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Ballmer: we should have moved to tablets earlier

Ballmer

By Reuters

Posted on 29 Nov 2012 at 09:09

Steve Ballmer has admitted Microsoft was too slow moving into the tablet market, as the CEO defended his company's record on innovation and financial performance at the annual shareholders' meeting.

Bill Gates, co-founder and now chairman of the world's largest software company, was one of the first to champion tablet-sized devices more than ten years ago, but Microsoft failed to come up with a successful product. Gates was silent throughout the meeting, attended by about 450 shareholders.

"We're innovating on the seam between software and hardware," said Ballmer, asked why his company had fallen behind rival Apple. "Maybe we should have done that earlier."

We're innovating on the seam between software and hardware - Maybe we should have done that earlier

Microsoft launched its Surface tablet last month, but has not revealed sales figures.

In the tablet market, "we see nothing but a sea of upside," Ballmer said, an acknowledgement that until now Microsoft has effectively had zero presence in the tablet market.

"I feel pretty good about our level of innovation," he added.

Ballmer said smartphones running Microsoft's new Windows software were selling four times as much as they did at this time last year. Microsoft has never given sales numbers of Windows phones, primarily made by Nokia, Samsung and HTC.

Windows currently has 2-4% of the global smartphone market, according to various independent data providers. Its overall market share will not likely grow in proportion to its own sales, given that sales of other smartphones - mostly running Google's Android system - are also growing quickly.

Share price

Ballmer, flanked by Gates and CFO Peter Klein, was asked by several shareholders to explain Microsoft's lacklustre share price, which has been stuck for a decade, and has been outperformed by Apple and Google stock in recent years.

"I understand your comment," he told one shareholder. He went on to explain that Microsoft had "done a phenomenal job of driving product volumes" and was focusing on profiting from that growth.

He suggested that whether investors recognised that value at any given time was out of his hands. "The stock market's kind of a funny thing," he said, adding that Microsoft had handed back $10 billion in dividends and share buybacks to investors in the last fiscal year.

Microsoft's shares rose almost 18 percent during fiscal 2012, which ended in June of this year, compared with a 3% rise in the Standard & Poor's 500.

Despite such fluctuations, Microsoft's shares stand around the same level they did ten years ago.

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User comments

Maybe we should have done that earlier..

Yes maybe you should have done. Considering the original ipad was a runaway success and they're on version 4. Android tablets are now taking off and Amazon have a pretty successful tablet on their hands. Microsoft is just too slow. They're nowhere In the mobile arena and yet they practically invented the smartphone concept. They sat still too long.
Exactly the same has happening with TVs. They had Media Center long before smart TVs or Apple TVs were thought of yet they never licensed it to TV manufacturers and its all but dead now. Too slow.
IE was too slow in developing web standards and so bled market share. Web designers today have to put in fixes for things that IE 9 doesn't support correctly.
The truth is Microsoft dominated the market 6 years ago before the iPhone was revealed and they sat still. I'm a Microsoft basher because I'm a Microsoft developer and a former fan of everything they did but they need to shake everything up and get back to their former ways very very quickly.

By TimoGunt on 29 Nov 2012

Backwards looking...

Microsoft's main problem is, strangely, Windows.

It totally dominates their entire thinking. Well, that and piracy. If they'd have put as much effort into developing things for the future as they have trying to hold onto the past their share price may have actually grown above the level it was at ten years ago, which it hasn't.

By SwissMac on 29 Nov 2012

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