Microsoft CEO Steve Ballmer chats with BusinessWeek editors about Web 2.0’s sky-high valuations and the new competition the company faces.
Some questions and answers involved Apple:
BW: Who are Microsoft’s top competitors?
Ballmer: Guys who can touch us in multiple places probably matter more than guys who can touch us in any one place. And actually we don’t really have our big competition from any one company. Any one company, we know how to compete with… there are cases where software gets monetized through hardware. That’s what an iPod is. iPod is a software thing. You just happen to collect the money on the hardware.
BW: Does Zune fit into the hardware piece of this?
Ballmer: Sure it does. Because the value of Zune, if we’re successful, is all in the software. It’s in community [the ability to share music and pictures with other Zune users]. I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation. That’s a software experience. The truth is, though, if it makes money, it will be built into the gross margin on the hardware. We’ll figure out how to make money on the community perhaps later though advertising or other means.
BW: How much money will you lose per Zune?
Ballmer: None. Apple put the hammer down there, dropped the price down to $249. If they had been $299, it would have been nicer. They have the advantage of scale. So we’re at $249, too. We don’t make a lot of money, not to start out.
Full article here.
Chunky Zunes can squirt brown, er.. brown Zunes can squirt chunks? What’s chunky and brown and squirts, again? Each Zune should come with a free bottle of Kaopectate in the box. And, excellent business plan you have there, Balmy: “If it makes money… We don’t make a lot of money, not to start out… We’ll figure out how to make money on the community perhaps later.” What a joke.
Related articles:
Microsoft’s consumer electronics track record: long string of failures – October 11, 2006
MP3.com founder: ‘Zune will be an expensive failure for Microsoft because consumers aren’t stupid’ – October 06, 2006
Microsoft fails to secure key Zune domains – October 04, 2006
Microsoft rigs Zune with tricky pricing and proprietary money schemes – October 03, 2006
Why Microsoft’s Zune won’t kill Apple’s iPod – October 03, 2006
10 Apple iPod vs. Microsoft Zune myths – October 02, 2006
Analyst: Zune could lead to ‘civil war’ between Microsoft and Windows Media partners – September 29, 2006
Thurrott on Microsoft’s Zune: ‘The makings of a disaster, what the heck are these people thinking?’ – September 29, 2006
Analyst: Microsoft Zune’s as good as dead on arrival – September 28, 2006
Microsoft sets 30GB Zune price at $249.99 – September 28, 2006
How Microsoft’s Zune can kill Apple’s iPod – September 21, 2006
Microsoft’s Zune insanity – September 21, 2006
The Microsoft Zune 1.0 dud – September 20, 2006
Microsoft’s underwhelming Zune a ‘viral DRM’ device – September 18, 2006
SanDisk teams with RealNetworks against new common foe: Microsoft Zune – September 18, 2006
Creative does Apple’s dirty work by immediately attacking Microsoft’s Zune – September 17, 2006
Motley Fool’s Jayson: Microsoft’s ‘just plain ugly’ Zune a meager offering, not an iPod killer – September 15, 2006
What’s in a name? ‘Zune’ a French-Canadian euphemism for penis or vagina – September 15, 2006
Crave at CNET: ‘Microsoft Zune, all the excitement that brown can bring’ – September 15, 2006
Microsoft’s Zune underwhelms – September 15, 2006
Enderle: Microsoft Zune ‘a design mistake’ – September 15, 2006
Microsoft hypocrisy exposed with Zune: What ever happened to ‘choice?’ – September 14, 2006
Analyst: Microsoft Zune with fake scroll wheel ‘hardly an Apple iPod killer’ – September 14, 2006
Analyst: Microsoft Zune won’t spoil Apple’s biggest iPod Christmas ever – September 14, 2006
Microsoft unveils Zune 30GB player, Zune Marketplace; declines to disclose prices – September 14, 2006
Analyst: Microsoft’s Zune an ‘underwhelming’ repackaged Toshiba Gigabeat; no threat to Apple iPod – August 30, 2006
Microsoft confirms brick-like Zune to be made by Toshiba – August 25, 2006
Microsoft Zune is chunky brick made by Toshiba – August 25, 2006
Microsoft to spend hundreds of millions, several years on Zune trying to catch Apple iPod+iTunes – July 27, 2006
Zune: Apple cannot lose. Microsoft cannot win. – July 26, 2006
stroke my zune and ill squirt you lol. gawd this is too easy. omg my zune just prematurely squirted all over. 🙁 ill pass on this me thinks. i can squirt just fine w/o a zune.
haha!
squirting… that’s what Cytherea can do!
maybe balmy was thinking that the zune was perfect for squirting movies?
“make money on the cmmounity” later? Somehow?
Amazes me how clueless he/they are.
Mind you, no one ever went broke underestimating the intelligence of the general public.
“I want to squirt you a picture of my kids. You want to squirt me back a video of your vacation.”
I officially want to throw up now. That is an image I didn’t want stuck in my brain. Ballmer squirting ANYTHING is disgusting. >.<
Microsoft needs to stop this dude from talking… Seriously.
Apple makes tonnes of money raping its customers. If Zune isn’t losing money, even though it doesn’t have the economy of scale, you can imagine that Apple is making 200% profit on their nanos.
“You want to squirt me back a video of your vacation.”
Maybe I do, but even if 2 people actually bought zunes in the world the fact remains that the 1G Zune CANT PLAY VIDEO.
Thats right. Can’t play video.
See the article on it at roughlydrafted.com about the zune.
Honestly, the guy is an idiot. He is the reason why MS stock can’t gain. His first act at being announced as CEO was to go on national TV to tell the entire world that MS stock along with other stocks, was way over valued. Maybe that was true, but in the interest of his employer, he was the last person in the world that should of made that statement on TV. Duh?
MS needs to fire this guy and hire some folks in trench coats to finish the deal on him. I am a Mac fan and I want M$ to get rid of him. It is like seeing a team you don’t like get skunked 100 to 0 in the World Series…you just start to feel bad for them. I think the Apple vs. MS thing makes Apple perform better and as a user of Apple products I like the effects that competition has on my computing/music experience.
Just my $0.02
He doesn’t even know what he’s talking about…
What a complete moron…
Ewww.
Balmer talks about guys touching him and squirting. That’s just foul.
hard to look at that picture of balmer without an umbrella!!! even harder when reading him speak of ‘squirt’s!!! two umbrellas!!! YUK!!!
Micro$oft is a losing business. Apple should buy SAP AG and join the FileMaker with SAP. Then Apple could squeeze the f#ck out of Floppysoft.
MDN magic word: fact
OK, hang on. Several people have done tear-down analyses of the iPod (including the 5.5Gs) and have estimated that Apple is making a “significant” margin on each one sold.
Where is the assumption coming from that MS is losing money on each Zune? Has somebody done a similar tear-down to look at the components? Functionally, the only real difference between the iPod (30Gb) and Zune is an FM tuner and WiFi chipset, so they should be functionally and physically similar. Is the presence of a WiFi chip alone enough to completely erase the hardware margins that iPod enjoys? Does anybody know what sort of margin Toshiba was making with their Gigabeat-S model? Does economy of scale play that big a role in Apple’s ability to make a profit on each iPod?
Who in the hells says “squirting” to describe transferring anything? Disgusting!
NOTE TO MDN:::::::::: dear MDN – thank you so much for posting that tongue picture each time you run a Ballmer story. it never fails to make me laugh. you endear yourselves to me a little more for each priceless tongue post.
“Apple makes tonnes of money raping its customers”
Obviously you’ve never been raped otherwise you wouldn’t be so generous with your use of the term.
When has Apple FORCED anyone to buy anything? Never?
Freewill my friend.
Now, go back under your rock.
“Touch us…” “Squirt”
???
Very sexual.
OK.. first the “licking” Ballmer pic. what the heck is that. then the all that touching and squirting talk. This is disgusting! Funny as heck but disgusting. Maybe the caption should read Steve Ballmer, CEO of “touching, squirting, and tongue lashing”?!
Squirt! What an idiot! Only Ballmer can make the Zune sound even MORE unappealing than it already is!
A must see video: “Steve Ballmer going crazy”
Prepare to be amused.
You people don’t know the history of squirting.
This Squirting thing should get plastered over the entire web.
It’s priceless.
Microsoft inovation at work. Squirt!
(Could catch on for transfering porn)
Uh… The Zune can play video. It comes with videos loaded. There’s just not going to be any video service at first. (Doesn’t change the fact that trading home movies via clunky Zune players is a stupid idea.)
OMG. I had to stop reading when he said he was going to squirt.
ACK! Horrible mental image! Make it stop! Make it stop!
Please don’t squirt anything in my direction!
B-Sabre-
The biggest difference between Zune and iPod is not a couple of chipsets, it’s the fact that Apple sells between 8 and 14 MILLION of them a quarter, and they have supply channels that give them the best prices on components. MS has none of this, hence the higher cost to build.