Microsoft, terrified by Apple's success, looking deeper into the tablet market

[Mayareira]

http://media.techknots.com/steve-ballmer.jpg
- Steve Ballmer, Microsoft CEO

REDMOND, Wash. (CNNMoney.com) -- Microsoft Chief Executive Steve Ballmer said Thursday that the software giant is urgently working with its partners to unveil a host of tablet computers running Windows 7, to compete with Apple's fast-selling iPad.

At a meeting with financial analysts on Thursday, Ballmer outlined the company's strategy to catch up to Apple and Google in the consumer space. He said Apple is doing an "interesting" job with the iPad and has "sold certainly more than I'd like them to sell." As a result, Ballmer said his company's "job one urgency" is bringing Windows-based tablet computers to the market.

"No one is sleeping at the switch here," Ballmer said. "We have got to make things happen with Windows 7 on slates. We're in the process of doing that as we speak. As focused as we are on this, our partners are also focused on this to deliver systems and chips to make this happen."

But Ballmer declined to give an exact timeline, saying only that the tablets will be ready "as soon as they're ready" and "it ain't a long time from now."

The CEO claimed that Microsoft needs to take its time to get its products just right to compete in the intensely scrutinized tablet space. He said that chipmaker Intel (INTC, Fortune 500) will be coming out next year with a tablet-specific processor called "Oak Trail" that will help manufacturers make better tablets that run Windows 7.

Ballmer famously canned a turmoil-fraught Microsoft tablet project that had been in the works for almost a decade before the iPad came to market. With the early success of Apple's (AAPL, Fortune 500) iPad, many analysts are predicting that the tablet space will be one of the fastest-growing tech segments this decade, alongside smartphones. That makes Microsoft's urgency all the more palpable.

Ever confident, Ballmer exclaimed, "We're gonna sell like crazy!" Still, after the CEO outlined Microsoft's tablet plans, an analyst told Ballmer that it appeared that Microsoft had "no clear strategy."

Ballmer disagreed, saying Microsoft's tablets will run Windows 7, they'll run Intel processors, they'll be available in a wide array of shapes and sizes across many manufacturers, and they'll likely be cheaper than the iPad.

Some analysts remained skeptical.

"Microsoft will have to pull a rabbit out of a hat to compete with Apple," said Al Hilwa, applications development software program director at IDC. "Apple has a less-is-more strategy to broaden its consumer approach with the iPad. Microsoft is committed to running Windows 7 on tablets, which is a concern."

Microsoft's CEO focused his entire presentation on the company's consumer businesses, which are almost all trailing their competitors.

Bing continues to lose money. "I can't say there's a point on the horizon where the business results will flip," Ballmer admitted.

After demonstrating Windows Phone 7, which is set to go on sale in the fall, Ballmer said the company still had a lot of work to do to compete with Apple and Google. Microsoft intends to throw enormous marketing muscle behind the new smartphone operating system, riding the success of its "I'm a PC" campaign with an "I'm a phone too!" campaign.

Xbox is the exception. It's a consumer product that is finally making money for Microsoft, Ballmer said. The controllerless Kinect accessory will be closely watched when it goes on sale for the holiday season, targeting the Xbox's 42 million users.
The cloud around businesses

Other top Microsoft (MSFT, Fortune 500) executives mapped out the company's plans for maintaining its leadership in the corporate market, which makes up three quarters of Microsoft's business. Microsoft's lack of success in the consumer world tends to overshadow how well it is doing in the enterprise space.

It also doesn't help that Microsoft's primary strategy is relatively unexciting for the majority of non-geeks: The company aims to leverage its broad array of business products, massive data centers and experience in services to take a leadership position in cloud computing.

Still, Microsoft is confident that its success in the future will depend heavily on how well it carries out its cloud strategy with businesses. Chief Operating Officer Kevin Turner said the company's cloud offerings will help fuel physical product sales and noted that 70% of Windows cloud customers are new customers.

Turner lashed out at Microsoft's competitors like Google (GOOG, Fortune 500), Salesforce.com (CRM), Amazon.com (AMZN, Fortune 500), and VMWare for only offering only partial cloud services and solutions that he described as less than adequate for business customers.

The harshest criticism was reserved for Google's Web Apps, which compete with Microsoft Office. Turner said Office's Web Apps are far more powerful than Google's, calling to attention to small things like Google's lack of a ruler function on its Docs app -- "things that we put in market almost 13, 14 years ago."

He also shared several customers' complaints about Google's services and said a handful of companies that left Microsoft for Google are now coming back.

Unlike its competitors, Microsoft can offer companies a full set of cloud-based services, including managed data centers and business software tools in one package, Turner said.

Microsoft's cash cows also have room to grow. Windows 7 is selling faster than any other Windows version in history, but the vast majority of the company's customers are still using older versions of Microsoft software. Eighty-four percent of Windows users are running XP and Vista, 52% are using Internet Explorer versions 6 and 7, and 63% are using Microsoft Office 2003 and earlier.

Now that businesses are beginning to refresh their hardware again, Microsoft believes there will be a tremendous upgrade opportunity to Windows 7 and Office 2010.

http://money.cnn.com/2010/07/29/tech...dex.htm?hpt=T2

[Gredival]

inc. failure to realize the iPad only sells because it's part of the Apple lifestyle to have a giant iPhone

[Krandor]

Wired and similar magazines will try to convince you that tablets are the wave of the future and everyone wants one.

They also put Will Ferrell on the cover and pretend to be a serious publication.

Edit : in before the usual lols involving any thread with Apple and the OP

[Krandor]

http://www.youtube.com/watch?v=xi_1HHXCC30

Granted I would never buy a tablet computer, but I'd take a UI like that over rows of icons anyday.

[Zeh]

^I like my iPad and how the os is tailored to the new definition of a tablet, but I'd like more functionality in terms of apps, productivity, and customization. The tablet isn't a pc but it isn't an iPod touch either. I'm waiting for someone to create the perfect hybrid.

[Correction]

Gotta get someone other than May to start these threads, the topic is always flamebait.

[Kaisha]

inc. failure to realize the iPad only sells because it's part of the Apple lifestyle to have a giant iPhone

Pretty much, as tablet PCs have been on the market for years. Apple just has that 'magical' ability to make any product of theirs require every idiot's attention because they are their own market where 'competition' doesn't exist.

[Shojin]

Gotta get someone other than May to start these threads, the topic is always flamebait.

lol I saw the topic from the main page and instantly knew who the OP was.

[Weeks]

1. Let Ikea design the exterior and UI of a series of your laptop, tablet, and desktop computers.
2. Sell them for twice what they cost to make.
3. Apple is making nothing but cellphones within a year.

[Cephius]

Market share by operating system, July 2010:

Windows XP: 61.87%
Windows Vista: 14.34%
Windows 7: 14.46%
OSX 10.6: 2.48%
OSX 10.5: 1.82%
Other: 5.03%

Yeah, terrifying.

[Hyan]

lol I saw the topic from the main page and instantly knew who the OP was.

This, pretty much.

[Cephius]

How does Windows Vista, universally panned as the worst operating system since ME and outdated by a version, STILL have more than 3 times the market share of both OSX versions combined? That's the only thing that comes off as terrifying to me.

[Krandor]

How does Windows Vista, universally panned as the worst operating system since ME and outdated by a version, STILL have more than 3 times the market share of both OSX versions combined? That's the only thing that comes off as terrifying to me.

Because the other 96% of the world not running OSX just isn't with it.

[sruon]

inb4 next generation console made by apple and sony/microsoft/nintendo terrified.

I can even guess who will make the thread.

[Mayareira]

Eh, it is pretty unfair to blame me for Apple bias. Read the article and you'll see how accurate the title is.

Also, Apple is now the greatest tech company.

[Fhloston]

lolApple.

Don't see the big deal with this tablet PC craze. Stick with laptops.

[Cephius]

lol, oh man. Talk about rose-colored glasses.

[Salodin]

Is it ok for me to compare how Apple surpassing Microsoft as the greatest tech company is similar to how McDonalds is the greatest food restaurant?

[Julian]

Pretty much, as tablet PCs have been on the market for years. Apple just has that 'magical' ability to make any product of theirs require every idiot's attention because they are their own market where 'competition' doesn't exist.

This.

Except an Ipad isn't a computer. Nor is it a Tablet laptop. It's an oversized fucking iphone without the phone/itouch.

[Mizango]

How does Windows Vista, universally panned as the worst operating system since ME and outdated by a version, STILL have more than 3 times the market share of both OSX versions combined? That's the only thing that comes off as terrifying to me.

Thanks you Ceph lol. lol @ anyone being terrified by the joke of an iPad, OP reeks of Apple fellatioism.