Steve Ballmer made a calm and collected presentation about Microsoft’s consumer focused efforts to analysts today.
The key points:
- Windows 7 is smash hit and people will be buying hundreds of millions of PCs.
- Microsoft fell behind in slates, but it’s going to change that.
- Windows Phone 7 will be great, and it will work with the desktop beautifully.
- Xbox is making a nice profit and it’s a huge social network.
- Look for more retail stores from Microsoft. The do a good job of showing off Microsoft’s products and they make money.
Here’s our live transcript of Ballmer’s remarks. The full transcript should be up soon, here.
Here we go!
4 PM: Ballmer is out and talking. He’s going to talk about the consumer businesses. Interesting, maybe he’ll be addressing iPad competition.
4:04: “Where are we with the consumer, and where are we going with the consumer?” The consumer investments and innovation is around Xbox, and the television, what we’re doing in phones, search in Bing, it’s Windows! Over 2/3rds of the 400 million PCs that will be sold will go to consumers. Then there’s Office.
4:05: There’s more areas a company could go after, but we’re focused in a set of areas we think have big potential. I want to talk about each of these. Start with Xbox.
4:06: When will Xbox make money? Well, we dug a little hole, maybe bigger than you would have liked, but we’re out of it now.
4:07: “We now have over 42 million XBoxs out there and over 25 million of those are connected up to our XBox Live servers.” Speaking with a media executive, he was impressive with Xbox Live. It’s a big audience.
4:08: Kinect is a pretty interesting, important product I’m proud about. If you look at the remarks from critics, it’s a “wow” kind of a thing. Key thing is that it can broaden out the product. Been good at going after the hardcore gamer, now we can go after others.
4:10: Xbox is socially connected, we want to drive that to many many many more living rooms over time. We think this is going to be an exciting Christmas, but I want to give out NO forecasts to anyone.
4:11: Next up: Bing! It’s had a year of progress. Stunning it’s only been 13 months. Grown market share 40%, may not be many share points, but total vloume of queries is double. It’s a lot of infrastructure, the volumes that we’re learning and the scale, it’s helping us learn what to do.
4:12: We’ve had a frequent cadence of releases. Look at shopping, local, travel, finance. Glad to see Google emulating us in some ways, form of flattery. We’re not confused, it’s a lot of work. Not confused investors see the big price tag. To which I say I told you we have a range, and I like the progress, but it’s going to take a lot more. We’re driving hard. We want to drive in mobile. Look at Bing in iPhone, we think we’ve done the best work anyone has done.
4:13: Expect to see really interesting work. We have brand buzz, it’s a younger crowd. People are moving to try a new and fresh approach. it’s not search, it’s how you get things done.
4:14: Third: Office! It’s a big big deal for us. It is a consumer product. A lot in this release that’s innovative. Job one, though, is to make these products simpler.
4:15: Set of technology we have to embrace, the web, mobile, touch, social networks. We’ve brought them into Microsoft Office. There’s other add-ons like One-Note. Note taking is an application where there’s room for work. New features in all the applications. Kevin Turner in a PowePoint presentation he gave has bragging about all the new transitions.
4:16: Our web service is free of charge, investors ask is this a problem? I think people will pay for things that make them more productive. At the same time, people will pirate things. Not just in China, a student near you. We’re trying to broaden our offerings to have something people will pay for and some simple things for free. We have business model innovation for the consumer, which I am optimistic about.
4:18: Now it’s onto number 4, the most important: Windows. It’s a tide that floats all boats. Suffice to say I didn’t like everything about Vista. Windows 7 is another story. Sales are skyrocketing. We have a team to repeat the success of Windows 7, we have the PC market growing. The notion that 400 million computers sold in 2011 is unbelieveable. This is the most popular smart device on the planet today. Maybe it will be phones later, but this is the number one today.
4:20: Perhaps the most surprising is how well we’ll done on a market share basis. We’ve built laptop share from 90% to 93% in the last few years. We’ve picked up share…we’ll talk about slates and tablets and blah blah blah, but we’re happy with the growth of laptops.
4:21: People go from super excited about Windows 7 to I’m worried about the future, but I think it’s important to take a pause and think about it.
Now Ballmer is talking about Windows Live and other Windows features…says he edited a video of a trip to Africa. He says Microsoft is as good for creative stuff as Apple.
4:24: Windows is everywhere. It’s in gas pumps, lights controlling stadiums, etc. But for consumers…Microsoft went from no Windows in netbooks to being the guiding piece of software. Thin laptops, gaming PCs, TVs, etc. We have the widest array of form factors.
Today, one of the top issues on my mind, hey there’s a category — tablets. Apple has done an interesting job. They’ve sold more than I’d like them to sell. We think about that. So it’s our job to say, we have got to make things happen. Just like we made things happen with netbooks, we have to do that with Slates.
We’re tuning Windows 7. Yeah, you’ll get cacophany. We have software, the user base. We’ll get a boost after the new year when Intel brings its oaktrail product to market. And as focused as we are, our partners are focused too.
4:27: We think about these devices. Not one size fits all. Been to too many meetings with journalists struggling to set up iPads for notes. We’ve got to push with our hardware partners…as soon as they are ready. It is job one urgency. We are working with those partners to deliver something people want to go buy.
4:28: We’ve invested in touch, in ink. Mark up annotation, you’ll see us try to bring it together to deliver slates and convertibles people will be excited about.
4:29: Now he’s bringing up Brad Brooks, then he’ll be back to talk Phone.
4:31: Starting this fall, Windows personal cloud will be available to Windows users and Windows Phone users.
While Brad is demoing products…we just need to say Ballmer is doing a good job. He’s calm and cool, making a persuasive case, unlike other times we’ve seen him.
4:52: FYI, we’re still live, but this is just a demo of how Microsoft’s phone and desktop will interact. It looks good. It will definitely add some pressure to Apple and Google.
5:06: And we’re back with Steve…Devices from Samsung, HTC..How are we going to do? Fair to say we have a lot of work to do. But there’s a good opportunity, kinda designed the core hardware, the chassis, so the OEM can work on top of that. I hope you get a sense of what we’re doing on other portable devices. Like the so called slate.
5:08: We’ll get aggressive marketing for the Phone all within the boundaries of our Op Ex guidance.
5:09: I want to end with remarks about our stores. Partly because I want to talk about the stores, partly to talk about an evolved attitude. We can’t accept artificial roadblocks. (The Dell we’re using is going buggy…and Ballmer’s speech is blinking out.)
5:11: We want to make sure you can see the latest and greatest. The store might not be a profit driver, but it is a great way to display the latest and the greatest. We’re going to be opening more stores in Chicago, Mall of America, Bellvue. We’re going to keep making openings and drive this. It’s a key part of the strategy.
5;13: Thank you very much, I’m handing it over to the CFO.
See Also: 10 Reasons You Should Love Microsoft