Linked by Thom Holwerda on Tue 9th Oct 2012 22:01 UTC
Microsoft Steve Ballmer's annual letter to shareholders makes it very clear Microsoft is at a point of no return - and in the middle of a transition into a hardware company. "This is a significant shift, both in what we do and how we see ourselves - as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses." Line. Sand.
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In plain English
by Soulbender on Wed 10th Oct 2012 02:06 UTC
Soulbender
Member since:
2005-08-18

"We want to be like Apple"

Reply Score: 7

RE: In plain English
by howitzer86 on Wed 10th Oct 2012 02:27 in reply to "In plain English"
howitzer86 Member since:
2008-02-27

That's a good thing.

Reply Parent Score: 0

RE: In plain English
by kwan_e on Wed 10th Oct 2012 03:22 in reply to "In plain English"
kwan_e Member since:
2007-02-18

"We want to be like Apple"


But surely Apple's kind of transitioning more into a software company. They mostly just sell commodity hardware at premium prices.

Reply Parent Score: 2

RE[2]: In plain English
by Elv13 on Wed 10th Oct 2012 03:39 in reply to "RE: In plain English"
Elv13 Member since:
2006-06-12

Apple have been a software company for half a decade, then killed most software they made and switched back to hardware. They look to currently have as many chip designer as SW engineer.

They had some nice professional software back when professionals were still the majority of mac owner. Now they shifted away from the market that kept them alive during the tough years. If the masses ever leave Apple behind, they are dead for good, they have no one else.

Reply Parent Score: 1

RE[2]: In plain English
by Soulbender on Wed 10th Oct 2012 03:44 in reply to "RE: In plain English"
Soulbender Member since:
2005-08-18

iPhone
iPad
iPod
Macbook
...etc...

That's a lot of hardware for a software company.

Reply Parent Score: 4

RE[2]: In plain English
by kaiwai on Wed 10th Oct 2012 04:07 in reply to "RE: In plain English"
kaiwai Member since:
2005-07-06

But surely Apple's kind of transitioning more into a software company. They mostly just sell commodity hardware at premium prices.


I guess you missed the announcement when they transitioned from PPC to Intel: "At the heart of the Mac is Mac OS X" - it is the operating system not the hardware that defines Mac. They haven't transitioned because they've always been a software company with a hardware division little more than a giant dongle to enable you to get Mac OS to work. The biggest problem as I see it is the the RDF is no longer present and their consumerisation of computers is eventually going to isolate a large number of long time Mac users who depend upon them to make a dollar - such as the creative sector. I've made the transition from Mac OS X to Windows along with moving my Creative Suite from Mac OS X to Windows pretty much showed me that the only 'constants' used to justify the entrenchment of Apple in the creative sector have more in common with old wives tales than genuine strengths.

Edited 2012-10-10 04:17 UTC

Reply Parent Score: 3

RE[2]: In plain English
by Laurence on Wed 10th Oct 2012 13:21 in reply to "RE: In plain English"
Laurence Member since:
2007-03-26

Apple have always been a software company. They just reach out to hardware because they believe that by controlling the hardware, you can write better software; and to a degree I actually agree with them on that.

I remember an interview with Steve Jobs which beautifully explains their view on the market: http://www.youtube.com/watch?feature...A1FNL4#t=1710s (link should play from the right point)

That whole interview is an interesting watch too -if you have a couple of hours spare- as it's a rare interview where both Gates and Jobs are together and chatting to each other on camera. You just have to excuse the annoying interviewers.

Reply Parent Score: 2

RE: In plain English
by galvanash on Wed 10th Oct 2012 07:28 in reply to "In plain English"
galvanash Member since:
2006-01-25

"We want to be like Apple"


True enough, but who wouldn't want to be?

I'm not talking about the intellectual/tehnical/ethical stuff we usually discuss here - strictly financials. Apple makes more money than Microsoft - alot more. That is just ridiculous when you consider the vast difference in number of employees and product mix between the two companies. Its like seeing a local mom and pop brewery make more money than Budweiser...

If you look at a graph comparing MS and Apple financials over the last 5 years, in virtually any measurable metric (revenue, growth rate, market cap, profit margin) Apple's line looks like a fricken rocket ship compared to MS - and ironically that is during a 5 year period where MS has done pretty well for the most part, historically speaking.

Lots of people hate on Apple, but you cannot deny that what they are doing is working from a financial perspective...

I don't think Microsoft can NOT try to be more like Apple... Unless Apple implodes in the next few years (which I doubt), its just going to be more of the same. Microsoft's board is inevitably going to demand that the company start emulating the success of their competitor - any CEO not willing to try would get their hat handed to them.

Sure, lots of people think this is a mistake. It may well be in the long run, but that fact is that Microsoft (as it is now) might be winning battles here and there, but they already lost the war and they know it. Their future is either to beat Apple at their own game or settle in for a permanent future as number 2.

Apple IS going to start doing something with that ridiculous 100+ billion dollar war chest at some point. Think about that.

MS can't win if they don't start trying to beat Apple at their strengths...

Reply Parent Score: 5

RE[2]: In plain English
by tanzam75 on Wed 10th Oct 2012 19:25 in reply to "RE: In plain English"
tanzam75 Member since:
2011-05-19

Apple makes more money than Microsoft - alot more. That is just ridiculous when you consider the vast difference in number of employees and product mix between the two companies.


Indeed.

The iPhone has better (net) margins than Windows.

The world has truly turned upside down when a hardware device has better margins than a software package with a worldwide monopoly. That's why Microsoft has to move into hardware. It can't afford not to.

There are also some tangible financial benefits from bundling the software inside a device.

For example, China has a piracy rate of 77%. Every Surface tablet that it sells to Chinese consumers is equivalent to the profits that it normally would make from 4-5 Chinese Windows PCs.

In addition, Microsoft currently has over $50 billion of cash stuck overseas, because they do not want to pay the taxes to repatriate it. But it's free to import Surface tablets! In essence, Uncle Sam is subsidizing all US sales of the Surface by 10-15%, under the condition that the Surface be manufactured outside the US. (Talk about perverse incentives.)

Edited 2012-10-10 19:29 UTC

Reply Parent Score: 3

RE[2]: In plain English
by MollyC on Wed 10th Oct 2012 21:02 in reply to "RE: In plain English"
MollyC Member since:
2006-07-04

It's not so ridiculous that Apple makes more money despite having fewer employees when you stop to think about the average salary of Apple's direct AND indirect employees. The majority of Apple's employees (adding up both their direct and indirect workforce) work for just above slave wages. Only a very small percentage of Microsoft's total (direct and indirect) workforce work for such wages.

Besides that, look at companies like Sony, Yamaha, and the like. Sony makes consumer electronics, computers, movies, music CDs, life insurance, banks, magazines, and on and on and on. Yamaha is so diverse that they make everything from motorcycles to saxaphones. Those two companies have more direct and indierect employees than Apple and Microsoft combined, by far, yet make less money than either.

I'm also reminded of the AOL/TimeWarner deal, which was actually AOL buying Time Warner, despite AOL being a simple online service and Time Warner being involved in magazines, TV networks, movies, video games, etc. Time Warner had way more assets and employees than AOL, yet AOL made more profit and had way higher marketcap value at the time.

Which is to say that generally the whole system is out of whack, kind of. ;)

Reply Parent Score: 3