Ballmer defended his company’s model after Apple (NASDAQ: AAPL) called it antiquated. “The PC as we know it will continue to morph,” Mr Ballmer said. In other words, machines can evolve enough to be useful to hundreds of millions of people.
Microsoft is competing in a world in which “computing” devices are getting smaller and less complex. Smartphones such as the Research-in-Motion (NASDAQ: RIMM) Blackberry are an example. The other new and perhaps powerful competitor to PCs is the Apple iPad tablet which runs Apple’s OS, and a number of new devices that run the Google Android open source operating system.
But, PC sales are exploding. Gartner expects them to be up 23% this year. The increase is due to the replacement of old computers and a desire of consumers and businesses to upgrade to Windows 7. Small, inexpensive netbooks are also bolstering PC sales.
Ballmer is gambling, perhaps intelligently, that small and underpowered portable devices cannot do many of the things that PCs can, particularly running a number of functions and “windows” simultaneously. Even the Apple Mac Leopard OS does those things. Mac sales would likely be tiny without those features.
Ballmer can claim to have consumer behavior, perhaps more than two decades of it, on his side. And, he has a PC sales trend that supports the ongoing claim that Windows, not matter how ancient, will be critical to the future of computing.
Douglas A. McIntyre
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