Jake Kimble's  Instablog

Within the past decade or so, Microsoft has been plagued with pushing their products into the marketplace after IT leaders such as Apple have already established market share.  Today, the Wall Street Journal stated that Microsoft is unveiling the Zune HD, undercutting the iPod Touch.  Despite a cheaper price tag and a few new features, Microsoft is late to the market once again.  To further understand Ballmer's reactive strategy, we must flaback to 2001.

On October 23, Apple releases the first version of its iPod, an innovative product that plays music downloaded (probably illegally) from the internet.  While the tech bubble was bursting, Steve Jobs was redefining Apple and ushering in innovation.  Everyone knows the rest of the story for Apple:  one innovative product after another that captivates the consumer.  But Apple's strongest attribute is its brand loyalty.

Where does Microsoft come into play?  They release their MP3 player, the Zune, on November 14, 2006.  Despite having arguably a superior product, Apple has already developed five versions of the classic iPod and two versions each of the shuffle, mini, and nano.  With Apple's dominant market share coupled with its brand loyalty, the Zune was nipping at the heals of the goliath of digital music players.

On the personal computer battlefield, Microsoft dominates with its various versions of Windows operating systems.  But Apple laptops have been quite successful with their user-friendly OS.  MSFT tried to do this with its Windows Vista that was widely regarded as a flop with many users opting to downgrade back to Windows XP.  Ask any friend with an Apple computer and they will clearly claim that they will never switch back to a standard PC.  Once again, Apple's brand loyalty has had a cult-like following.  It remains to be seen if Windows 7 will be as successful as analysts are anticipating.

Apple was the first company to develop a touchscreen smartphone, with other players showing up late: Research in Motion's BlackBerry Storm and more recently Palm with its Pre.  In late 2008, Microsoft was rumored to be developing a smartphone deemed the "Pink", an extension of the Zune.  The Pink will combine the Zune and technology from MSFT's acquisition of Danger Inc., the company that brought the popular Sidekick phone from T-mobile.

Microsoft has been struggling to gain significant market share in the online search business as Windows Live search did not compare to Google.  However, as of late, Bing has become a more popular buzz word and successful search engine.  But let's be honest, the word Google is a household word.  For instance, when your children ask what the difference is between skim and 2% milk, you will respond with "I'm not sure, let's google it."

To dethrone Apple, IT companies must not only be innovative, but they must beat Steve Jobs to the marketplace.  Once again, MSFT's reactive strategy has it entering consumer markets where they stand no chance.  If history repeats itself, the Zune HD will be another flop in a series of bad moves by Ballmer and company.  It is only a matter of time until the enterprise markets adopt Apple's products.  For instance, why is Wall Street issuing its employees BlackBerries instead of iPhones?  Landing a huge corporate contract will lead to widespread adoption of Apple's products; someday we could see Apple PCs in every office and an iPhone in every conference room.