Linked by Thom Holwerda on Mon 26th Mar 2007 22:11 UTC, submitted by anonymous
Microsoft "The word 'intense' was invented for Ballmer, who met with us in a green room that had a paper sign with his name taped to the door. While he was at first warm and engaging, a question about security features shifted his mood. His eyes, soft when he smiles, grew dark. The usually boisterous Ballmer became unexpectedly quiet and soon exited the room without saying goodbye. Still, he had a lot to say to SmartMoney senior writer Dyan Machan before he did."
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RE[4]: What a dweeb!
by Umbra on Tue 27th Mar 2007 06:46 UTC in reply to "RE[2]: What a dweeb!"
Umbra
Member since:
2006-03-06

You realize there's an enormous difference between having the lead and having a presence. I would consider 2-3% to be a presence, just not a very big one.

Yes there certainly is a big difference:

Q4 2006 revenues:
Microsoft: 12,5 billion USD 100%
Apple: 7,1 billion USD 57%


Market shares (according to your post)
Microsoft: 96%
Apple: 2-3%

So, out of 32 times the Apple market share, Microsoft only manage to squeeze 76% more revenue out that share.

If I where at a Banker I would say:

1) surely, Microsoft's business model is suffering. They will end up pretty much as a "supplier of components for refrigerators"

1.1) they have no influence on how the refrigerator actually look in peoples homes (design)

1.2) they are not the "Main Brand" and they cannot control how the refrigerator is marketed and branded. Lack of influence and leadership effects.

1.3) and they might be forced out of the market since their business model is lacking so much compared with Apple´s business model.

Apple is getting 32 times more out of each market share.

As a banker I would say: sell !
.

Reply Parent Score: 5

RE[5]: What a dweeb!
by TBPrince on Tue 27th Mar 2007 08:54 in reply to "RE[4]: What a dweeb!"
TBPrince Member since:
2005-07-06

So, out of 32 times the Apple market share, Microsoft only manage to squeeze 76% more revenue out that share.

I'm not sure this is the best way to see that. Assuming that numbers are true (they look consistent), there are big differences among MS and Apple.

For example, do you know which is second most-used OS? Pirated Windows. And that counts like 20-30% market share (in some regions, even 60-70%) that is pirated Windows has x10 market share than Apple itself has now. If Microsoft manages to recover a tiny fraction of these lost revenues, it will get far more money than Apple do with OS X. Moreover, there wasn't almost any iPod HALO effect over OS X and Intel transition didn't help that much: Apple still holds a little fraction of the market and it won't be easy to get more now that Vista is out.

And don't forget Microsoft is starting to provide services, something Apple can't do easily (if at all).

Ballmer is right to emphasize Microsoft can get more money from other markets where Apple has no presence, for ex. XBox, which is now a bringing losses to MS but might become a plus sign in 1-2 years. There are far more markets where Microsoft can get money from while Apple is mostly struck to 2 main markets (and iPhone wasn't that impressive to me... I wouldn't buy it for sure).

Things look very different than you portrait them. If I had Microsoft stocks (which I don't: I don't buy stocks at all...), best time to sell was two years ago. I would keep them now, to be honest.

Reply Parent Score: 1

RE[6]: What a dweeb!
by Matt24 on Tue 27th Mar 2007 10:53 in reply to "RE[5]: What a dweeb!"
Matt24 Member since:
2005-07-23

"Apple still holds a little fraction of the market and it won't be easy to get more now that Vista is out"

1) I have used Vista: Horrible.
2) This year at least 3.2 miljoen people will switch from MS to OSX.

Don't talk nonsense.

Reply Parent Score: 1

RE[7]: What a dweeb!
by Umbra on Tue 27th Mar 2007 12:17 in reply to "RE[5]: What a dweeb!"
Umbra Member since:
2006-03-06

I'm not sure this is the best way to see that.

Well, do you have at better view to present?

By 2012 Apple will be bigger than Microsoft in revenue, but far behind in traditionally and (how stupidly) measured "market shares". One can see how utterly foolish it would have been for Apple to go the Microsoft route, licensing Mac OS X to trillion PC producers and Paul, Peter & Joe-garage. Revenue form this model would have been like a drop in the ocean compared with todays Apple growth potential and business model (it's the Mac that is the product, not Mac OS X)


For example, do you know which is second most-used OS? Pirated Windows. And that counts like 20-30% market share (in some regions, even 60-70%) that is pirated Windows has x10 market share than Apple itself has now. If Microsoft manages to recover a tiny fraction of these lost revenues, it will get far more money than Apple do with OS X.

Well, pirate-market-share does not do much good for Microsoft as a company. However Mac OS X is not a Product! This is the most fundamental difference between these two companies. Microsoft Windows is a Product. Mac OS X is not. It is The Macintosh that is the Apple Product. And here it is Apple that controls everything. Every details, every look, every marketing initiative. If Apple think the Mac should have a face lift in appearance & look, Apple will do just that. The rival, Microsoft, does not have this control. Today the personal computer is moving into peoples expensive fully decorated living rooms, so it better look good! No more PSC's hidden away in cellars and behind closed doors.

Todays security- and OS-maintainance problems are just baby food compared with security problems of the future. Microsoft does not compete here, because they are not in control of the products which they are set to control = the consumers personal computer. They just deliver a component, the PC OS.

Microsoft has now exploited it's market to a 95% extent on todays market size. But Apple ? Apple is just warming up! Which company has a greater growth potential ? You can guess!

The problem for "Microsoft of the future" is that Microsoft´s business model has painted the company into a corner. Microsoft can't go into hardware. They can't go the Apple route. At least not without a declaration of war from zillion so called "pc-partners" and 100% of the market legislation body. First Microsoft would have to loose some hefty weight, i.e. market shares, before that could happen.



Your are absolutely right about this market share measuring method being plain stupid. It really only measure how many Microsoft-Business-Model-Copies of Microsoft main product are being sold.



Moreover, there wasn't almost any iPod HALO effect over OS X and Intel transition didn't help that much: Apple still holds a little fraction of the market and it won't be easy to get more now that Vista is out.

This is not true.

Reply Parent Score: 1

RE[5]: What a dweeb!
by agrouf on Tue 27th Mar 2007 12:11 in reply to "RE[4]: What a dweeb!"
agrouf Member since:
2006-11-17

Q4 2006 revenues:
Microsoft: 12,5 billion USD 100%
Apple: 7,1 billion USD 57%

http://db.tidbits.com/article/8713
4.84 billion USD for apple

Reply Parent Score: 2

RE[6]: What a dweeb!
by Umbra on Tue 27th Mar 2007 12:24 in reply to "RE[5]: What a dweeb!"
Umbra Member since:
2006-03-06

I am not talking about financial quarters:

http://www.appleinsider.com/article.php?id=2412
Apple on Wednesday released results for its fiscal 2007 first quarter ended December 30, 2006, which included record revenue of $7.1 billion and record net quarterly profit of $1.0 billion, or $1.14 per diluted share.

Reply Parent Score: 1