“Microsoft CEO Steve Ballmer visited Silicon Valley on Thursday for his annual meeting with top venture capitalists to talk about Microsoft product strategy,” Michael Arrington reports for TechCrunch.
On mobile phones and devices, Ballmer said:
I’ll call anything that’s north of 300 million a year non-niche. PC’s are not niche devices. Part of the reason I think they’re non-niche devices is, multiple people can manufacture them, they all interoperate, they work together, etc. TVs are not niche. You know, there’s more than, well over 300 million of those sold a year. They interoperate in that case mostly based on standards, but with some innovation. Phones are not niche. The categories where, I think, a single player can control a large percentage of the volume are the smaller categories. What does Apple sell every year of iPods: 30 million, order of magnitude, something like that. What is the whole video game market is maybe 30 or 40 million in units a year. But when you get these categories that are 300 million, 500 million, a billion, a billion-five a year, the truth of the matter is you’re gonna want multiple points of manufacture, with a lot of innovation around it whether its supply chain, for geographic diversity, and our basic play with our software is to try and be super high volume. So I think you can have an Apple in the phone business, or a RIM, and they can do very well, but when 1.3 billion phones a year are all smart, the software that’s gonna be most popular in those phones is gonna be software that’s sold by somebody who doesn’t make their own phone. And, we don’t want to cross the chasm in the short run and lose the war in the long run and that’s why we think the software play is the right play for us for high volume, even though some of the guys in the market today with vertically oriented solutions may do just fine.
Full transcript of the interview and video here.
MacDailyNews Take: By SteveJack
First of all, Ballmer’s very careful definition of “niche” to suit his own purposes, doesn’t make it niche. Personal media players are no longer “niche.” And, guess what: iPod, with Apple’s software is by far the most popular, not software “sold by somebody who doesn’t make their own” devices.
Ballmer obviously can’t or won’t learn. His company’s one time lucky break with the PC isn’t going to be replicated. Google is trying it with mobile devices, but it won’t work. Google won’t get 90% of devices, but, if any company could, it’d be Apple. Microsoft is not even part of the discussion.
Apple builds complete ecosystems, not just an OS to load onto a bunch of disparate devices. iPhone already has more accessories than all other smartphones combined. In 2 years, iPhone already has 5 times the total apps of Microsoft’s Windows Mobile OS after a decade in the market. Windows Mobile is a failure. Mobile devices simply aren’t going to mirror the PC market. Microsoft’s scheme worked back when most people were tech illiterates and the products were very expensive; people bought what they were told was “good enough” and based on sticker price. Today, more and more people want devices that work and recognize that, by far, Apple’s devices work best, have the most apps, work perfectly with iTunes and iTunes Store, have iPods built-in, have the most accessories, have the most vehicle support, etc. Plus, Apple’s iPhone starts at US$99, not two or three grand or more like personal computers back when Microsoft took their share.
Microsoft and Google are pursuing what seems like a sound strategy at first glance, until you look at the iPod or walk into your local Target or car dealership or want a specific app and see that everything’s for iPhone. Consumers notice this fact and say to themselves, “I’ll get an iPhone because it’ll work in my car, with my gym equipment, with my Nike sneakers, with my glucose monitor, with my iTunes, heck, with everything; plus I can get any case or app for it that I could ever want. Anyone else’s phone would be far too limiting.”
And, by the way, Apple already dominates the smartphone market, just look at the number of fake iPhones and App Stores that have been and are being trotted out to see who’s clearly dictating the thinking within, and the direction of, the market.
For future use, I’ve added Ballmer’s comments to our MacDailyNews iCal along with all the rest of his incorrect iPhone pronouncements.
SteveJack is a long-time Macintosh user, web designer, multimedia producer and a regular contributor to the MacDailyNews Opinion section.
There is no charge for awesomeness . . .
I went to a dance recital for my three-year-old daughter last night.
Before the event began, an uncountable number of people could be seen entertaining themselves in various ways with their iPhones.
The only two non-iPhones that I noticed were being used to make calls.
I think it’s come to the point where if you want your phone to do anything beyond making calls, an iPhone is the device of choice for most people.
…And those who don’t have them, always seem to be looking longingly at them, and the comment heard most often from these people is, “I really want one of those, but I can’t afford the plan.”
Ballmer can flush hundreds and even thousands of billions of dollars down the toilet the fact is Microsoft is a company is decline.
Microsoft no longer has the technical expertise to build a world class computer OS from the ground up. They don’t have the leanness required to manage and deploy the technical expertise that they do have to effectively update and manage the aging brittle patched up computer OS that they have today and will have for the foreseeable future. Vista was not new it was an updated Windows 2003 server (is not new it was a slightly updated version of Windows 2000, and 2000 was just NT) stripped back for a consumer OS and had a bunch or eye candle duck taped to it. Windows 7 is not new it’s just a patched up version of Vista.
Ballmer does not want Microsoft to be in the Software business at all. He keeps it around to keep bill happy and because it’s a cash cow that he needs, to try and transform Microsoft into an Internet Advertising Company. Why because what Ballmer understands is selling ad space. He does not like computer software he never has, he doesn’t understand technology. Ballmer has always been the engine in Microsoft that wants to take 100% of every market and dominate the world. Microsoft is slipping and leaking it’s OS market-share to Apple. So, what does Ballmer do he looks at how Apple is winning that Market-share on a very superficial level. Apple has created great funny commercial ad campaign. Microsoft toss money at it to try and counter Apple’s Ad campaign (they fail), Apple has great stylish high-end retail space, so Ballmer tosses money at it and Microsoft goes retail (a failure in the making). The list goes on. The facts are Apple is still gaining Market-share at Microsoft’s expense.
What, M$ needs venture capital?
Ballmer, as usual, talks like an ADD idiot with way too much espresso in his veins. However, he did make one point that Apple would be wise to consider: it is often better to offer different regional products to suit local tastes/affluencies/needs. Let Microsoft flood the market with junk, but make sure that every corner of the global market has an Apple presence. China and India are the next playing field, and they are Apple’s to win.
My new 2010 Toyota Prius came with a frickin’ USB port to plug my iPod or iPhone into! A USB port in my car — specifically designed to work with Apple’s products! Enough said.
Can imagine having to explain at every press conference or meeting your position in relation to Apple’s products every time you talk. Poor Ballmer.
I love this guy. Long live Ballmer!!!!!!
Yeh and what about the XBox???
Like I see multiple manufacturers using the XBOX OS!!!!!!!!!!
What an idiot
I bet 1 in 5 questions Ballmy has to answer is regarding Apple in some way or another. He just loves that. Market share seems so important to him…how about a market cap to market share comparison? Apple has 10% rough est. market share and $160 billion market cap, where M$ has 85% rough est. market share and $200 billion in market cap.
Anyone see where the room for growth is? Add a diversified line of products in multiple categories with software as the bullpen, not the hardware.
@cheapskatedave
fscking awesome man!!!!, that seriously made me laugh, I could add more D&D;or WOW item refs, but I don`t want to steal your thunder
+1
I wonder when will Apple dominate the PC market? I’m sure it’s when Apple release Mac OS 11 that will kick Microcrap’s butts.
Life is Simple only on a Mac
So, what is Ballmer’s plan?
There may be 1.3B cellphones sold a year, which someday may all be smartphones which require a desktop class OS, but MS has been in this market for over a decade, and still only shipped 18M licenses last year. That’s what? 1.4%!!! How in the heck are they going to recreate their OS monopoly on cellphones, when they are already behind in so many ways?
They are up against Nokia’s Symbian, Google’s Android, and vertical mfrs like Blackberry and Apple. All of these companies are large and well-capitalized. They can’t be assimilated so easily, okay, maybe MS could buy BB, but not the others. The 80s are long gone and MS’s chance to dominate the smartphone OS market is gone.
MS shipped 18M licenses last year at maybe $15 a pop, for a total revenue of what? $270M. That’s pitiful compared to Apple’s iPhone which is already generating billions in revenue, each quarter.
If I were a VC listening to Ballmer Blather, what I’d want to hear is how he expects to increase license shipments by a factor of 10, because only then does the revenue start to become meaningful. Either that, or when is the Pink phones starting to ship, because the cellphone license business is NOT a billion dollar business. It’s a NICHE!
And, as far as companies like MS and Apple are concerned, if a line of business does NOT generate a billion dollars in revenue, it’s a NICHE. That’s the definition.
Ballmer thinks that the only measure of success is HOW MUCH.
He has no conception that HOW WELL a thing is done is also a measurement of success.
Forgive the auto analogy, but if by his logic MOST is BEST, he drives a Toyota Camry, shops at Wal-Mart and only eats at McDonald’s (It’s clear from the way he looks he’s got his very own McD’s franchise in his house!)
Does… Ballmer know that Android is free?
I can’t believe they’re still trying to push the clunky Windows Mobile.
Oh, by the way, Ballmer’s record so far on Tech Predictions?
Let’s just say its a little tough when you don’t have a monopoly.
lol
This is the same hyperactive dolt that said iPhones would never dominate the market. Ever. He’s at least staying consistent with his bullshit.
I find it amusing that they keep riding this monopoly thing. They dominated the market and got as high as a 97% installed base. That is impressive. They are now at an 89% installed base? Trend? Hmm.
What is the #1 smartphone?
What is the #1 MP3 player?
What is the #1 notebook on college campuses?
Who is the #1 music seller in the world?
Who has ever even so much as laid a hand on a Zune?
At Apple exec meetings, how many employees are carrying around a WinMo phone or a Zune?
At Microsoft meetings, how many employees have an iPhone or iPod?
I can’t be the only one seeing this, but Ballmer sure is oblivious. Not surprising from the guy that made this:
“China and India are the next playing field, and they are Apple’s to win.”
Not sure about this reference, the iPhone has been here in China for ages man. That’s old news.
As for the Mac in China? Get real. With PRC import taxes the prices for Apple products here is a complete ripoff. No one looks at Macs but the foreigners.
Yeah, it sucks when some banks REQUIRE Internet Explorer for online service. Pfft.
He wins an award for the Longest Meaningless Run-on Sentence of the Year.
Cars are so niche. I mean, until 300 million or so are manufactured each year, cars are sooo niche.
High volume, low margin, low quality products……. or low volume, high margins, high quality products.
@ Mr Reee
You’re right, but in the early 1990s Windows was nowhere near as good as the Mac and yet outsold the Mac in one year.
Put it this way – I want an iPhone 3GS … but so far can’t get one because they are sold out everywhere in Canada (I’m on a wait list). Apple simply cannot meet world demand as a single maker. One of my friends bought another brand simply because he needed a phone *now*.
Apple is not after world domination, no matter how much the Apple zealots want to believe it. They want to be a premium product that can demand higher profits and you can’t do that if your product becomes ubiquitous like a Chevy or Ford.
Along with most phone makers choosing other OSes, MS could be dead in the water unless W. Mobile 7 is utterly fantastic, which is unlikely given that it will suffer all the problems Windows presently does trying to be everything to everyone. Still, with billions in the bank MS can buy a lot of backroom deals and advertising to make sure they take a fairly big bite of the market. We have already seen their marketing tactic “the Windows you know and love … on a phone”. The 95% of the world who’s never seen anything but Windows will buy Windows on their first phone for that line only.
Think and Jimbo,
Don’t we have to get Ballmer in front of a mirror for him to realize he’s on the wrong ‘earth’?
I don’t know what his hygiene ritual entails, but the guy obviously shaves.
@Think
Journey To The Far Side Of The Sun –
I saw that when I was a Kid in the 60s and I loved it.
From Synthmeister:
“By Ballmer’s own definition of 30 million units or less per year, WinMo, X-Box, Zune and all MS Plays4Sure mp3 players all ALL niche products.
MicroSoft sold LESS than 20 million WinMo licenses last year. Ballmer’s idea of hundreds of millions of WinMo Phones by dozens of hardware vendors is pure fantasy. It simply is NOT happening.”
If you actually read the interview he DID say those were niche products (including the XBox). His point is not that WinMo is dominating the smart phone market now. His point is that given that it’s NOT a niche market, it won’t be dominated in manufacturing by one vendor. In fairness, I can’t find a counterexample to disprove his statement.
So his point is that he believes there will be multiple vendors in the smart phone market, some larger,some smaller. He wants to be in as many as possible. Reasonable. It’s the Android model too.
[It’s clear from the way he looks he’s got his very own McD’s franchise in his house!]
LOL