Steve Ballmer's problems are other people's fault

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Last Friday I discussed the fact that Apple owns an astounding 91 percent of the $1,000+ computer market. I should add a couple of caveats to that: that's 91 percent of dollars spent, not of computers sold, and it's retail only. Still, I stand by my conclusion that Apple is in some ways winning by default: nobody else is really attempting to make computers that expensive anymore.

The company that Apple is supposed to be beating in this battle is Microsoft, except, as even hardened industry consumers can sometimes forget, Microsoft doesn't actually sell premium PCs, or indeed PCs of any description. In fact, a huge majority of typical mid-to-downmarket PC consumers will not once in their entire lives engage in any sort of retail transaction with Microsoft, any more than the average car buyer will have any direct contact with Delphi.

Nevertheless, Microsoft and Apple certainly act as if they're competing against each other head-to-head. Steve Ballmer in usual jocular fashion spent quite a bit of time talking smack about Apple at Microsoft's annual financial analysts meeting yesterday, calling Apple's sales uptick "a rounding error." He also manage to work both sides of the price question at once, crowing over the success of the Laptop Hunter ads in showing that people looking for Macs "get ripped off, and pay too much," but later saying that Microsoft is "going to readjust those prices north with Windows 7."

Even more interesting to me is Ballmer's assertion that soon "cool" ultra-thin high-performance laptops will be arriving with Windows on them, presumably occupying the same market segment as the Macbook Air. And the motivation for this is? "The predominant attack [from Apple] is: 'We have the coolest hardware.' When you see the hardware the PC designs that will come out this Christmas with Windows 7 that conventional wisdom will begin to change."

Do you see what happened there? Steve Ballmer heads a company that makes operating systems. He thinks that the reasons that computers that come pre-installed with his operating system are beginning to fade a bit against a rival operating system is that the hardware isn't as appealing. Convenient for him to frame it that way, isn't it? Of course, in my opinion, anyway, what you're paying extra for when you buy a Mac isn't the hardware; it's OS X. That's the space where Microsoft and Apple really fight it out. That's what's within Microsoft's power to improve. Let's see them do it.

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