Gates worried by TV Mac attack

Stan Beer
Wednesday, 07 February 2007 02:20

Opinion and Analysis

However, Gates was not laughing when he responded to questions about the Macintosh or the Apple ad campaign. His response was that of a man who feels that everything is not as completely under control as it once was.

Gates claimed not to have seen the Apple commercial. If that's the case, then he was certainly well briefed about it. And he actually went to the extent of sniping back at the Apple ad, using the word "lying".

Well if Gates believes that Apple's claims about Vista and Macintosh are a pack of lies he obviously thinks that they're powerful lies because he appears worried. And why wouldn't he be?

The part about a Vista upgrade being major surgery and the PC guy offeing to donate his peripherals if he doesn't come through it has some real elements of truth.

Microsoft Windows already has more than 90% of the market and XP users are not lining up right now to pay extra for boxed copies of Vista and whatever extra hardware and peripherals they need to run it. As for the other 7% or so who use Mac OS or Linux, there's as much chance of them converting to Vista as finding water in the Sahara.

As for Apple, it senses some cracks appearing in the Vista dam and it is applying the pressure using its considerable clout in the music player space. Vista has some incompatibility problems with iPod that have yet to be overcome, Apple headlines scream. Now there's tens of millions of PC users who won't be upgrading to Vista in a hurry.

However, perhaps the uncharacteristic frustrated response of Bill Gates to the Mac ad is symptomatic of wider issues facing the company. Having reached the pinnacle of its success, where else can Microsoft go to grow its market?

Microsoft can try to stamp out software piracy in Russia, China, India, Romania and elsewhere in the developing world. However, it's a case of diminishing returns and a Catch 22 situation for the software company. Microsoft's products are too expensive for average users in emerging economies so piracy proliferates and in fact acts to spread the Microsoft brand. Microsoft cannot afford to press too hard.

Back in its heartland of the developed world, Microsoft can at best hope to maintain its Windows marketshare and worst it could suffer considerable leakage to Linux and Mac. The same thing holds true for Office 2007, which is incredibly expensive for a product that performs functions that users can get elsewhere for free.