“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.
maky.
Wow. That’s basically like saying Apple will definitely dominate. Apple should thank Balmer for the blessing.
There was an old movie from the 60s I believe, that there was another earth directly opposite us on the other side of the sun. We could not see it because of it’s position.
They were just like us in every way, except one critical thing. Everything was opposite on that earth.
Ballmer must have crash landed here instead of his home planet.
What a tool. If you think the only requisite for having the best product is that, for the time being you have the most sales, then you won’t even have that for much longer.
I miss the developers rant!!!
Steve Jack is the original Fake Steve Jobs. Maybe not fake.
Takes a Steve to put another Steve in perspective.
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.
MDN- will you guys publish your holy iCal? I think we’d all be interested to see and have a laugh.
Ballmer is seriously verbally challenged.
And don’t get me started on WristPCs, MS Media Center PCs and the MS TV settop box. Talk about niche products. Sheesh. Everything MS has done outside of Windows and Office is a niche product and losing money.
@Think
Journey To The Far Side Of The Sun is the movie you are thinking of. If Ballmer were in it, it would be called Journey To The Far Side Of Reality.
Ok Seriously. How can anyone look at that guy or especially LISTEN to him talk, and not know immediately that he’s the highest (or lowest) form of dumbass.
He’s attained Level 51 Dumbass with a +9 Tunic of Tard.
Hmmm…
Just like with it’s line of computers, I don’t think Apple wants to be the Microsoft of smart phones.
If Apple were to license the iPhone OS and be a “non-niche” player and own 90% of the Smart Phone market, it’s profit margins would fall to almost nothing. Look at Dells margins for their computers.
Apple is most likely very happy being a “niche” Smart Phone with decent profit margins.
Da Nile, it’s not just a river in Africa.
Windows Mobile is a joke. Manufacturers hate it. Consumers hate it. Even the windows fanboys that comment on Gizmodo hate it. Ballmer doesn’t seem to realize that in order for his plan to work, he needs mobile software that phone manufacturers want to sell and consumers want to buy. After more than a decade of development, Windows Mobile is far behind iPhone OS, WebOS, and Android, and that’s just pathetic. I agree with the MDN take, there is no way Microsoft’s fluke success with with Windows is going to be recreated on the iPhone.
And that’s not just because Windows Mobile sucks, but because equipment manufacturers are much wiser now than they were in the late ’80s and early ’90s, they know how Microsoft operates, and would rather not partner with them if at all possible. Manufacturers who want an iPhone ripoff using a one-size-fits-all OS will choose the far superior (and free) Android rather than Windows Mobile.
The battles lines are clearly drawn. Apple #1, with Google trying to squeeze into 2nd. RIM may be great, but my view is Android is seeking to give non-iphone consumers the exact environment through cloud computing and web apps. RIM doesn’t seem to have the ‘iphone ecosystem’ which is what really drives the iphone (although I honestly haven’t researched what RIMs ecosystem is). Google also understands that a virtual keyboard on a device gives a universal interface capable of far exceeding ordinary means. Google just needs to stay in it’s own segment without encroaching upon Apple’s.
Even though he is a multi billionaire it must be tough for old Ballmy to watch his company continually lose power and control while Apple continually grows.
After all, the money is just a score keeper for the super rich. When you can see your score dwindling it does not matter how far ahead you are. You are becoming the new loser.
the truth of the matter is you’re gonna want multiple points of manufacture,
…which Apple already has. How many companies do they engage to supply the components for their products again?
The real difference is, Microsoft doesn’t want the risk inherent in actually selling the hardware themselves. They’ve seen what a nightmare it can be with the Zune, and they want no further part of that. Much easier for them to license their software to other saps… er, companies, and have them take all the risk in actually making profitable products. This way Microsoft doesn’t have to do anything except sit around and collect license fees (without paying any licensing taxes to their home state in the process).
So when Ballmer says “the software play is the right play for us for high volume”, that’s what he really means – Microsoft is happy to let their hardware “partners” take all the risk, while they take all the profit.
“Ballmer obviously can’t or won’t learn. His company’s one time lucky break with the PC isn’t going to be replicated.”
They have been riding on that monopoly to keep feeding their failures. Look how hard they work at trying to lock in the Internet an other markets. Microsoft doesn’t innovate, they “imitate”.
Boy, do I get tired of him describing Apple’s ridiculous success as “doing just fine”.
Hello Denial, meet Ballmer. Oh, you two have already met?
MBRCOMFALAIT
Juxtapose a chart of the iPhone growth rate with Ballmer statement and it is very hard to come to the same conclusion. Apple is going to pass RIM and Nokia is next.
I meet so many people that use Window and have had an iPod. Once they get an iPhone they realize it is a mini-computer. The iPhone halo is so much bigger than the iPod halo.
To paraphrase an old MacDailyNews Take:
“The day Apple passes Microsoft in value, that fscktard’s bald head is going to pop off like a dandelion flicked by a thumb.”
Regardless of what Apple do, Microsoft will never be the best alternative.