Microsoft CEO Ballmer Sounds Off on Google, Apple, Netbooks

Microsoft CEO Steve Ballmer took the opportunity of his annual Financial Analyst Meeting July 30 to defend his company and lash back at opponents such as Apple.

"We are going to come under attack," Ballmer said, characterizing Microsoft as "deserving" of its increased competition.

However, Ballmer was quick to point out to analysts that Microsoft and Windows remain strong in the market despite the recession and industry challengers. Indicating that he had taken note of the number of Macs in use by the audience, he joked: "Feel free, as long as you're using Office."

Apple's gains in the hardware arena, he insisted, did not threaten Microsoft's market share.

"Apple's share, globally, cost us nothing," Ballmer told those assembled. "You can't be high-priced. That doesn't get us to the high volume that we aspire to."

In an echo of July's Worldwide Partner Conference, Ballmer argued that Microsoft's new ad campaign, which focuses on the relative inexpensiveness of Windows PCs, was having its intended market effect. A chart labeled "Windows Ads Are Working" claimed more 18-to-24-year-olds are deciding that Microsoft products offer the best value over Apple; the graph had Microsoft with roughly a 42 percent "value" share in May, one month after the Microsoft ads started running, versus Apple at 14 percent.

Ballmer also took aim at Google, which dominated the news earlier in July with the announcement of its Google Chrome OS, a browser-based operating system designed for cheap mininotebooks or netbooks and scheduled to roll out in 2010.

"I don't know what Chrome OS is yet," Ballmer told the audience.

"We have competitors who say they believe in thin clients. What they are really saying is they believe in the browser operating system," he added. "But don't think there is some magic technology, [a] revolutionary thing that they believe in differently."

Indeed, much of Ballmer's speech seemed to center on a belief that the high-powered PC, with an operating system residing on its hard drive, will continue to be the way of the future—despite Microsoft's implicit embrace of the cloud-based model in initiatives such as Office 2010.

In that vein, Ballmer took aim at netbooks, which many analysts and industry pundits have seen as eating away at Microsoft's operating system margins.

Insisting that customers want bigger screens, Ballmer said new ultrathin PCs would roll out later in 2009 that will provide lightweight computing at presumably a higher cost—and that could very well run versions of Microsoft's upcoming Windows 7 that offer the company higher margins.

"We want people to be able to get the advantages of lightweight performance and be able to spend more money with us" as well as various manufacturers, Ballmer said.