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More Faint Praise From Microsoft's Steve Ballmer

Posted by: Peter Burrows on July 30, 2009

Maybe it’s being in the rosy glow of accolades over his deal with Yahoo, but Microsoft CEO Steve Ballmer was in a magnaminous mood toward his PC rival to the south. I’m at Microsoft’s financial analysts meeting in Redmond, where Ballmer joked about the many Apple laptops in use by the financial analysts in the room. “We have low share in the investor community. I see a lot of Apple logos,” he said during his opening remarks. “Don’t bother to hide them. I’ve already counted them. And it’s okay—feel free [to use the Macs], so long as you’re running Office.”

He insists he can afford to take Apple somewhat lightly. While he praised Apple as a “fine company” that was doing a great job with its low-volume, high-price strategy, he claims that contrary to popular perception, Microsoft has not lost any share to Apple in the past year. Any share shifts are “a rounding error.” He says that any meager share gains “cost us nothing. Hopefully, we’ll take share back from Apple. But they still sell only 10 million PCs a year, so it’s a limited opportunity.”

Still, Microsoft needs to keep the dollars flowing on the ad front to reach consumers that might be leaning towards buying a Mac, says chief operating officer Kevin Turner. “We’ve made so much progress communicating to the people who are thinking about Apple,” with the low price message in its recent “Laptop Hunter” ads. The goal: to show consumers that “they’re going to get ripped off, and pay too much” if they go Mac.

Of course, Ballmer also explained that the company’s goal is to raise PC prices in the next year. That’s due both to expected popularity of a new class of higher-end and higher-priced netbooks, a new pricing strategy around Windows 7 that the company hopes will result in far more upgrades to premium skus, and a reversal of a strategy in the last year to cut prices to spur demand in emerging countries. “The theory was wrong,” said Ballmer, in that Microsoft didn’t tap enough untapped demand to compensate for the price hit. “You’ll see us address the theory. We’re going to readjust those prices north” with windows 7.

With Apple getting somewhat more aggressive and Microsoft looking to raise prices, it should be an interesting holiday season in the timeless Mac vs. PC debate.

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Reader Comments

qka

July 30, 2009 02:22 PM

Microsoft is for cheapskates with no money.

Now there's a winning long range strategy!

Jay

July 30, 2009 04:43 PM

It's almost funny to hear MS making the argument that people are "going to get ripped off, and pay too much" if they go Mac. I bought that argument for many years and worked on and purchased many Microsoft PCs over the years.

And I paid dearly for using that lower priced operating system and low priced hardware. I lost countless hours updating and upgrading, restoring, reformatting, tuning, getting rid of viruses, malware, etc. I spent extra money on extra software and training. And on tech people to fix things.

I switched to the Mac almost 3 years ago after my first month in business for myself. Using a PC cost me extra money and precious time when it all crashed several times when trying to start up (before leaving prior job) and then died a horrible death after starting my business. $600 Geek Squad bill alone offset the "premium".

People will continue switching to Apple's Mac platform as word gets out about improved operating expense, lower overhead, increased productivity, peace of mind, etc. If price is an absolute impediment and one has plenty of free time, the PC makes sense. If your time is valuable and better used to create value, the small premium for an exceptional computing platform makes sense.

The quality of hardware, software and service with Apple is truly phenomenal and worth every single penny. With exceptional hardware, software and service available at such a small premium over the true costs of a Microsoft PC, it doesn't make sense to settle for mediocrity.

Squeezebox

July 30, 2009 04:48 PM

Macs are for people with more money than sense. PC's for the people!

Perry Clease

July 30, 2009 07:14 PM

"Ballmer also explained that the company’s goal is to raise PC prices in the next year."

That will be great for the laptop hunter adverts.

LS

July 31, 2009 08:34 AM

Linux on a PC or a Mac is pretty smart for Internet computing. Nothing beats Linux for security, performance or DRM free computing.

BAM

July 31, 2009 02:29 PM

LS. What a great idea! Regular users will love to go buy a Mac, re-format it and install linux. Get in touch with reality brother!

Squeezebox

July 31, 2009 02:35 PM

Macs are for people who are too stupid too know how computers work.

Limbic

July 31, 2009 03:27 PM

PC's are for people too stupid to buy computer that already works?

MagicBus

July 31, 2009 03:35 PM

"Macs are for people who are too stupid to know how computers work."

More like, PCs are for people who are too stupid to know that computers are supposed to work for you, not the other way around.

Robert Brown

July 31, 2009 04:09 PM

Let me get this straight....

Microsoft is adverising to those who want to spend less.

Microsoft wants to raise the prices folks pay.

Does Microsoft know anything about economics, specifically about the theory of the price - demand curve, i.e higher prices dampen demand, lower prices increase demand.

Further, by raising their prices, they come closer to Apple's prices, reducing the factor which they have been attempting to use as a differentiator.

Does any of this make any sense to anyone outside Microsoft and its circle of fanboys?

davesmall

July 31, 2009 04:24 PM

So lets see know, how has Steve Ballmer done in the battle against Apple.

Take a look at this chart comparing Microsoft and Apple stock prices from the beginning. Now zero in on January of the year 2000. That's when Steve Ballmer took over as CEO.

http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c=aapl

Notice Microsoft's performance vs Apple before Steve took over and then after Steve took over.

dave

July 31, 2009 05:24 PM

"the company’s goal is to raise PC prices in the next year"

So, I guess they are going to try to claim the 'Apple tax' on generic pc's as well.

And it'll kill their current advertising campaign, which counts on cheaply made computers. So Microsoft will basically force computer manufacturers to have smaller margins and cheaper components to maintain their pricing levels.

Ron Manke

August 1, 2009 11:47 AM

The next Mac OS upgrade will sell for $29.


Hmmm... should be interesting...

Grawlix

August 1, 2009 05:46 PM

Yes Steve. Apple did sell "only 10 million PCs" in the past year, but that compares to 9 million the prior year, 6.5 million the year before that, and 5 million the year before that. Not a bad trajectory.

OS X IN the Workplace

August 2, 2009 05:25 AM

I love my Mac Mini. It is the smallest Linux machine I own 8)
But it also still has OS X of course. I like that it is a commercially supported Unix, with all the poer of BSD with a nice X11 friendly desktop. On all my server I run Linux, and this saves enough I can get Macs for the desktops. Some of these happen to run Windows, but for a hardware support point of view, I can still buy the same format Mac for more than 24 months. Acer kept changing their hardware every 6 months. Someitmes completely different video cards, NICS, BIOS etc. Creating Windows Images for iMacs, I have only had one image for 18 months. All the apps we use are cross platform or browser based, and the users are free to choose which way they want to boot.
OS X relocatable home drive beats windows profile replication hands down for reliability and login speed. 8)
Mac Minis use all of the old Acer screens and keyboards we have, and massive power savings for machines that effortlessly sleep and resume without screwing up. Now if Only Apple could patch without reboots like every other UNIX I've ever used.

yl

December 28, 2009 04:19 AM

Are you looking for Model Toys? Do you know where to buy Model Kits and Model Aircraft? Here we recommend you a good online store to buy Model Ships & Model Boats, Model Military as well, it is a good chance to buy because Model Tank and Model Cars For Sale! This store has all the toys including Model Motorcycle and Scale Model Toys. What's more in there you can find Christmas Gifts even Model Transformers! a Cosplay Shop too, it sells Cosplay Costumes Naruto and Cosplay Mantle, as well as Cosplay T-shirts.

Pat

January 18, 2010 04:16 PM

Haha... Microsoft. What a joke. Anyone who likes to buy PC's might as well just go to the dump and dig through some trash. Your doing the same thing anyway, just paying for it. Ballmer... the best thing that has ever happened to Microsoft:)

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A blog on the daily doings of Apple and the many companies in its orbit, with insight and analysis by two longtime Apple-watchers BusinessWeek Senior Writer Peter Burrows and BusinessWeek.com Senior Technology Writer Arik Hesseldahl.

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