nick's view: Microsoft's Ballmer Doesn't Believe The (iPhone) Hype

Posted 02/25/2009 at 5:58:27pm | by Lisa Weddle

ballmer Following a recent spate of layoffs, Microsoft CEO Steve Ballmer assured analysts that Microsoft would endure the economic downturn by following such models as RCA during the Great Depression, preferring to spend money now on research and development with an eye to dominate the market once the economy rebounds.

Part of the plan is a January 2010 release for Windows 7. A heavy advertising blitz will promote the new operating system as well as the release of Office 14. We may soon be seeing Microsoft stores across the mall from Apple stores as the Windows company plans to open retail establishments of its own.

In his address, Ballmer acknowleged Apple's one percent gain in market share over the last year and the rising open-source alternatives.

"We're very focused on both plle as a competitor and Linux as a competitor," Ballmer said, accordng to CNET. "I think the dynamics with Linux is changing somwhat. 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 buisness than we ever have before... the seams between what is a phone operating system and a PC operating system will change, so we have ramped our investment in the client operating system."

Yet, Ballmer claims to be not very impressed with the iPhone, which harnesses 51% of mobile web traffic, nor Research In Motion's BlackBerry platform, stating, "The real market momentm with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android."

Despite his dismissive stance, Ballmer still couldn't deny the growing competition in mobile software sales, such as Apple's iPhone App Store and the growth of ecosystems with software, hardware, and services bundled together - which Microsoft has not been interested in, instead partnering with existing device makers.

A major focus of Windows 7 is making it work well on the mini-laptops known as netbooks. Microsoft will offer a Windows 7 Starter Edition optimized for netbooks while at the same time making efforts to convince netbook customers to pay more for full-featured versions of Windows 7. Microsoft says that the Starter Edition will run just three apps at a time and lack the Aero Glass user interface that defines both Vista and Windows 7.

Microsoft will also continue its battle against Google for web search and advertising market revenues, despite the fact that previous attempts to takeover these markets have failed.