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.