Microsoft’s Ballmer Fails To Back Optimism With Numbers

Microsoft CEO Steve Ballmer characterised himself as cautiously optimistic about the next year, telling those assembled for the annual Financial Analyst Meeting on 30 July that Microsoft had “great prospects on the map.”

However, Ballmer also refused to suggest any hard numbers, such as sales guidance, to back his enthusiasm. Microsoft is betting heavily that Windows 7, Office 2010, and other applications and platforms will help raise its revenues heading into 2010, perhaps boosted by a tech refresh on the part of SMBs (small-to-medium businesses) and the enterprise.

“It’s the middle of a down economy,” Ballmer said. “I’m not going to sit here and give you a one-year optimistic guidance. I’m just not going to do it. But it’s not that I’m not optimistic.”

Ballmer seemed intent on pumping up Microsoft’s prospects despite a fresh round of data suggesting the economy had taken its toll. On 23 July, Microsoft reported a 17 percent decline in year-over-year revenue for the fourth quarter of 2009, earning $13.10 billion (£7.8bn) for the quarter as a combination of flagging economy and lowered PC sales drove its revenue to nearly a billion dollars below Wall Street estimates.

“Average PC sales are sort of down in the traditional market 16 to 18 percent,” Chris Liddell, Microsoft’s chief financial officer, explained during the earnings call. However, he sounded a cautious note of optimism in PC sales, saying that 2010 could see “a double impact of a better PC market year-over-year and a better mix in the types of PCs we’ll be selling relative to the average selling price.”

During the analysts meeting, Ballmer suggested that PC manufacturers will roll out new ultrathin PCs that will balance netbooks’ portability with larger screens and more professing power. Implicitly, such devices could run versions of Windows that offer Microsoft higher margins than the stripped-down versions of Windows 7 currently intended for the netbook market.

“We want people to be able to get the advantages of lightweight performance and be able to spend more money with us,” Ballmer told analysts.

Ballmer also suggested that, despite media attention that made it seem as if Apple and Google were rapidly storming the walls of Microsoft’s market share, his company still holds a dominant position within the market.

“Apple’s share, globally, cost us nothing,” Ballmer said, echoing Microsoft’s increased competitive position toward the Cupertino, Calif., company. “You can’t be high-priced. That doesn’t get us to the high volume that we aspire to.”