He’s at it again.At Microsoft’s Worldwide Partner Conference, Steve Ballmer declares war on Apple.
Per the Washington Post, he says, “We are trying to make absolutely clear we are not going to leave any space uncovered to Apple…”
Why are most people yawning about this declaration? As Yogi Berra is famous for saying, “It’s Déjà Vu, All Over Again.”
We have heard this many times before
Here are some headlines from the recent past of companies that have declared war on Apple.
- RIM’s PlayBook Marketing Campaign: Amateur Hour Is Over
- HP’s TouchPad: an Apple iPad killer?
- Nokia declares war on Apple iPhones and Android devices in US
- Google Declares War on Apple!
- Samsung Declares A ‘Size War’ With Apple
For all those companies, here is the current reality. Apple is firing on all cylinders right now. In Forbes, Eric Savitz says that Apple has a 63% share of the tablet shipment market. As Thomas Hazlett points out in his recent Wall Street Journal post, the iPhone commands a 73% share of all smartphone profits. Most importantly, Apple is not standing still. It has the culture, momentum, and systems in place to continue innovating and executing. Putting it all together, Apple still reigns as the world’s most valuable brand. Yes, some believe that since Steve Jobs is no longer in the picture, Apple’s best days are behind it. There is no evidence of this to date.
Couldn’t Microsoft be the one?
Microsoft is a very powerful and profitable company with enormously talented people and a lot of money in the bank. It has at least two cash cows – Office and Windows. Couldn’t Microsoft do what others have failed to accomplish? Microsoft could. Unfortunately, the likelihood of this happening is similar to boiling water and having it freeze. Why? It has at least three 3Cs working against it.
What 3 Cs make it unlikely Microsoft will defeat Apple in Ballmer’s declared war?
Corporate Image, credibility, and culture are the 3Cs that preclude Microsoft from overtaking Apple right now.
Corporate Brand Image. Since Bill Gates stepped down as CEO, Microsoft’s shares have tumbled by a third. As Tim Schiesser notes in his neowin.net post, $100,000 invested in Microsoft stock 10 years ago is now worth $69,000 (note he said this over a year ago). Since Mr. Ballmer has been in charge, Microsoft has been a follower rather than a leader in at least two very important markets – search (dominated by Google) and mobile computing (dominated by Apple and Google). And, under his watch, Microsoft put one of its cash cows on life support with the Vista disaster. His declaration of war on Apple seems to be another move to follow rather than lead.
Credibility. Ballmer’s own image hurts rather than helps. Whether he is speaking at the CES show or at a Microsoft conference, many have been disappointed, and in some cases horrified, by the image he projects when he gives presentations. His declaring war on Apple will be discounted by many that have heard his chest-thumping pronouncements before. If his CEO performance metrics were better, the marketplace might look the other way. However, ever since David Einhorn (the manager of the Greenlight Capital fund that owns 9.07 million shares of Microsoft stock) suggested that Steve Ballmer should step down, Mr. Ballmer’s credibility has been seriously compromised.
Culture. Many believe that the Microsoft is so big and bureaucratic that it does not have what it takes to compete with Apple and Google, which are big companies that act more like start ups. Two years ago, Dick Brass, a former Microsoft Vice President, wrote an Op-Ed piece in the New York Times that says of the Microsoft culture…”it has created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence. It’s not an accident that almost all the executives in charge of Microsoft’s music, e-books, phone, online, search and tablet efforts over the past decade have left.”
Declaring war is not enough
Steve Ballmer declaring war on Apple is one thing. Fighting the war and winning is another. Since we have all heard this before from Microsoft and others, pardon me for being a little sceptical about this latest declaration even if Windows 8 and the Surface Tablet live up to the promises Microsoft has made.
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