Eddie Wu, Managing Director of OEM Embedded Devices for Microsoft Asia, confidently predicted earlier this year that Microsoft would sell a minimum of 20 million Window Mobile units this year, but sadly, Microsoft has ended up selling some two million less. This has got to be a big disappointment and embarrassment for the software giant.
Of course, 18 million units is nothing to sneeze at, but the fact still remains that Microsoft ended up with pie all over their face - Blackberry and Apple pie that is! AppleInsider, in fact, is actually reporting that, "... Windows Mobile for smartphones -- slipped during the three-month period."
Clearly, one doesn't need to be a rocket scientist to understand why Microsoft failed to achieve their whopping 50% increase this year That, of course, would be in part to the massive publicity that was generated by the introduction of Apple's iPhone G3. The G3 iPhone has clearly resulted in lowering Microsoft's Windows Mobile projections - a very big impact, along with other factors such as the impact from smart phone leader, Blackberry, etc. Apple, on the other hand, looks like it will easily beat it's own forecast of selling some 10 million iPhone's by the year's end.
Apple's impact on Microsoft doesn't just stop in the area of smart phones either. Indeed, Microsoft is running scared of Apple because, under Jobs, the resurgent company is having a big impact in other important areas such as operating systems and computer sales as well. The Mac is back and not only that, Microsoft, despite it's wealth and considerable other key assets, has yet to make a dent in stopping the Mac's momentum, or, as they also promised, to make a dent in the portable music area of which Apple utterly dominates with some 70 % of the market.
Various web sites such as 9to5Mac are now reporting that Microsoft's 10k hints of Microsoft's very real and growing fear of Apple and it's impact on Microsoft's position in the market. Even though Microsoft doesn't name Apple directly, it is very clear who Microsoft is referring to when they state:
“A competing vertically-integrated model, in which a single firm controls both the software and hardware elements of a product, has been successful with certain consumer products such as personal computers, mobile phones and digital music players," Microsoft's threat assessment states, adding, "We also offer vertically-integrated hardware and software products; however, efforts to compete with the vertically integrated model may increase our cost of sales and reduce operating margins.”
Not only that, just recently Steve Ballmer, Microsoft's colorful CEO, fingered out Apple when he stated:
"In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience."
There you have it, straight from the horse's mouth. Microsoft, after years of bashing and putting Apple down as the 'little guy' is now, more than ever, showing it's paranoia over all things Apple. It's becoming increasingly more difficult for Microsoft to simply dismiss Apple as the inconsequential, 'little guy,' as Apple continues to keep hitting them out of the ball park with products and services like the iPod, iPhone, iMac and OS X, iTunes and QuickTime, the App Store, etc. It's also very apparent that the 'little guy' is having a very big impact on not only Microsoft's image, but also it's bottom line and it's market share as well as the resulting profits that they generate.
Microsoft is a company that seems totally obsessed with Google and now Apple. If anybody has the resources and manpower to take them on, or anybody else for that matter, it is big, old Microsoft. It is also obvious that they have every intention of doing so, but the question remains - can they do it successfully? Maybe, but, with Ballmer and the old guard still in place, it is highly questionable? So far, despite all of the boasting and rhetoric coming out of Redmond recently, there hasn't been much to gloat about! The Zune isn't exactly flying off the shelves, nor is Vista, to the contrary, doing as well as Microsoft would have us believe. Windows over all is actually losing market share to Apple's Mac OS X! Microsoft's upcoming 300 million dollar Vista ad campaign begs the question: "If Vista is doing so well - why the need to spend $300 million dollars to prove it?"
Apple clearly leads, while Microsoft simply follows, as can easily be demonstrated in Microsoft's attempt to revamp the Windows Mobile interface to mimic that of the iPhone's. Microsoft is not alone on that count - Symbian, among others, too is attempting to do much the same, as it seems that everybody these days is trying imitate Apple when it comes to design, be it in music players, all-in-one computers, phones, or what have you.
There are two main reasons why I feel that Microsoft is now in the state where they have to fear both Apple and Google. The first of these is that Microsoft has long been much more focused on capturing and maintaining the business market then that of the consumer market. As a consequence, Microsoft clearly finds itself in a desperate race to catch up with Apple in the consumer space and that of Google in search area.
Another reason seems to be the perception that Microsoft tries to define what the market does rather than simply allowing the market to define what it is that Microsoft does. By doing things that Microsoft really wants, it, in the process, ignores what the market really wants, and this, more than anything, is why Microsoft now has to fear both Apple and Google and why they are now struggling to catch up with them. Microsoft leads only in market share; Google and Apple, in turn, lead both in innovation and growth.
It is in the market place's best interests to see Apple, Microsoft and Google and others remain strong and competitive, but unless Microsoft starts to come up with newer and more innovative initiatives, I, like many others these days, are beginning to question whether Microsoft is even relevant anymore?
Does Microsoft have a reason to really fear Apple? Is Microsoft really relevant any more?
The answer to the first question is a definite yes! The answer to the second question will be determined on just how Microsoft responds to the first!
And that's my 2 cents 4 this Monday, August 04 , 2008.
Graphic via: 9to5Mac
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