Check out this a quote from Steve Ballmer as he discusses touchscreens and the lack of multi-touch in Windows Mobile:
Windows Mobile 6.5 has touch on it. The way Apple does touch drives cost. [The] way they do it on the iPhone is not an inexpensive component. We’ll do it in a way that you can afford to do it on most phones.
Coming from Microsoft, this quote makes a lot of sense. I mean, if you’re focused on things like making phones affordable, you often do so at the expense of making them attractive and compelling. That isn’t a knock against Microsoft, though, as that’s a viable business strategy a number of companies implement to great success. It does, however, help illustrate Microsoft’s business model: Volume over superior quality. That’s not to say that Microsoft’s products are crappy, because that’s hardly the case. It simply means that when volume is your number one metric, you necessarily have to make qualitative product compromises in the interest of increasing sales volume. When it comes to smartphones however, that decision can be costly.
Typically, purchasesr of consumer electronics can’t tell a huge difference between high quality and average quality products. Take HD TV’s, for example. Westinghouse can make some decent money selling average quality TV sets because to many consumers, the differences between a Westinghouse and Sony HDTV aren’t great enough to warrant doling out the extra cash. The problem that Microsoft has is that the difference between Windows Mobile and a device like the iPhone is so apparent and tangible, that the iPhone almost jumps out as something from a completely different product category.
Microsoft has played the volume game masterfully for the better part of two decades. When it comes to smartphones, however, quality seems to be the name of the game.
March 21st, 2009 at 7:15 pm
“That’s not to say that Microsoft’s products are crappy, because that’s hardly the case.”
On the contrary, that’s exactly they case. The hardware they make that costs over $100 (i.e., excluding mice and keyboards) is a disaster. In order to sell their red-circle-of-death X-Boxes they have to lose over $100 on every one they sell, meaning they have lost hundreds of millions just to try and control the market. Their current OS has been a horrendous failure, and only looks good because they list every computer that sells with an MS OS–even if it comes with XP–as a Vista sale. Their Zune has been a disaster. The developers who used their music system were sold out and deserted by MS. Office is a bloated mess that more and more people are deserting.
MS really began with DOS, a port of another OS. People say that “DOS” stands for “Disk Operating System.” What a farce! It’s a computer operating system. Why do they call it DOS? Because it was based on Q-DOS, which actually stood for “Quick and Dirty Operating System” (itself a rip-off of CP/M. “DOS” means “Dirty Operating System.”
That is their goal. Quick and dirty. Doesn’t matter how bad it is. Doesn’t even matter if it works. Treat it like breakfast serial and sell it like it’s good for you, even if it’s nothing but crap.
March 22nd, 2009 at 8:58 am
You have to feel sorry for Ballmer…ok, maybe just a bit.
In the days when Apple were going backwards, it was an easy target for MS to lampoon and consign to the rubbish bin of history along with all the other failed early IT greats. MS could point to other’s failure – particularly Apple, and say ‘we are different and therefore a success. This nicely glossed over their shortcomings. Sales were huge, the money rolled in and nobody questioned them very closely on their products or strategy… it was another world.
Move on ten years and it’s a different world.
Apple is firing on all cylinders again with a string of products that MS could never hope to match or outperform since their strategy is so rooted in their early success. The trouble is, MS, Ballmer and Gates before him, still use the same rhetoric from a decade earlier. But Apple, the IT pundits(with a few laughably notorious exceptions) and Joe Public have moved on. Those same declarations about Apple are irrelevant and MS are constantly being called out in a way which never happened before. They now sound like reasons for failure instead of a recipe for success.
All those who were content with ‘good enough’ solutions can now see that there are alternatives which are better and worth the extra entry price. Apple must be grinning themselves all the way to the bank as MS aims it’s blunt arrows at the same ten year old target. In Job’s own words…”Apple aims at the place the ball is going to be, not where it is or has been”
MS’s real opposition is the expectation of their own captive market. The idea that for MS to succeed, Apple must fail, is hopelessly wrong in the 21st century.
They have to start matching, then exceeding users expectations. Apple is fully on board with the concept but I’m not sure MS/Ballmer even understands the need to do so.
A long slow decline bolstered by captive market sales seems the likely future for MS.
March 22nd, 2009 at 3:13 pm
Would I rather live in a mud hut that is “good enough” or a detached house with an upstairs and central heating? The mud hut is going to be cheaper to produce than the house, but which would I rather live in?
Balmer pretends he doesn’t get it (I hope) when in reality he is playing tired old marketing tactics from the 20th century.
Let’s hope Microsoft’s recently announced annual R&D budget of $9 billion helps them innovate their way back to relevance – but I suspect we all know how this story is really going to end.