Ballmer: we should have moved to tablets earlier

 

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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.