Just a Reminder
Here is the far-sighted Steve Ballmer, from an interview on April 30, 2007, after the iPhone was announced but before its release:
There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.
Hard to believe that was just four years ago. In the same interview, he also called Apple a “one-trick pony” because it is “a hardware company.”
Today, Apple’s iPhone holds 27% of the cell phone market–ten times the 2% or 3% Ballmer predicted–and is challenged mainly by Android, an OS given away for free and used by many cell phone makers. Where is Microsoft? Fighting to remain relevant in the cell phone market, Microsoft’s market share is shrinking, currently at only 10%–down from about 40% when Ballmer gave the interview. What’s more, Neilsen, which came out with those ratings, noted that “an analysis by manufacturer shows RIM and Apple to be the winners compared to other device makers since they are the only ones creating and selling smartphones with their respective operating systems.”
Apple, in other words, is both a hardware and a software company–whereas Microsoft, ironically, is primarily a software company–far more of a “one-trick pony” than Apple. Apple, in fact, is branching out, as a reseller (the highly successful iTunes store now resells third-party music, video, books, and software), an advertising firm (iAds), and yes, is even starting to establish itself in enterprise solutions. Apple, in fact, is spreading out into new areas, while Microsoft is just struggling to hold on to what it has, and is shrinking in some areas. It is telling that despite Microsoft still holding perhaps 85-90% of the worldwide OS market share, Apple now has a market cap of $331.66 billion to Microsoft’s $218.06 billion.
One has to wonder if Ballmer still prefers his position to that of Apple’s.
Man Microsoft lost the plot when Ballmer took over.
Netbooks are going to slaughter their business model eventually — Google’s gunning right for them and there’s basically nothing they can do to remain relevant once netbooks become good enough for the general business environment.
I bought a WinMo 5 phone in 2006 and it was decent but only about 10% of what Apple delivered 2 years later with the iPhone.
Screen was high-density but small. Dimensions were really thick. Speed was rather slow. Required a stylus. UI was mostly Windows 3.1 era in presentation and utility. APIs were weak and there was no AppStore of course. Also, Windows Mobile was a fractured platform so I couldn’t even expect to sell software for the device I bought in the first place.
LAAAME.
The solutions Apple brought to the market 2007-2008 were simply stunning. They hit the mother of all home runs with the iPhone. What they did was obvious in retrospect but damn good business development and engineering at the time.
Kinda like how they made the Mac, come to think of it.
I remember. Before the iPhone came out here, I kept hearing about how incredible Japanese phones were. I only had the basic cheapo models up to then, so I wanted to see what the high-end offerings were. When I got to the store, I saw a whole bunch of regular models–keypad based–and quickly realized that these were a hassle to use and a bear to learn. Lots of features, but you needed to consult a manual if you didn’t use them all the time. A very steep learning curve.
I then asked about touchscreen models, and there were not many at all. The only ones they had ran Windows Mobile. When I saw it, I thought it was a joke; the menus and buttons were tiny, and even with a stylus, it was difficult to access things. Again, I was no noob to computer technology, but I couldn’t figure out how to use it very easily on my own.
That was when I concluded that the iPhone would do great in Japan, having seen reports and spoken to people who had used it.
Now, nearly four years after Apple blew away the market, Microsoft is finally closing in on a wider release of their mobile OS. At least this time, they seem to be doing it better than they did before–after Apple spent 4-5 years building a GUI from the ground up, culminating with the Lisa and the Mac, Microsoft slapped a quick & dirty interface on top of MS DOS and called it a GUI. Yes, Microsoft is using the Zune as a base for the new OS, but at least it looks like they took their time to develop it so it wouldn’t be a total joke when they released it.
The down side is, they’re four years late to the game, fighting now against a juggernaut pioneer and a popular mobile OS given away for free.
Yep, those innovators over at Microsoft are right on top of things, aren’t they?
Hi Luis,
I never understood how they calculate PC market shares. I read recently from a small research company that included the iPad as PC units sold and it turns out that Apple is nr. 3 in the US market. That’s an incredible result. I don’t understand why the other famous market research company’s don’t use the same criteria. If non windows based tablets start to invade the corporate sector, would this really affect the business model of Microsoft? After all the tablets will be an add-on and not a replacement of current PC’s I think, at least for now. Takce care. Frankie