How Microsoft Can Turn Itself Into The Next Apple


Microsoft Corporation (NASDAQ:MSFT) is notably absent from this year’s Consumer Electronics Show (CES), causing many to ponder if this is a sign of the company’s increase irrelevance or perhaps a sign it is time for a change.

In The Wall Street Journal articleHow Microsoft Can Become the Next Apple by Michael Hickins, he opines that it’s time to oust Microsoft’s CEO, Steve Ballmer, to make room for change, even citing investor David Einhorn as a longtime proponent of this.

Now keep in mind Microsoft is still one of the world’s biggest technology companies and its relevance isn’t completely lost. The company appears to know change is needed, recently it kickstarted a strategy to get back its mojo with its business customers by reaching out to consumers (and therefore business customers).

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This course of action doesn’t appear to be working out so well, even with introduction of its new Windows RT tablet.

Just as the NFL fires its coaches when they don’t have winning seasons, maybe Microsoft should get rid of its “top coach” and insert a new, but familiar one.

Hickins suggests Bill Gates.

There is already public support for this change, as Paul Moore, vice president of product management for the mobile division of Fujitsu America Inc., said this week a Gates return to the helm would have the same effect of Steve Jobs coming back to Apple Inc. (NASDAQ:AAPL).

He said via The Wall Street Journal, “I think people would get excited”, he also noted that Microsft should have attended this year’s CES.

Earlier in the week, InformationWeek’s Eric Lundquist agreed with this assertion on the company’s CES absence by writing, “I think Microsoft bailed out of its CES keynote position one year too early. A keynote on corporate connectedness would probably be out of place at CES, but it sure would be useful to all those CIOs trying to decide whether to bet the future on Microsoft.”

But Microsoft wasn’t complete out of sight and out of mind, Ballmer did appear at Monday night’s pre-conference keynote address by Qualcomm (NASDAQ:QCOM)’s CEO, Paul Jacobs. His appearance didn’t get any buzz going for Microsoft’s tablets or Windows 8.

Maybe he knows what many are increasingly learning: Windows 8 hasn’t exactly set the world of fire.

Market research firm, NPD Group believes this and recently said, “despite the hype, and hope, around the launch of Windows 8, the new operating system did little to boost holiday sales or improve the year-long Windows notebook sales decline. Windows notebook holiday unit sales dropped 11 percent, on par with Black Friday, and similar to the yearly trend, but revenue trends weakened since Black Friday to end the holiday period down 10.5 percent.”

JPMorgan analyst, John DiFucci, concurred and predicted via Forbes, “Surface unit sales of just 700,000 units in the December quarter; forecasting 2.6 million for the June 2013 fiscal year, and a measly 6 million for fiscal 2014. (A little perspective: Apple sold 14 million iPads in the September quarter.)”

But Microsoft’s absence wasn’t exactly a way to dodge its Windows 8 disappointments. According to Frank Shaw, Microsoft corporate vice president of communications, they chose not to spend a lot of marketing dollars for CES and instead will redirect the funds elsewhere later in the year. He said via The Wall Street Journal that January isn’t the best time to connect with consumers unless they announce something new.

Shaw added, “I’m 100% convinced [skipping its traditional presence at CES] was the best business decision we could have made.”

He also said the company isn’t ready to give up on Windows 8 for consumers. He said, “We’re ahead in terms of pushing things [such as a touch-enabled operating system for laptops], and sometimes that’s a lonely place to be.”

Numbers during the holiday season painted a positive picture for the challenged Windows 8, as sales of Windows-based phones during the week of Christmas 2012 were five times greater than in the same time period for 2011. Sales have also been keeping up with Windows 7 numbers sales, which was  a very successful product for the company.

Many believe Windows 8 is key for Microsoft to have a bright return in the technology arena. But there are other concerns for the operating system as it has failed to obtain application developers for it and customers’ confusion with its functionality.

Calls for Ballmer’s exit will likely continue. As noted by Hickins, Jobs was absent from Apple for quite some time and with a Gates return, he may offer a new perspective and a continued desire for the company to succeed.

Microsoft Corporation (NASDAQ:MSFT) is up 0.43%, trading at $26.66.

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