, but no longer. You don’t need marketing skills to maintain a monopoly, so they atrophy. It was once even an innovator in some respects, although innovation has never been its forté. Microsoft’s business model always placed the highest priority on market share and innovation is not a great contributor to building market share. With Microsoft it was mostly about bundling and the drag-along of monopoly power.
Arrogance is the Curse
In The Prince, Machievelli advised famously; “Never wound an enemy, except fatally.”
Bill Gates should have read the book and he would have known never to give Apple breathing space. By the late 1990s Microsoft must have thought it was bullet proof. It had laid the Netscape threat to rest and, even though it faced anti-trust action, it was sweeping all competition away in every direction. Sun (JAVA), IBM, Oracle (ORCL) and Novell (NOVL) all seemed to be on the run from Microsoft.
Wintel reigned supreme and Microsoft was swimming in its own Kool-Aid. And that’s when Bill Gates put to rest the long running dispute with Apple, over Microsoft Windows infringement of Apple patents. Microsoft invested $150 million in Apple and agreed to develop and ship future versions of Microsoft Office, Internet Explorer, and development tools for the Mac. The announcement was made jointly by Bill (via satellite) and the newly appointed Steve Jobs at Macworld Expo.
At that time both the world and Microsoft regarded Apple as a basket case. A couple of years later, Apple was selling its iMac in 5 different colors and its marketing messages were beginning to resound a little.
Bill Gates remarked, mockingly; “The one thing Apple’s providing now is leadership in colors. It won’t take long for us to catch up with that.”
Well a decade has passed, and the whole of the PC industry still hasn’t caught up with the Apple’s design leadership. There’s no guaranteeing that it ever will. Microsoft should have strangled Apple when it had the chance, but Bill probably thought Apple was dying anyway. The boot is now on the other foot. Microsoft is the wounded animal, not Apple.
In the aftermath of Microsoft’s decline, commentators will argue about whether Steve Ballmer was the architect of Microsoft’s misfortunes or whether the rot had set in long before his CEO tenure began. It will be a subject worthy of debate, but the latter theory is more compelling. Corporate culture was the problem – or should I say – it is the problem.
Playing Catch-up
Apple has left Microsoft in the dust in so many ways. Up to now Microsoft’s competitive strategy has been all “me too.” Nice interface on OS X, well “me too” with Vista. Nice music store with iTunes, well “me too” with MSN Music. Good business with the iPod, well “me too” with Zune. Impressive Apple Stores, well “me too.” (See The “Bootleg Apple” Strategy and Why It Will Fail).
Microsoft has finally realized that the second mover is always a move behind. It’s an advantage when you’re playing Monopoly and you’ve got your hotels on all the pricey locations, but in the game of technology leadership it’s a huge negative. There’s no evidence that Microsoft has the wherewithal to react quickly any more. When you need to change direction quickly, momentum is not an advantage – it becomes inertia. That’s what has happened to Microsoft. It still has momentum, but that now hinders it.
Innovation is the key to Microsoft recovering and at last it’s starting to perform, even though it’s very late in the game. Particularly impressive is the new X-Box “virtual reality” interface it is set to deliver. It’s real and it’s groundbreaking and it’s a pity it’s only a sideshow – like the X-Box itself. Microsoft can do this and when it does, it is a force to be reckoned with, but Microsoft has wasted years watching its foes grow stronger. So it's probably too little too late.
Look Out! There’s A Monster Coming
What Microsoft really suffers from in its competition with Apple: It has no phone platform worth talking about. If anything, it’s RIM (RIMM) and Palm (PALM) that compete with Apple in this market, and they have their work cut out (see The iPhone and the Smartphone Market). Nokia may be a strong player in the smartphone game – it certainly used to be. Google is now suddenly there and attracting attention. But Microsoft is nowhere. Its smartphone strategy was lame from the start - and now it just hobbles along.
Think back. Microsoft stormed into the computer business and began to eat into the computer industry from below: smaller devices, low entry costs, cheaper software, larger numbers and great margins. That surge was irresistible and it carved out a huge market share as a consequence. Well it’s happening again. But this time the industry being eaten from beneath is the PC industry and right now the vendor that is carving out the territory is Apple – soon to be joined by Google.
The coup de grâce here will be the Apple tablet. See There’s Another Apple Revolution Coming for the full details, but the skinny is this. The new Apple tablet will be a big bad iPhone. It will start to consume the laptop market from the get go. It will be what the Netbook should have been, but never was.
Apple now has 90 percent of the high-end PC market. It has slaughtered the competition in that area. But Ballmer thinks that’s unimportant, because it’s low volume. Well take a look at the iPhone's grip on the hearts and minds of consumers and watch what happens to the Apple tablet, Mr. Ballmer. It won’t be low volume. Apple is coming at you from both directions and you’re caught in the sandwich.
A new market is about to emerge. Microsoft could have been there and should have been there, but it got complacent – and now it’s nowhere.
Arrogance is the curse.
Disclosure: Long Apple, no position in Microsoft or Google
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This article has 88 comments:
Another irony is that even though they had successfully killed Netscape, it got them in trouble with the government to really start looking into their monopolistic practice. On top of that, Netscape decided to publish their browser's source code in the open source which ultimately turned into today's Firefox. And Firefox is now solidly chewing away at the Internet Explorer's pie. Its like to dead to coming back to haunt Microsoft in a really, really big way. I am sure in hindsight, they wish that they had never decided to be so aggressive with Netscape in the first place. :)
Yeah, tell that to Sony...
A great way to put it.
What a life saver!!! Apple is everything MSFT is not. The iPhone?????? don't get me started that is the sword through the weak heart of Windows Mobile and MSFT's future, Yeeeh!!!!! What a POS that software is when I have checked out my friend's mobile Windoze phones. Typical MSFT!!!!! By By Mr. Softie don't let the door hit you in the rear as you fade into tech history!!! Atari/Commodore/Sun/soon: Microjunk
Apple's win of 90% of the high-end market has little to do with any Mac user installing Windows on their Macs. As a MBP owner, I don't have Windows installed, nor do any of my peers/colleagues that own MB's or MBP's. While we don't speak for all MBP owners, my empirical observation suggests that the value we get from the hardware/software tandem is the reason why you see Apple with 90% of that market.
You are absolutely right, st3ve, when you mention that Apple is getting dinged on the AppStore's approval/rejection process, and deservedly so. It's probably going to get them a little more heat from the FCC, and your observation regarding the Google relationship is spot-on.
However, I think you miss the point of the Mac/PC commercials. It's not about corporate culture, it's about the user experience. To be fair, would Mac's be more succeptible to viruses given a much larger market share? Yes. But doesn't it matter that OS X is written on a unix kernel? Nope.
But it is what it is.....Mac/PC commercials do point out dramatic differences in the user experience. They do it in a marketing kind of way, which they're entitled to do. But the situations pointed out in the commercials are not in dispute. Driver issues (Vista), boot times, complex OS tasks, upgrades/downgrades, etc. These issues really don't exist in the Mac universe.
At the end of the day, not having those issues was worth me spending over $1,000 for a laptop that I'll still be typing away on 4+ years down the road. That's value I can identify! :)
Peace,
Mario
Apple has won the hearts and minds of the youth because their stuff JUST WORKS!! That is PRICELESS when it comes to marketing.
PC's are stodgy yesterday computers with an OS to prove it. Win 7 will be a disaster too. Keep painting that rosy picture for yourselves softy naysayers...... MSFT's days are numbered. MSFT will not cease to exist however. MSFT will be near to irrelevant in 10+ years. MSFT makes third rate products @ best. MSFT was lucky and greedy. Steve Jobs is NOT about the money.. His mission is to put to rest once and for all that Apple is a company built on great products and a vision no other tech company on the planet has come close to matching. Not even Sony.
Remember Origami???? Well that was a crash and burn like Zune!!!
If Apple does in fact release a tablet its GAME OVER!!!
Yeah keep laughing naysayers.... You all laughed @ iPod 2001!!!
It's too expensive, its this its that.. Yadda Yadda YADDA!! GMAFB!!
You All denied iPhone 2007!!!!! The numbers speak 4 themselves.
The Apple App Store blind sided the competition. They are running around like Moe, Larry and Curly (Mr. Monkey BOY!!) included.
I can hear it now well yeah!! MSFT thought of the tablet Origami FIRST!!! yadda yadda yada.. WELL MSFT's products SUCK!! and Origami and Zune are just 2 examples of the third rate crap that Microdog turns out. I'm done with the shortsighted mindset of the PC MSFT camp. You can have you fearless leader monkey boy he is ALL YOURS!! enjoy the demise.
Some people You Just Can't REACH!!
MSFT gets the Governemt to do a "cash for clunkers" progarm. All Windows system older that a few days qualify. Look what it's done for Ford.
The Apple Tax: A dollar a day
The Apple Pax: Priceless.
Some things are priceless. For everything else, there’s Windows. (A dolor a day.)
Windows has 95% of the global market
Apple has a little less than 4%.
THese are simply the facts , all of the big market watchers agree with these numbers.
(prove me wrong with a link to CURRENT global stats, and no silly metrics from fan sites. ).
Now sorry I know you apple fanboys get all cranky when someone posts the FACTS, but remember most people on the planet dont even know apple exists.
windows is deeply entrenched , and is only getting deeper, Azure xbox win7 office servers all look great.
One of the best articles I've read here.
On Aug 13 01:00 PM jack dee wrote:
>
>
> Windows has 95% of the global market
>
> Apple has a little less than 4%.
>
> THese are simply the facts , all of the big market watchers agree
> with these numbers.
>
> (prove me wrong with a link to CURRENT global stats, and no silly
> metrics from fan sites. ).
>
>
> Now sorry I know you apple fanboys get all cranky when someone posts
> the FACTS, but remember most people on the planet dont even know
> apple exists.
>
> windows is deeply entrenched , and is only getting deeper, Azure
> xbox win7 office servers all look great.
Just touting PC OS market share doesn't help. It's old news and it had no effect on the bottom line of either companies for a long time.
With Microsoft (especially in recent history), their response has been "just you wait with what we have coming". That used to work well when Microsoft's monopoly was strong. It's famously characterize as FUD from Microsoft to slow down competition when they are behind in a market they wanted to break into. Now that competition is strong for Microsoft (a sign their OS monopoly leverage is becoming irrelevant), this message is empty. Until Microsoft can plan, execute and lead in the industry, they will have a tough time staving off these competitors.
The game has changed. Growth is in new markets such as mobile computing and digital content distribution. Microsoft needs to look on how they can claim a significant presence in new markets such as this one.
Microsoft is not a technology company. It's primary skill is not in the design of software, neither is it in marketing said (crappy) software. Microsoft's primary skill is in the acquisition, perpetuation and extension of monopoly power through shrewd contracting, timely acquisition of crucial products and technologies, and downright coercion. That they are in the software business is an accident of history. Software just proved to be, at that moment in history, the industry most conducive to monopolization. A century ago, the perch held by Microsoft as the hegemonistic monopolist was held by Standard Oil.
And like Standard Oil, Microsoft's monopoly will persist only if the feds look the other way and let them get away with illegal acts.
It is notable that in Robin's entire post he fails to back up his viewpoint that MSFT is losing market share?
Perhaps robin could only find limited data sets confined to the US market?
Or perhaps he reviewed trends and found the many suggest the true installed base for MSFT is closer to 99%. ( MSFT would rather not state this as the EU are already all over them)
anyone provide a link to current global data? prove I am wrong; and that apple has displaced MSFT in the worldwide market? Otherwise its just hot air.
Robin please this is simply not true and you must know it.
That stat is based on domestic RETAIL B&M , and we all know that most machines are not retail. And most machines that are retail are sold in B&M. And that apple sells much of its machines retail through B&M.
its a silly stat ,
" MSFT gets the Governemt to do a "cash for clunkers" progarm. All
> Windows system older that a few days qualify..."
Interesting idea; but I think Apple should ask the government for this program and not MSFT. The "Cash for Clunkers" program helped save US oil consumption and reduces oil dependency in the automotive market. Apple could get government to do the "cash for clunkers" to replace people's Windows PC with a new Mac and reclaim millions of hours of lost productivity due to viruses and crashes on their computer. There could be something there. :)
Apple's presence in bricks & mortar retail isn't any greater than the other manufacturers, and it's online sales are probably stronger than everyone but Dell. If anything Apple's numbers might look even better if you include online retail. (If you include computers sold to enterprise, no doubt Apple's numbers will look worse -- but how many corporations are paying more than $1000/box these days?).
you really mean that? Have you priced a thinkpad, 6580, most if not all laptops used by corps are over $1000. Why on earth would you think otherwise? Do you think Large companies are issuing low spec laptops with little support?
@ Wisdom vs. Information, exactly.
If Microsoft had innovated and focused their development in the right areas (a usable and stable OS, a competitive mobile OS, truly advancing the Office suite), instead of chasing money-losing ventures with me-too products (search, Xbox, Zune, Silverlight, UMPC, Home Server, Surface / table computing, Bing Maps, MSN, etc, etc, etc.) they wouldn't be in this mess.
Look at the retail price of your average "enterprise" tower at dell.com, or hp.com. Maybe $850? And that's retail. No doubt you're paying less than that if you buy them by the ten-thousand.
On Aug 13 11:36 AM mertwoods wrote:
> Silly article which tends to look at Microsoft through the typical
> Apple prism. Contrary to this view, computer land doesn't revolve
> around Apple.
Yeah Im sure thats what the music industry was saying too. Not mention the TV industry. Love the way NBC came, tail tucked-in, back to itunes.
> Microsoft Windows users are waiting for the next generation
> MS OS.
Don't you mean the next generation MS-DOS?
> They have been holding back for months. They've been listening
> to word of mouth from beta users. I've asked myself why buy another
> Vista machine/system? We need a new PC, but Vista isn't as elegant
> as XP.
Yeah elegance is the only problem with Vista ... got it thanks.
> Window users are simply waiting. MSFT knows this. Windows
> users talk about this. PC manufacturers know all about this, too,
> with some companies like Dell offering a free upgrade from Vista
> when the new OS comes out. The MSFT story is simple. Buyers are waiting,
> and while some will switch to Apple, others won't because they have
> too much equity in other software and peripherals. Apple is a fine
> company. But Apple and Mr. Softy are different and their customer
> franchises are different. There is a place for both of them. Neither
> revolves around the other.
Soon MS wont be revolving around anyone .... they deserve it for all the unfair practices. Not mention the delusional bluster...Ballmer out know market share doesnt mean squat when you make squat on each unit. I mean just look at GM and company.
I'm not so sure market share is what you should be looking at, especially as an investor. Apple is closing in on Microsoft financially. Let's take a look at operating income.
Per Google Finance:
in 2006 MSFT's operating Income was 6.5 times greater than AAPL's.
In 2007 MSFT's Operating Income was 4.6 times greater than AAPL's
In 2008 it was only 3.5 times greater
Their fiscal year seems to be about 3 months different, so Apple hasn't reported 2009 numbers yet. MSFT has and it fell about 9% YOY.
As you say, if Apple has only 1-2% market share, imagine what kind of dough it will be pulling in with 8-10% share....
Argosy
Anyway, if Windows 7 doesn't totally suck, then companies and consumers will definitely be upgrading over the next year and Microsoft will be still sitting pretty with at least 89% of market share. It's a given. It's just the easiest route for Windows users to follow. Every new computer, as usual, will have a nice copy of Windows 7 on it and MS will just sit back and collect loads of money. I hardly call that a collapse of Microsoft. Arrogant or not, there is nothing that can topple Microsoft without crippling the whole computer industry.
But what if people could buy an Apple to replace your PC laptop for $600 - $800? Would that change things? Apple is now seen as a premium option by most consumers. It's just that the vast majority of mainstream consumers won't pay more than $1000 for any computer, no matter who it comes from. If this rumored Apple tablet provides what most people want in a mobile computer, and is available in that price range, Apple could capture a large slice of the mainstream PC laptop market, without cannibalizing their MacBook Pro line.
Notice how Apple has only had an older "placeholder" product in the MacBook (versus MacBook Pro) product line? They've been planning something big for a long time.
That's a well-run business. Growing out from a strong core, instead of flitting around.
Now it is just long winded posts about only shill would like MSFT products
Like Microsoft products = Must be a shill
Like Apple products = Just an enlighted human being.
Almost nowhere does Robin back up his thoughts with facts, he simply states something and then restates it as if proven. This is classic internet blogging at its worst.
Robin clearly states MSFT has lost market share, but he does not state where when how much, because to do so would show how weak his entire post is.
The facts are simple and unchanging apart from growth in the USA (apple stronghold for decades) and mild growth in the EU; Apple has failed to increase market share in the PC market.
Microsoft continues to be the system of choosen by billions around the globe.
95% matters mostly because the apple drones have spent most of this year banging on about msft market share loss...
l
Yes, MSFT's worldwide unit share is high but I'll suggest that outside the US and Europe a high number of those units are illegal copies that provide little or no revenue to MS.
In China MSFT has cut its prices to the bone to try to compete with piracy. No revenue growth there.
Now MSFT is coming out with free, web versions of Office. Where is the future revenue stream in that? Will they try to support it with ads? How annoying will that be?
This is the danger for MSFT. They have a history of leveraging Windows to force people to use their formats. For example, they forced the use of IE in windows which forced web developers to code for IE instead of open standards. In business you have to have Office because everyone else uses it. If the world decides to change directions and switch to web based/cloud type apps that are almost free, or if they decide to go in the direction of the iPhone/BB/Android, then MSFT is starting from a position of being an also ran and outsider. They'll have a hard time using windows to force people to buy into their proprietary formats if the world decides they don't need windows. If MSFT is not forcing standards then they cannot force people to give them money.
It doesn't mean MSFT will disappear. They have a lot of momentum and there may be a core business in MSFT at much less than their current size. But if they enter a long period of slow revenue decline that will kill the stock. How do you value the stock if you expect revenue to decrease 1% or 2% or 3% a year for the foreseeable future? How do you attract bright people when their stock options are worthless?
Disclosure: Long AAPL, not an analyst, just a guy.
Apple makes its money selling hardware. The software is thrown in as a freebie to make those hardware sales. It's true Apple makes compelling software, but relatively little of its income comes from software sales.
imac, ibook will always be a niche market - only for die-hard apple fans. the rest of the world don't give a damn about how wonderful imac or ibook or mac os is. imac ibook and mac os are too expensive and they are NOT opensource.
the real challenge to microsoft is free and almost free opensourse software. the current generation may be too dumb to switch to opensource. but the next generation of computer users (toddlers now) will have no problem using linux, freebsd, and other opensource software.
You guys can keep your market share, I prefer the company stock price to keep going up like Apple.
Apple's challenge will be to come-up with another one after Jobs. I am not sure that is easily done. The candidates Jobs has been giving us lack lustre. If we lose SJ, Apple may have a few years of fumes to run-on. It may be troubling times again at the apple corps.
MSFT is going be dominate for longer than most of us will be around. If you already own $10,000 worth of licensed Windows software, why would you invest an additional $10 to 20k to get the same exact software on a more expensive and non-world-compatible OS?
On Aug 13 11:36 AM mertwoods wrote:
> Silly article which tends to look at Microsoft through the typical
> Apple prism. Contrary to this view, computer land doesn't revolve
> around Apple. Microsoft Windows users are waiting for the next generation
> MS OS. They have been holding back for months. They've been listening
> to word of mouth from beta users. I've asked myself why buy another
> Vista machine/system? We need a new PC, but Vista isn't as elegant
> as XP. Window users are simply waiting. MSFT knows this. Windows
> users talk about this. PC manufacturers know all about this, too,
> with some companies like Dell offering a free upgrade from Vista
> when the new OS comes out. The MSFT story is simple. Buyers are waiting,
> and while some will switch to Apple, others won't because they have
> too much equity in other software and peripherals. Apple is a fine
> company. But Apple and Mr. Softy are different and their customer
> franchises are different. There is a place for both of them. Neither
> revolves around the other.
How would Microsoft have "crushed" Apple in the late '90s? The belief that they could have is as preposterous as the belief that Microsoft is doomed because they *ONLY* earned $14.5 billion in their last fiscal year. (Which also happens to be the year before their prime new product, Windows 7 is to be released.)
I actually agree that Microsoft's advantages are withering away, but the article sounds more like an advertisement for Apple's stock than a realistic critique of Microsoft. Only problem is that Apple may have some issues of their own heading into the future.
For one, that 'high-end laptop' market the author claims they control 90% of is mostly 'high end' only because consumers have been willing to pay a premium for the trendy Apple brand over the past several years. Those high margins might start to wither away soon, as well, as consumers decide that paying more money for the same computing power isn't all that wise.
It's true that Apple has done well with the iPhone and all that sorta stuff, but if there's one thing I know about consumer electronics in America, it's that trends come and go. Apple has been trendy, but that wears off after awhile. I'm not saying that Apple is in trouble or even that their stock is a bad investment (I don't analyze it closely enough to have an opinion). All I'm saying is that the author's implied contention that Apple is going to crush Microsoft is ludicrous.
Microsoft has more to fear from Google and open source than it does from Apple. And Apple is not necessarily any more safe than MSFT on that front.
As a monopolist, the greatest threat to Microsoft has never been competition-- its been antitrust. In maintaining Apple as a viable competitor, Microsoft put itself on far better ground with respect to the DOJ. Remember, it was an endless anti-trust lawsuit that nearly brought IBM to its knees . . . Microsoft "immunized" themselves from many of the anti-trust challenges precisely because Apple offered a choice, but ideally for Microsoft, it was a "niche" choice that not many of its customers would switch to.
This has allowed Microsoft to enjoy monopoly profits for many years, and that's a huge win in business terms. No monopoly lasts forever, but Microsoft's skillful strategy has clearly allowed them to enjoy it for a very long time.
in the graveyard.
Let's look at PROFIT SHARE, instead of marketshare. Or don't
companies still get rewarded the old-fashioned way: via profits?
Suddenly Apple looks way better. They've got most of the high end
of the profit share pie. ...
Value is not measured in dollars. That's marketing doubespeak.
Dollars are a poor substitute for real value.
But you're right -- Windows PCs should be deeply entrenched.
And are being -- courtesy of Apple -- with a shovel called OS X.
The dinosaurs might have scoffed at the marketshare of the first
mammals -- but just remember who got the last laugh.
If you think "most people on the planet" haven't heard of Apple,
then you may not have heard of the iPod or iPhone yourself yet.
What most of the people on the planet probably haven't heard of,
are the Zune and the Microsoft Smart Phone (oxymoron alert).
Windows itself peaked a decade ago, when XP was released.
I have seen the future -- and it ain't Windows. No way. No how,
Sunny Guy
On Aug 13 01:00 PM jack dee wrote:
>
>
> Windows has 95% of the global market
>
> Apple has a little less than 4%.
>
> THese are simply the facts , all of the big market watchers agree
> with these numbers.
>
> (prove me wrong with a link to CURRENT global stats, and no silly
> metrics from fan sites. ).
>
>
> Now sorry I know you apple fanboys get all cranky when someone posts
> the FACTS, but remember most people on the planet dont even know
> apple exists.
>
> windows is deeply entrenched , and is only getting deeper, Azure
> xbox win7 office servers all look great.
The future is "the cloud" & it will impact Apple more than it will impact Microsoft. As people migrate to cloud driven apps, who needs the funky hardware any more ?
1) At any time, Apple could focus on offering an enterprise solution, which could be as market altering as their entry into the music or phone markets. They currently are not focused on that.
2) At any time, Apple could release OS X for all PCs, making Windows dominance because of its default placement on PCs highly disruptable.
Nokia owned half the market for smartphones five years ago and it still does. Like RIM with its 20% share, it's not really the sexiest brand out there but it keeps chucking out dozens of smartphones that sell quite well. Apple, Windows Mobile (through Samsung/Sony/LG/HTC) and Android are largely competing for the remaining 30% of the market. Palm is toast - big fanfare about the release of WebOS but have you ever seen a user?
Over 5 years, from week of Aug 14, 2004 to yesterday (Aug 13):
MSFT: 27.20 -> 23.62, DOWN 13%
DJIA: 10,110.13 -> 9398.19, DOWN 17%
S&P: 1098.30 -> 1012.73, DOWN 17.8%
NASDAQ: 1838.02 -> 2009.35, UP 9.3%
and ...
AAPL: 15.40 -> 168.42, UP 994%
Look at the last year, which hasn't been good for almost anyone:
MSFT: 27.91 -> 23.62, DOWN 15.4%
DJIA: 11,615.92 -> 9398.19, DOWN 19%
S&P: 1292.93 -> 1012.73, DOWN 21.7%
AAPL: 179.32 -> 168.42, DOWN 6%
Does it say something that the market apparently thinks that MSFT is heading downhill, faster than the overall market, while Apple isn't? Even at Apple's 1 year low, it was $80.49, up 422% since 2004.
Weve heard Mac's are taking over for years - Mac OS is better so Aple dumped it for Next's OS (owned by steve Jobs)
Power PC is Better - Dumped for Intel
Only APPLE software policy - Dumped for the Apps Store.
And now they are way behind in 64 bit arena -
If it wasn't for Adobe software & the I Phone, Apple wouldn't even have the 4% they keep claiming is growing.
Part of the reason they sell as many pc's as they do is their users replace the MORE frequently - also part of the reason the get fewer complaints.
The one potential problem for Apple is product saturation, but they have swiftly addressed the iPod's age by including the Apps store for iTouches. As expectations continue to skyrocket for Apple, the little changes in OS or revamps of products will not satiate consumers. May their corporate vision continue to flourish.
Since this is a stock page, it's easy to see that Apple is a better long term investment than Microsoft because it has not only a great reputation, but in 'tech land', fast but good innovation rules the day, all other factors being equal. John Galt would have used a Mac. Quality counts.
Long APPL
On Aug 13 06:11 PM jack dee wrote:
> The Market share stats got revised and all of a sudden the same kids
> who were banging on microsoft dipping under 90% have nothing to
> say !
>
> Now it is just long winded posts about only shill would like MSFT
> products
>
>
> Like Microsoft products = Must be a shill
> Like Apple products = Just an enlighted human being.
In my opinion, what I have read is "peanuts": he says momentum impedes change of direction. That's not true; simply check on the Einstein's Theory of the General Relativity (plus how much one should have to pay to purchase either Microsoft or Apple)
+ Clouding the issue: Apple has a large community of "religious" (as in worship at the altar of Apple) supporters. This is great for sales at the margins of the market. It's actually a bit of a hindrance at the corporate purchasing level, as this sort of enthusiasm is looked at with disdain. (Yes, this is short sighted but its generally the case.)
+ You can bet that if Apple was meaningfully penetrating corporate sales, Balmer would be circling the lawyers and hiring 10,000 monkeys to pound out "something" new and probably trying to buy Dubai and/or Apple just to cover his flank. Don't see that.
+ Most underrated marketing executive in the universe: David Moody. Dunno who he is? Of course not. He lives in the shadow of Steve J. but drives all A computer marketing world wide. All that, AND he's a great guy. As long as he's got something 1/2 to 3/4 decent to position, he will kill the market.
+ Finally, software geeks everywhere should take note of the fact that the first true "killer" app that 1) saves or makes money 2) that ties iWhatever to A OS and/or app while not being a 1/10 as cool running under Windows, will actually shift technology's "tech"tonic plates...and make a lot of people a lot of money.
There are lots of myths surrounding Apple and they do market well to those who have more money than sense. And I think competition is good.
Microsoft will have problems in the future as more companies switch to open source office apps and will have to change its strategies. It may now be too big to be nimble and quick to respond to changing needs, and I suspect its glory days of high growth are behind it. But it will continue to the the dominant player in the desktop/laptop software and OS world for a while yet.
> In MSFT's mind yes, should have stamped out Apple when they have
> had the chance.
As a matter of fact, Microsoft did not have a chance to stamp out Apple. Google "San Francisco Canyon Company". There's this little something about Microsoft using Apple's source code from QuickTime without permission in Video For Windows which gave Apple all the leverage it needed to neuter Microsoft's "stamp out" ability.
On Aug 14 12:36 PM BRICLayer wrote:
> … and probably trying to buy Dubai and/or Apple just to cover his flank. Don't see that.
I don't see that either. Have you seen how much cash Microsoft has vs Apple's Market Cap? They'll need at least another $118 billion to cover Market Cap of $148 billion today. Kinda hard to believe Apple's Market Cap is over 70% of Microsoft's own Market Cap. 2 years ago it was roughly 50%.
People don't care to change OS once something works, like XP. People are fed up with radically changing UI, they just want to use the tool to get the job done. Computers are no longer novel or an end in themselves. In the long run, most people just want their car to start every morning.
Hardware continues to become cheaper and as a result, people buy more of it. Computers are becoming the new multi-purpose calculators. Thirty-five years ago, a simple calculator cost the same as a netbook today. Paying $500 a pop for software for each unit is no longer viable. There is a lot of downward pressure on MS to reduce prices and to produce better quality outcomes with less frequent releases. MS has passed peak oil. They will downsize to meet demand, rather lack of demand. Cloud computing, if it takes off, will require the giving away of software and selling space. MS is now going give away Office online to see if it can become an ASP with a monthly fee. No one is going to pay a fee for each owned unit so there will be another revenue hit. There is nothing that Balmer can do, nor can anyone else.
Both are mature, cash cows. The personal/enterprise computer market is no longer a growth market. Growth can only come by adding new users, and in a mature market this can only come from finding new uses for a product. New uses are things like net books, PDA’s and cell phones and here they are falling behind. If one is to measure market share of an OS one must include net books, PDA’s, and cell phones.
In a mature market sales are generated from the replacement market. The drive to replace a Windows OS because a new one can do a lot more and better are past. Windows XP does most everything that most users want. Its major deficiencies are reliability, security and speed, and Microsoft has not done a good job of improving these.
Net books are eating away at the traditional computer market. Their prices are low and MS cannot get the same price selling into this market that they get in the laptop market. Indeed, they are under pressure to reduce their OS price to computer manufacturers in general because they are reducing costs for all of their components to stay alive, and the worst is yet to come.
Apple is eating Microsoft’s lunch in the smart phone area. They are doing to smart phones what they did to personal music devices.
Enterprise software is likewise a mature market. There is no compelling reason on the part of most users to upgrade their software; MS Office is actually very good, but is beginning to suffer from bloat and adding more marginal features won’t help. Because it is overkill for so many users it is being challenged by cheaper, pretty good software and faces the future challenge of cloud computing.
Large mature companies often structure themselves in a way which makes it difficult for them and their employees to Think Out Of The Box. Apple clearly can and does. Microsoft must make major changes if they are going to survive. Me too won’t cut it.
(2) Releasing OS X for "PCs" (i.e. IBM-compatible machines) would actually undermine Apple's business model for computers. The main advantage of Apple computers is that the software and hardware is manufactured by the same computer, which doesn't create the issues that Microsoft has to deal with. Why would Apple want to release their software to "PCs" and give away a competitive advantage? Moreover, why would anyone purchase OS X for a PC?
Linux-based operating systems pose more of a threat to Windows than Apple OS X.
On Aug 14 08:41 AM User 332757 wrote:
> Apple has two current advantages over Microsoft that should make
> any Microsoft stockholder shudder:
> 1) At any time, Apple could focus on offering an enterprise solution,
> which could be as market altering as their entry into the music or
> phone markets. They currently are not focused on that.
> 2) At any time, Apple could release OS X for all PCs, making Windows
> dominance because of its default placement on PCs highly disruptable.
<The main
> advantage of Apple computers is that the software and hardware is
> manufactured by the same computer, which doesn't create the issues
> that Microsoft has to deal with.
2 things to ponder, 1st - how much stuff done on the computer today happens outside of a web browser - very little. Whatever can't can be done on some other device - or a not so sophisticated web version exists. Say document editing, presentations, publishing, design, etc. for 90% of windows users, They needed Windows because windows guaranteed to run such a huge slew of programs with exceptional ease of installation and low learning curve.
Apple's recent Snow Leopard OS and its upcoming Tablet may change the game, if it gurantees easy installation and large numbers of applications (like the iPhone - iPod touch does) and provides programmers and developers with rock solid framework for developing apps.
Coupled with a good OS, good hardware, good Browser - Microsoft will suddenly lose its edge. As for business use, if the web pushes out all business apps out of the desktop and into the browser, that will save companies huge amounts of infrastructure costs - enticing them to switch.
Like in the early 90s when Apple almost died, Microsoft's death wont be overnight, it will be slow and painful - and yes it will happen. (If you are reading this comment in Firefox and not IE, I think you will know)
On Aug 13 11:36 AM mertwoods wrote:
> Silly article which tends to look at Microsoft through the typical
> Apple prism. Contrary to this view, computer land doesn't revolve
> around Apple. Microsoft Windows users are waiting for the next generation
> MS OS. They have been holding back for months. They've been listening
> to word of mouth from beta users. I've asked myself why buy another
> Vista machine/system? We need a new PC, but Vista isn't as elegant
> as XP. Window users are simply waiting. MSFT knows this. Windows
> users talk about this. PC manufacturers know all about this, too,
> with some companies like Dell offering a free upgrade from Vista
> when the new OS comes out. The MSFT story is simple. Buyers are waiting,
> and while some will switch to Apple, others won't because they have
> too much equity in other software and peripherals. Apple is a fine
> company. But Apple and Mr. Softy are different and their customer
> franchises are different. There is a place for both of them. Neither
> revolves around the other.
On Aug 13 10:57 AM User 199 wrote:
> "But it’s no longer good at competing outside its monopolistic domain."
>
>
> Yeah, tell that to Sony...
Some people are waiting for Win 7. But, even so, the writing on the wall is clear. Win 7 just gets people back to about an XP level of performance/usability, and Win XP was a pretty lame excuse for an operating system. In 10 years, Windows will still be around, but in the same way you could probably find occasional pockets of OS/2 cultists in the late 1990's.
As a software company, Microsoft's incremental cost of selling 1 more Win7 license is nil. And they will sell hundreds of millions to their core customers - PC manufacturers and corporate clients. Sure, Apple will sell a relatively small number of high priced (and high cost) machines to enthusiastic consumers. Heck, they may even gain some market share. But Windows dominance is pretty well locked in for Microsoft's main customers. It is a cash cow MS will continue to milk. Not as elegant as pushing out nifty i-phones and touch-tablets, but a solid business for many years to come, despite the protestations (and desires) such as those of the author who lamely, consider only one side of this equation.
Since 2001, how many fantastically popular ipods has Apple sold?
Since 2007, how many versions of "crappy" Vista has Microsoft sold?
Google it and you will likely be surprised at the answer.
On Aug 13 11:36 AM mertwoods wrote:
> Silly article which tends to look at Microsoft through the typical
> Apple prism. Contrary to this view, computer land doesn't revolve
> around Apple. Microsoft Windows users are waiting for the next generation
> MS OS. They have been holding back for months. They've been listening
> to word of mouth from beta users. I've asked myself why buy another
> Vista machine/system? We need a new PC, but Vista isn't as elegant
> as XP. Window users are simply waiting. MSFT knows this. Windows
> users talk about this. PC manufacturers know all about this, too,
> with some companies like Dell offering a free upgrade from Vista
> when the new OS comes out. The MSFT story is simple. Buyers are waiting,
> and while some will switch to Apple, others won't because they have
> too much equity in other software and peripherals. Apple is a fine
> company. But Apple and Mr. Softy are different and their customer
> franchises are different. There is a place for both of them. Neither
> revolves around the other.
If I need a totally new system for a particular use, Yes, I'd go with Apple.
What many posters on here fail to realize is that the majority of buyers are not looking for the very best they can get. They want something that does the job (most of the time) and at a cheap price. Apple does not fit that description in any way.
Paying more to use the same MS spreadsheet doesn't make sense to anyone.
Sidenote: With all the excitement over the Iphone, it's interesting that my friends who own them are always borrowing my phone to make calls. What's with that?
Bob
I totaled up the lost productivity in $$$, called the company we bought the computers from and purchased Mac SE's...16MHZ. We kept them for the better part of a decade.
We all run iMac's now.
I had occasion to need to run a Windows based program recently at the office. At home I run it on my powerbook pro using VMW simulation. So, I'm at the office trying to set up the program...hours of wasted time.
MS will continue to shrink in size. Give 100 people a Mac and a PC. Ask them how the emotionally feel about the products. Remember folks we are not rational we are emotional when it comes to decision making. People will say they love the Mac. They will not use the word love with a PC.
Oh, you don't think your decisions arte emotionally based? Let's see. So you think the biggest decisions of your life are rational. Let's list them and see: Falling in love, staying with a relationship, getting married, having children, how you feel about your family and how they effect your life, the profession you choose if your profession suits you, whether you love your profession, your house, your car....let me go on.
The import to investing? Forces within you that you likely do not understand will determine if you make and keep money or not.
Best,
G
On Aug 13 11:16 AM never going back wrote:
> I remember my first day on a the "real" job I got back in 1995.
> The firm had just bought "locally built" PENTIUM!!! PC's pre loaded
> with Win 95. They did not work the day I walked in and two out of
> three didn't even boot up properly. The local company who sold/built
> the computers was upset and repeatedly sent out their techs to fix
> these towers of trouble. 4 weeks later!!! and 5-7 visits we could
> boot up and print. After many years of crashes and troubles, including
> the IE browser upgrade that infected the network. Windows thought
> it was installing a virus!!!! That was over $2,000 to fix with one
> of our helpful techs (not that helpful) always the complaints were
> of Windows but they all still drank the koolaid. XP might have
> been the best product but it was boring, not as fast as it could
> have been, and very susceptible to virus' the more you surfed online
> (a growing trend then). Why was the whole world stuck in PINTO
> mode for their PC's I always wondered? I have never liked MSFT's
> junk and I finally switched over once Apple switched to Intel hardware
> (like many I was always checking dumbed down PC specs vs. Mac's and
> it was then that I knew Apple was finally a buy for my house computing
> needs and my portfolio's needs ;)
>
> What a life saver!!! Apple is everything MSFT is not. The iPhone??????
> don't get me started that is the sword through the weak heart of
> Windows Mobile and MSFT's future, Yeeeh!!!!! What a POS that software
> is when I have checked out my friend's mobile Windoze phones. Typical
> MSFT!!!!! By By Mr. Softie don't let the door hit you in the rear
> as you fade into tech history!!! Atari/Commodore/Sun/soon: Microjunk
How many people liked their iPods? 95% or more, my guess.
How many liked Vista? Nobody I've spoken with, but I'm sure there's a few percent out there.
On Aug 15 01:34 AM timber wrote:
> By the way - to put things in perspective regarding Microsoft's size
> and dominance, answer this question:
>
> Since 2001, how many fantastically popular ipods has Apple sold?
>
>
> Since 2007, how many versions of "crappy" Vista has Microsoft sold?
>
>
> Google it and you will likely be surprised at the answer.
The corporate market is shrinking. M & A, the recession-- all that.
Then you compare a $2000 MacBook (instead of a $1000 MacBook or a $600 Mac Mini (OK, budget $300 more for monitor and keyboard and mouse) to a $500 piece of junk PC. At that price-- and you KNOW it, you're lucky if you can buy something that will last a week before requiring some kind of tech support.
On Aug 15 01:26 AM timber wrote:
> The author seems to have ignored corporate computing. Sure, Apple
> plays well with consumers and even in some corporate environments
> (creative types) but the vast majority of corporate users worldwide
> use (even NEED) Windows. A huge number of those XP machines are
> now aging due to Vista resistance. When corporations upgrade, do
> you think they are going to pay two grand for a MacBook? Not most.
> Most will upgrade to decently spec'd $500 PCs with Windows 7 and
> be done with it. And Linux is not mature enough to deploy in a corporate
> environment with the average user.
>
> As a software company, Microsoft's incremental cost of selling 1
> more Win7 license is nil. And they will sell hundreds of millions
> to their core customers - PC manufacturers and corporate clients.
> Sure, Apple will sell a relatively small number of high priced (and
> high cost) machines to enthusiastic consumers. Heck, they may even
> gain some market share. But Windows dominance is pretty well locked
> in for Microsoft's main customers. It is a cash cow MS will continue
> to milk. Not as elegant as pushing out nifty i-phones and touch-tablets,
> but a solid business for many years to come, despite the protestations
> (and desires) such as those of the author who lamely, consider only
> one side of this equation.
TAKE IT DOWN!
fakesteveballmer.blogs...
Do you know anybody who switched from Apple to a PC?
The company would be best split up into its divisions and NEW management hired, or sold to real managers who like red meat.
The place is so incestuous that its a wonder the Board has not been indicted for encouraging lewd behavior. Gates was never approachable by anyone and his views were somehow considered the last word. Will, now they have lost "word" in an infringement case, plus 290 million. The night is dark and the wind is blowing. Hold on, but sell MSFT first.
Are all these people on this forum, who claim that Windows does not work for them, just retarded, or just long on AAPL?
Maybe both?
I just don't understand how my wife, who is just average in computer literacy, never had a single problem with PC. But people here, who claim to be tech-savy, have problems.
How retarded do you have to be to have problems with Windows (one of the world's easiest OSes to use, it's not LINUX for gods sake...everything installs easily, just plug and play!)
If anything, people who I know that use Macs tend to have more problems.
I also seriously doubt that consumers who switch from PC to Apple buy a bunch of AAPL shares along with the computer.
So, this leads me to believe that you don't know much about computers, and you're long on MSFT. And you're scared.
On Aug 15 10:06 PM Paul H. M. wrote:
> I've used Windows for 15 years without a problem.
>
> Are all these people on this forum, who claim that Windows does not
> work for them, just retarded, or just long on AAPL?
> Sidenote: With all the excitement over the Iphone, it's interesting
> that my friends who own them are always borrowing my phone to make
> calls. What's with that?
>
> Bob
> Apple has two current advantages over Microsoft that should make
> any Microsoft stockholder shudder:
> 1) At any time, Apple could focus on offering an enterprise solution,
> which could be as market altering as their entry into the music or
> phone markets. They currently are not focused on that.
> 2) At any time, Apple could release OS X for all PCs, making Windows
> dominance because of its default placement on PCs highly disruptable.
I really don't think you're right on either point, and the fact that Apple hasn't done either, and probably has no plans to, is testament to that.
1. An enterprise solution presumably means the enterprise locking itself into Apple hardware and software. As an IT manager, I have seen that from around the early 90's with firms of several hundred to maybe a couple of thousand users adopting Apple desktop. I don't think it ended happily for any of the ones I saw - in that they soon felt their upgrade / replacement / software options became too constrained as time went by.
2. OS X for all PC's ? - not without a massive effort both from Apple and many third party vendors. One of the reasons Windows is clunky compared with OS X is that it is compatible with a huge range of hardware - Vista driver issues notwithstanding ! OS X is really only compatible with Apple hardware. If you want to test that, try running OS X in a virtual environment on your PC.
Say what you like about Bill Gates, but he left MSFT with a near monopoly position for corporate desktops and a very large share of the server market (eg about 50% of all corporate Mail servers on the planet).
I'm not saying that's good forever, but it gives MSFT a massive advantage over its rivals for a while to come, even when MSFT tries to commit corporate suicide with a product like Vista.
They can still be extremely profitable despite themselves.
Adobe is vulnerable. 1) Apple already gored Adobe Premiere with Final Cut Pro. 2) Apple could KILL photoshop any time they chose to do so. 3) Apple's free "Preview" is a hundred times better than slow, buggy Adobe Reader, at least for VIEWING PDF's, and PDF is more important format even than the ubiquitous "Doc". Flash is a core Adobe product. Flash sucks up CPU cycles and is much despised on Macs and PC's. It is not even AVAILABLE on modern mobile devices (the iPhone). It is slowly being made irrelevant by HTML 5, which IS, of course, well supported in Safari.
On Aug 16 06:27 AM MikeOz wrote:
> On Aug 14 08:41 AM User 332757 wrote:
I do think that MSFT has some moves left, but they truly need to develop some strategic plans to regain market share. I do think they could have an advantage in the mobile space, but again, they need to develop a unified strategy and organize resources around it.
I disagree with the author's implication that the Apple Tablet will grab huge chunks of the PC space. One very significant factor in the decline of PC sales is the netbook. Netbook growth is exploding because the offerings are packed with features and functionality. My own loaded Dell Mini 10 was under $350. While I do think Apple will find a slice of the PC market willing to pay $900 for a Tablet, that price will probably come down over time (like the iPhone and most other devices) and it will take greater market share. However, PC prices are declining at a rapid rate to fall in line with those of netbooks. The operative words here are "over time". If Microsoft doesn't act quickly, Apple, Google, and others will continue to eat their lunch and dinner.
If I were Ballmer, I would give some serious thought to spinning off some operations into independent businesses.
Ballmer is the perfect CEO for the failing MS. Jobs is the perfect CEO for the Enigmatic Apple. Where is Fake Steve when you need him. His insights are so much more poignant and witty than most.
Microsoft is definitely on the ropes. Google will most likely astound us with a MS crusher, sooner than later. The desktop is almost fully outdated. Google will swoop in with a killer mini-OS that runs on a tablet, a phone, and an office monitor with a little CPU in it.
The hard lifting will be done in the tiny gadgets or sent to the cloud to be processed gratis by GOOG's monsterous mega stack.
People who want things to be extra nice will still pay Jobso a fat premium just to be treated nicely and have the hot shiznit on the block.
What Microsoft?
And yet, Microsoft has precisely sat around, doing nothing, er, only copying Apple's moves badly, as always.
Apple is running on the same hardware folks. There is no way they are not going to take the entire burrito from Microsloth, they are merely waiting until the proper time to pounce, just like any good tiger, leopard, or possibly, snow leopard.
Wake up, Microsoft users. It's never been worth your time using that derivative, 1/2 (baked) stuff when you can now have OS X. It's not hard to make it run on your generic hardware, to see if you like it or not. Windows is not an 'investment' and if it were you still wouldn't have to give it up. Apple makes Windows a mere program, running in a far, far better OS. That's more than windows deserves, but then you won't be using it much after awhile anyhow.
>>There is no way they are not going to take the entire burrito from Microsloth, they are merely waiting until the proper time to pounce, just like any good tiger, leopard, or possibly, snow leopard<<
Why? Two reasons: Cost. Reduce reliance upon a single vendor.
Results to date? IT budget reduced by 70% End users reporting no usability issues and greater satisfaction overall with the reliability of the new environment.
On Aug 15 01:26 AM timber wrote:
> Most will upgrade to decently spec'd $500 PCs with Windows 7 and
> be done with it. And Linux is not mature enough to deploy in a corporate
> environment with the average user.
>
> As a software company, Microsoft's incremental cost of selling 1
> more Win7 license is nil. And they will sell hundreds of millions
> to their core customers - PC manufacturers and corporate clients.