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News

Steve Ballmer: “The Consumer Market Mojo is with Apple” [Update]

 Steve Ballmer
Steve Ballmer

According to Microsoft CEO Steve Ballmer, "all the consumer market mojo is with Apple," at least in the mobile phone market. The frank assessment came a midyear conference with analysts Tuesday in which Mr. Ballmer offered comprehensive look at the challenges and opportunities facing his company.

"The truth of the matter," Mr. Ballmer said, "is all the consumer market mojo is with Apple and to a lesser extent BlackBerry. And yet, the real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android."

In other words, Mr. Ballmer sees consumers as being interested in iPhones and BlackBerrys, whereas carriers and cell phone manufacturers are more interested in Windows Mobile, and now Google's Android platform. He did not connect the dots lining the path between Apple's growth and Microsoft's decline in this market.

Looking to the future, Mr. Ballmer stressed that he thinks cheap smartphones are the answer, an area where he feels Microsoft sits pretty.

"I think the guys who are in the best position to benefit are the guys who actually have phones at low price points," he said. "I think that's a distinct advantage that we have," characterizing the iPhone as a very expensive phone, even if carrier subsidies bring the price down.

Mr. Ballmer is also keeping his eye on Android for both cell phones and netbooks, saying, "I assume we'll see Android-based, Linux-based laptops, in addition to phones, and we'll see Google more and more as a competitor in the desktop operating system business than we ever have before."

He also noted that Windows Mobile was slightly unprofitable, despite the fact that it has more market share than Apple's highly profitable iPhone line. Also profitable is Windows, Desktop Productivity, Server, Enterprise Software, and Entertainment & TV. Windows Mobile and Search & Ads were presented as being slightly unprofitable and very unprofitable, respectively.

He emphasized, however, that his company would stay in the Search & Advertising business, saying that it was a market that is more profitable than a portal site such as MSN, FaceBook, etc.

Missing from his discussion was rhetoric about how Microsoft's business model was going to beat Apple's or Research In Motion's model of controlling most or all of the widget, a position that Mr. Ballmer has taken publicly in the past.

[Update: The article was updated with additional comments from Mr. Ballmer. - Editor]

3 comments from the community.

You can post your own below.

Intruder said:

He emphasized, however, that his company would stay in the Search & Advertising business, saying that it was a market that is more profitable than a portal site such as MSN, FaceBook, etc.

So he is saying it. as an unprofitable business, is MORE profitable than his other unprofitable business (MSN)? It is only slightly less dead?

And don’t we already have Linux-based laptops?

And market momentum by the carriers not equating to market momentum among customers is a real problem for MS. No customers means carriers don’t sell product.

This ship is definitely springing leaks.

   Quote

jbruni said:

Let me get this straight—The carriers and manufacturers would rather use Windows Mobile, but all the people with the money (i.e. customers) want iPhone and BlackBerry.

I may be on a limb here, but I’m betting on the customers winning this one.

   Quote

steveballmer said:

Don’t question me! What I have said is gospel people!

http://fakesteveballmer.blogspot.com

   Quote

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