Microsoft accepts Apple and Google as main mobile and desktop competitors

By Tom Warren, on 15th Aug 11 11:04 am with 28 Comments

Microsoft has acknowledged that it faces a continued desktop PC threat from both Apple and Google.

The software giant made the admission in its annual 10-K report filed with the SEC (.DOCX). Microsoft has previously named Linux as a competitor but removed references to the open source operating system in its 2011 report. On Windows, Microsoft posted the following as competition notes:

“The Windows operating system faces competition from various commercial software products offered by well-established companies, mainly Apple and Google. The Windows operating system also faces competition from alternative platforms and devices that may reduce demand for PCs. User and usage volumes on mobile devices are increasing worldwide relative to the PC. We believe Windows competes effectively by giving customers choice, flexibility, security, a familiar and easy-to-use interface, compatibility with a broad range of hardware and software applications, and the largest support network for any operating system.

Windows Live software and services compete with Apple, Google, Yahoo!, and a wide array of Web sites and portals that provide communication and sharing tools and services. Our PC hardware products face competition from computer and other hardware manufacturers, many of which are also current or potential partners.”

Microsoft’s competition notes for mobile included the following:

“Entertainment and devices businesses are highly competitive, characterized by rapid product life cycles, frequent introductions of new products and game titles, and the development of new technologies. The markets for our products are characterized by significant price competition, and we anticipate continued pricing pressure from our competitors. Our competitors vary in size from very small companies with limited resources to very large, diversified corporations with substantial financial and marketing resources. We compete primarily on the basis of product innovation, quality and variety, timing of product releases, and effectiveness of distribution and marketing.

Windows Phone faces competition primarily from Apple, Google, and Research In Motion. Mediaroom faces competition primarily from a variety of competitors that provide elements of an Internet protocol television delivery platform, but that do not provide end-to-end solutions for the network operator.”

Ed Bott at ZDNet summarizes the changes to Microsoft’s SEC filing very well. Microsoft has essentially admitted that Linux is no longer a desktop threat and that it’s a three-horse race between Apple, Google and Microsoft. Bott also points out that Microsoft appears to place a higher importance on its hardware business. Specifically, the company notes: “Our PC hardware products face competition from computer and other hardware manufacturers, many of which are also current or potential partners.” Microsoft currently manufacturers a number of keyboard, mice and webcams. It’s possible that the company could be considering to enter into additional hardware based markets, largely saturated by partners.

  • http://twitter.com/ahmed66z ahmed

    No matter Microsoft accepts  Apple and Google as main mobile and desktop competitors,,,But hear according to IDC & DEVELOPERS “Windows Phone 7 will beat iPhone and Android”
    http://ihackuall.blogspot.com/2011/08/windows-phone-7-will-beat-iphone-and.html  

    • http://twitter.com/efjay01 Ef Jay

      Try their crippled implementation of turn by turn navigation and you will realise that no, they wont. Not unless they have a radical change of direction and focus with WP7 and beyond.

    • Matthewmsft

      that’s what Nokia’s planning to do. And no matter Motorola’s patents, Microsoft/Sony/Apple/RIM’s Nortel profile will be larger. plus, Motorola beiing google’s favorite could drive other manufacturers out of the market for Android devices when the motorola devices are the only ones getting timely updates. also, Nokia plans to work with carriers to get Windows Phones in front of customers. Windows Phone has a higher satisfaction rate _when people get their hands on it_, 57% are VERY satisfied. if Nokia’s plans follow thru, I think its very possible that Windows Phones could become the consumer favorite in time.

    • Joryan44

      57% are very satisfied? Did you mean 97%? The first figure is nothing to get excited about.

    • Et Jay

      Your are correct sir!

    • http://www.facebook.com/rknevhulaudzi Rendani K Nevhulaudzi

      Window Phone7 will beat Android and Apple, just matter of time, Microsoft might have dropped in market share but it will be coming back

  • Anonymous

    Have they mentioned anything about what they are going to do about it?

    • Anonymous

      This is a 10k filing with the SEC. You’re supposed to state any threats to future earnings in the footnotes to the statement. They don’t state how the company is going to respond to competative threats.

  • http://www.facebook.com/rknevhulaudzi Rendani K Nevhulaudzi

    The declaration of Apple and Google as competitors indicates Microsoft acknowledge both companies presence in the mobile ecosystem, but Windows Phone will be a success #watch the space

  • http://twitter.com/millslife John Mills

    Been watching the space.  MSFT losing mobile OS marketshare 12 months straight.  No tablet to date.  Win8 not due out until next year…embracing innovations already existent in Apple and Google products. Those are the facts…everything else is wishing on a star.

  • http://twitter.com/millslife John Mills

    Been watching the space.  MSFT losing mobile OS marketshare 12 months straight.  No tablet to date.  Win8 not due out until next year…embracing innovations already existent in Apple and Google products. Those are the facts…everything else is wishing on a star.

    • Test1ngi23

      Winrumor commentors don’t like facts.

    • Jinge

      As I read somewhere else, WP7 has been released less than 1year ago, and engagement contracts are often 24 months. Lets see the market in 1 year, when WP7 will be mature, and when people will know it. 
      All comments now “WP7 will disapear” or “WP7 will beat every other phone OSes” are only useless speculations as the OS has the software qualities to success, just need support from hardware constructors and a little push from telecom companies… If after that nobody adopts WP, then it can be qualified as a failure for the mobile sector. 
      About tablets, even I don’t like so much the sector, it is a shame MS hadn’t push more to get into the market. Let’s see next year is something appear.

    • Joe05

      Then what explains Samsung Bada OS gain more market share then WP7 when both was released the same time?  The whole WP7 has been only in the market for 1 year also fails to explain why it lost market share and fail to convert Window Mobile owners to WP7 owners.  It has not incited previous Window phone owners from changing platforms.   

    • sa

      erm… dude… bada was released well before wp7

  • xledger

    Ah yes! At 5.8% (US) market share, Google (40.1%) and Apple (26.6%) are indeed “competitors”. Though not quite threatening yet.

    And sure, many people are still stuck in 2-year contracts and can’t switch yet. And you can tell by looking at Google and Apple’s numbers too! Their numbers are stagnant, because everyone is in a 2-year contract. It’s not like their market share increased between March and June. Nor has Microsoft’s market share dropped between these months. People are just stuck in contracts. You don’t have to check, because I already have, and it’s stagnant. There’s nothing for you to check. Just accept my words. (Really)

    And for those of you asking for sales numbers, don’t you know Windows Phone is less than 2 years old? Just wait till it’s 2nd birthday, and you’ll see that it’s the most widely used, highest-selling OS in mobile. No one in their right mind will expect a mere 1-year-old phone os take over the world (btw, I’m not the same idiot who said people should wait for WP7′s first birthday before asking for sales numbers)

    I tell you, when people’s phone contracts end, Windows Phone will take over the mobile world. In fact, once my current contract ends, I’m sooo going to get a Windows Phone. Everyone I know either already has one, or are planning to get one. That alone is proof of how good Windows Phone is. And I tell you, when Mango comes out, it’ll take Microsoft’s mobile market share beyond Google and Apple. And when Nokia releases their Window Phones, Google and Apple will be scrapping the bottom of the barrel for a sale.

    Mark my words.

    • Test1ngi23

      OK. I’ll be wait for your report in 6-12 month’s time.

  • Anonymous

    It typically takes Microsoft 2-3 iterations of any product/software to become the 800lbs. gorilla.  Look at the video game industry as the perfect example.  After selling 100million Ps2′s, Sony had to get 10% of their current users to adopt their next console in the first year.  Instead, Microsoft came out swinging and didn’t look back.

  • Jinge

    “A new hardware market” => It would be great that they enter the tablet market! 
    All other are making android tablets, and I think Microsoft lacks feedback to improve its future product, and may be late again if nothing is done…
    A MS tablet would be great, even for something like the google’s nexus. To show how to do it, and that is possible! :)

  • Guest

    Apple and Google have been their main competition in mobile and desktops for years. What MS now accepts is kinda irrelevant.

    • Jinge

      They just don’t want to talk about competition, but the result is the “competition report” is useless, as they don’t say anything new… It is like a “post-report”.
      The thing is few years ago MS was doing mobile for businesses. The iPhone was not designed for business, and android maybe not as popular as now. But now I would also say it is a bit late to “accept” these competitors!

    • Jinge

      They just don’t want to talk about competition, but the result is the “competition report” is useless, as they don’t say anything new… It is like a “post-report”.
      The thing is few years ago MS was doing mobile for businesses. The iPhone was not designed for business, and android maybe not as popular as now. But now I would also say it is a bit late to “accept” these competitors!

    • Jinge

      They just don’t want to talk about competition, but the result is the “competition report” is useless, as they don’t say anything new… It is like a “post-report”.
      The thing is few years ago MS was doing mobile for businesses. The iPhone was not designed for business, and android maybe not as popular as now. But now I would also say it is a bit late to “accept” these competitors!

    • Jinge

      They just don’t want to talk about competition, but the result is the “competition report” is useless, as they don’t say anything new… It is like a “post-report”.
      The thing is few years ago MS was doing mobile for businesses. The iPhone was not designed for business, and android maybe not as popular as now. But now I would also say it is a bit late to “accept” these competitors!

    • Jinge

      They just don’t want to talk about competition, but the result is the “competition report” is useless, as they don’t say anything new… It is like a “post-report”.
      The thing is few years ago MS was doing mobile for businesses. The iPhone was not designed for business, and android maybe not as popular as now. But now I would also say it is a bit late to “accept” these competitors!

    • Anonymous

      This article is misleading. What Microsoft is accepting is that mobile may eat into pc sales which is their bread & butter. Since mobile devices are becoming powerful enough that for consumers (not businesses) pc are not needed as much. This means Apple & Google could significanly effect MS profits and they need to disclose this in the 10k filing. 

    • Anonymous

      This article is misleading. What Microsoft is accepting is that mobile may eat into pc sales which is their bread & butter. Since mobile devices are becoming powerful enough that for consumers (not businesses) pc are not needed as much. This means Apple & Google could significanly effect MS profits and they need to disclose this in the 10k filing. 

  • Philwonderwall

    I’ve just come to the end of my 2 yr contract with o2. I have an iPhone 4, I’m keeping it and buying The One Plan SIM only deal from 3 Mobile. I wont be switching to Windows phone because I have a MacBook Pro and iMac (both now with Lion), an iPhone 4, my fiance has an iPad and an iPod Nano, and I have an iPod shuffle (for running).
    I’m not a huge Apple fan, as funny as that sounds, it’s just built up like this over a period of about 4 years, where over time I’ve realised Apples products are just better overall than Microsoft’s or anyone elses (in my opinion).
    What Apple have done that’s pretty clever is to foresee that doing things in a simple, stable, cool and often very clever way attracts a lot of people, and then they snare those people (like me I admit) by making all their devices easy to use and rarely crash and mostly importantly – all those devices all talk to each as you’d expect them to.
    This is the same reason Google and Microsoft have been expanding their own software into mobile OS’s, and now hardware as well, because essentially they can see from what Apple has done – it works and people want it.
    Now with iCloud, those Apple things also all sync up together wirelessly. Genius.
    Ok, so a lot of Apples stuff isn’t “open source”, but seriously, I hardly know anyone that is affected by Apples devices being closed off. They just accept it for what it is and use the device like you’re supposed to.
    As do I, and my life is much more straightforwards than it used to be when I used Microsoft’s Window’s OS’s to name one thing….