“There were two interesting Windows-related news stories last week. First, Joe Wilcox’s story on a report from NPD claiming that 91 percent of $1,000-and-higher retail computer sales now go to Apple. Second, Microsoft’s quarterly financial results, in which revenue fell $1 billion short of projections and declined 17 percent year-over-year,” John Gruber writes for Daring Fireball.
“What is particularly alarming about Microsoft’s numbers is that revenue from its Windows PC division suffered an even greater year-over-year revenue decline than the company as a whole: 29 percent. One explanation for that is that Windows 7, a major new update, goes on sale in October, and so it’s expected, somehow, that Windows revenue would decline in the months preceding its release,” Gruber writes.
“But Microsoft’s operating system business is not new, and it has never been particularly cyclical. Windows revenue, prior to this just-completed quarter, has only ever gone in one direction: up,” Gruber writes. “Windows is at the core of everything Microsoft does that makes money. They sell Windows, then they sell software that runs on Windows. As Windows goes, so goes Microsoft, and right now Windows is heading south.”
Gruber writes, “One argument is that the fault lies with the global economy, not Microsoft itself… [but] Apple operates in the same economy Microsoft does, and Mac sales are up. And the numbers from the aforementioned report by NPD are simply astounding.”
“Apple’s strong growth in this segment is a sign that the market is turning against Windows. If for no other reason than that Apple has never entered the low-cost computer market, it’s always been the case that the most budget-conscious computer buyers were Windows users. But the converse wasn’t true — not all Windows users were cheapies,” Gruber writes. “Today, though, Microsoft is increasingly left only with customers whose priority is price.”
“Microsoft’s core problem is that they have lost the hearts of computer enthusiasts. Regular people don’t think about their choice of computer platform in detail and with passion like nerds do because, duh, they are not nerds. But nerds are leading indicators,” Gruber writes. “This is true in many markets with broad appeal, not just computers. Microsoft is looking ever more so like the digital equivalent of General Motors. Car enthusiasts lost interest in GM’s cars long before regular people did; the same is happening with Windows.”
Gruber writes, “And in mobile software, the fastest-growing segment of the computer industry, Microsoft’s platform is both inferior and unpopular. Their plan to address this is to change its name.”
There’s much more in the full article – recommended – here.
MacDailyNews Take: We searched our database to find our first reference to “General Motors” in a MacDailyNews Take. Here it is, from January 10, 2005:
As we have always said, even as many short-sightedly waved (and continue to wave) the white flag, the war is not over. And, yes, we shall prevail. For the naysayers: In 1929, Ford held just over 61% of the U.S. market for automobiles. GM’s market share stood at just 12%. Ford was thought to be invincible, with GM regarded as a niche auto maker. Probably, some analyst at the time said, “The reality is, long term, GM will always be a niche player.” But, in 1936, just seven years later, Ford held just 22% of the market for new automobiles while General Motors held a 43% share. No company is invincible. Not even Microsoft.
At the time, some laughed. Who’s laughing now?
I was just reading this article again this morning – very well written article with lots of food for thought.
Two other key stories this week:
Firstly, rebranding of Microsoft Mobile 6.5 to Microsoft Phone; as apparently they’ve just worked out that all the versions numbers and stuff confuse customers.
Secondly, the epic fail of the launch of the Microsoft App Store.
http://www.theinquirer.net/inquirer/news/1495483/developers-dish-dirt-mobile-marketplace
Close the windows, lock the door.
Great article. Microsoft should be very worried. If the “cheaper is better” argument isn’t working at a time when the economy is so bad, how is going to work any better when the economy starts to pick up again?
“Beleaguered Microsoft in decline; Windows-maker the digital equivalent of General Motors”
That is total BS.
GM makes at least one model worth owning.
…don’t they?
Yeah, the alphanerds have spoken.
Where’s ZuneTang when you want him?
=:~)
And in mobile software, the fastest-growing segment of the computer industry, Microsoft’s platform is both inferior and unpopular. Their plan to address this is to change its name.
THIS IS PRICELESS!!
“Who’s laughing now?”
Well Steve Ballmer seems to laugh a lot these days. But I don’t think it’s a healthy laugh. It’s more like a padded room laugh.
@shen,
Good point!
@Chas,
Hmm… ZT’s been conspicuously absent with all the good news for Apple fans, lately. Hmm…
Anybody wanna buy an Edsel?
Microsoft’s operating system has never been particularly cyclical. Yup, it’s all valley. No peaks.
Joe just got crossed off the MS Christmas party list…
Calling any product by a thousand version names is better than calling it ‘Microsoft xyz’. That name IS the problem.
Microsoft isn’t worried. It has a coating of hubris so thick that nothing can penetrate, not least customer opinions…
Things are looking amazing for Apple. All our good work over the years is really starting to pay off. Our problem will be not to rub the noses in the dirt of those that told us how ridiculous we were!
Excellent article, to which I would add a single word:
“And in mobile software, the fastest-growing segment of the computer industry, Microsoft’s platform is both inferior and unpopular. Their plan to address this is to change its name.”
Again.
Anybody else remember WinCE?
Only a marketing guy would think that a name change would fix Microsoft’s Mobile software.
Hey it worked for Vista SP 2.
I always thought of computer like cars. When you buy are a car you don’t want to buy a just because it’s cheap. You buy it as something you can rely on to get you to work without having to take it to the shop every week just to keep it running. Most Smell and HPeed computers are the equivalent of cheap cars, running on a Windblow$ engine. If you’re using anything with Windblow$ running it get your thumbs ready for hitching that next ride.
Beleaguered ?
A G A I N ?
Reminds me of that oldy goldy by our favorite CEO jumping around on stage …
Beleaguered Developers Beleaguered Developers Beleaguered Developers Beleaguered Developers
Now, for anyone who missed last night’s show about Beleaguered Sprint
Let’s bring you up to speed with various alternatives that fit nicely with Today’s Subject …
hard-pressed, troubled, screwed, in difficulties, in the shit house, under pressure, up shit creek, under stress, up to their neck in shit, with one’s back to the wall, totally fucked, in a tight corner, snow ball’s chance in hell, in a tight spot, so fucking screwed, up against it, up to their ass in alligators, beset, screwed to the max, assailed, don’t have a rat’s ass chance, besieged, taking it up the poop shoot, under siege, screwed beyond all belief, blockaded, fixing to take one in the ass, surrounded, deep in the shit, encircled, ain’t got a chance in hell, beset, fubar, hemmed in, in the crapper, under attack, about to kiss their ass goodbye, hunkered down, out of gas, locked their keys in the trunk, going the wrong way on one way street, lost their keys, headed down a dead end road, took the wrong exit, flirting with disaster, in some serious shit, on the highway to hell, used up all their brownie points, pissing into the wind, pissing up a tree, woofing up the wrong tree, without a map, without a clue, totally clueless, brain dead, on their last breath, on their death bed, up against the clock, on life support, got their tit caught in a wringer, don’t stand a chance, in the shit, covered in shit, in some deep do do, gonna get reamed a new asshole, fixin’ to lose it, and does anyone there know what the fuck they’re doing cause they’re in such serious trouble they don’t know whether to shit or go blind
Many of those came from Day One at Boot Camp, get back later with Day Two
BC
Saw an Edsel out in the wild just the other day. Very vaginal front end. Maybe that was the reason that it didn’t succeed.
The word “Beleaguered” is so over used on this site. Do you not know any other verbs? Did you only learn one big word in college?
“The word “Beleaguered” is so over used on this site”
First time here…?
If you haven’t found out already, the word is very much the favourite for majority of visitors. We wouldn’t want MDN to drop it for anything in the world. If you like MDN, but don’t like the word, you’ll just have to pinch your nose while reading it…
@Anynewvocab?
Or maybe it is just dramatically underused by other sites, ever thought of that?
Oh, and speaking of college: Do you really think it’s a verb?
MSFT was there when I needed it. When I came late to computers, most friends had Macs, but faced with a lousy choice between an itty bitty BW screen and a very high price, I turned instead to Northgate computers and Windows 3. I loved my two Northgates and then, when they went bust, my two Microns. I upgraded the OS promptly, not attracted to the new, but repulsed from the old. Meanwhile, friends valiantly struggled with the obsolescent Mac OS 7, 8, and 9. I hung onto my last MIcron and Windows 4 until switching to OS10.1.
As many have noted, MSFT’s monopoly OS business seems run by suits, devoid of inspiration, succeeding by repulsion rather than attraction. Windows XP SP2 doesn’t suck. Neither does Vista or 7. MSFT has plateaued. I cannot envision returning to them.
But look at what they have accomplished! I recall that the 1990’s were to be the decade of Japan. The US was finished as economic leader. Instead MSFT led the US to a resurgence built on hi tech; meanwhile, Japan’s real estate bubble burst. The next two decades were ours!
Now it’s supposed to be the decade of China. We’ll see. MSFT is done. Other companies in the US would have to do the heavy lifting. It won’t be Apple; they’re not into mediocrity in the service of monopoly. MSFT was there when for me, and for the ecomony, when we needed it. I regard it fondly, from a distance.
(Posted also the wrong article; sorry for dup.)
hakalautom
Something you allude to is one of the Big Problems with USA, imho
“Decade of Japan” or “Decade of China”
Our U.S. Gerbil Attention Span is Quarterly and Annual Reports, so a Decade is a “long time”
While China, Japan, many other Nations and Cultures
Think Centuries or Millennia
imho
BC
Yes, it’s a verb.