Filed under: Analysis / Opinion, OS, iPhone
Ballmer channels 1985, suggests Apple split iPhone hardware and OS
Steve Ballmer is imitating his CEO predecessor by suggesting that Apple separate its iPhone hardware from OS X, according to Ars Technica.
Nokia leads the smartphone market today with about a 30 percent share, he said. "If you want to reach more than that, you have to separate the hardware and software in the platform," he said in an discussion forum with the Churchill Club, a Silicon Valley business and technology group.
In 1985, Bill Gates approached Apple (and its then-CEO, John Sculley) with prospects in hand to convince it to license Mac OS to third-party vendors. As we all know, that didn't happen (at least not with Microsoft as a partner), keeping the bond tight between Apple hardware and software. Microsoft wound up doing it themselves with Windows.
The idea that Ballmer thinks other companies should be more like Microsoft isn't shocking at all; in fact, what else was the man supposed to say? Like Jobs with Apple, Ballmer's talks and interviews wield a great deal of influence on Microsoft's stock price. If he said anything other than what he did, MSFT would have taken a hit. As CEO, that's unconscionable.
If Apple had partnered with Microsoft in 1985, chances are Apple wouldn't be anywhere near the company it is today. Apple's share of the OS market could have been even bigger, sure, or somehow assimilated into the Microsoft-Borg collective. Does that mean Sculley was wrong to reject the offer?
Ballmer is coaching the other team in this game, and to give his comments any merit beyond equating them to cheerleading bluster is a mistake. The same with Gates and Sculley: I'd say Apple was right, just as it's right today to keep the iPhone platform tightly integrated.
In fact, if you want to look at the key difference between Microsoft and Apple, look at search. For search, Microsoft is to Google as Apple is to Microsoft for operating systems. Microsoft has about nine percent of the search market, Apple has eight percent of the OS market.
Instead of demonstrating how Microsoft is innovating their way into greater market share, Ballmer talks for seven minutes at the same conference about their position in the search market, but says nothing. He makes noises about "redefining the category" of search, but what does that even mean?
CEOs are never comfortable being called on the carpet when their company is facing stiff challenges, as Microsoft is with search. Ballmer's talk is an interesting case study in the contrast between Ballmer and Steve Jobs when it comes to explaining bad news. Ballmer blathers for seven minutes, while Jobs is more likely to write a tersely-worded letter that gets leaked to the press.
Microsoft and Apple are two companies at two extremes of transparency. Ballmer has verbal diarrhea, Jobs is communicatively constipated. Neither is ideal, but which one is better, in the end?
It all boils down to corporate politics: Ballmer's blithe suggestion that Apple should be more like Microsoft would -- of course -- be impossible to implement. Apple would destroy itself in a cataclysm of management.
Exactly what Ballmer wants -- and what Microsoft has wanted for 23 years.


![TUAW [Cafepress]](http://www.blogsmithmedia.com/www.tuaw.com/media/tuaw-cafepress-promo.png)


Reader Comments (Page 1 of 2)
frankg said 4:39PM on 10-02-2008
He does have a point.
The platform as seen in the iTouch is brilliant. It is being held back by the iPhone and it's restrictions.
Reply
TMM said 5:49AM on 10-03-2008
No he doesn't.
How can someone who's company hasn't understood what their model is doing wrong and is doing to the user and to usability have any right to tell other to do the same mistakes?
Howie said 5:16PM on 10-04-2008
What in the hell is an "iTouch"?
Todd W. said 4:41PM on 10-02-2008
Dear Mr. Ballmer,
If splitting a phones OS from the hardware is the only way of reaching over 30% market share, then why has it not worked for Windows Mobile so far?
Love,
Steve J
and
Jim B
Reply
Christina Warren said 4:46PM on 10-02-2008
I think that obviously, the statement was made because they see Apple as a threat in the mobile marketplace and want to try to downplay that threat to stockholders.
That said, a hardware lock o phones is in many ways 100x the gamble it is on traditional computers. The number of cell phones outnumbers the other numbers of devices and the rate at which customers rebuy them is much higher too. Since this is clearly the new sphere that software companies are focusing (and continuing to focus) in on, limiting everything to your walled garden is extremely risky. Windows Mobile might never get the share it wants or needs, but Symbian or Android very well could. Apple can continue to operate quite well as a niche player, but let's not forget the one product that has made them what they are today, not the Mac, no the iPhone, the iPod. The iPod transformed the company because it became THE dominant device. It still is THE dominant device.
I don't see them doing that on phones unless they open up to new models and lots more cellular providers. It is the type of thing that would actually require its own division, even if OS and phone were kept together.
And for what it is worth, I think if Apple had licensed its hardware and software in '85, Microsoft wouldn't be Microsoft today. That period where mainstream users suffered through DOS and then Win 3.1 while IBM and Microsoft battled over OS/2 would have led to massive Mac adoption. Windows 95 was a huge innovation for Microsoft because it brought the best elements of Mac OS (and some new and updated stuff too, System 7 was no true gem) to the hardware platform with all the users. If those users had had access to a better OS before 1995, I don't think the most powerful tech company in the world would be Microsoft. I'm not saying it would be Apple, but Microsoft certainly wouldn't be where it is now.
Reply
Metaphor said 8:09AM on 10-03-2008
Great points and your probably right about the licensing of the OS. The big point is that Apple have, and still do, focus on the experience of the end user. They can control that by specifying hardware that their software runs on. No other company has really done that. I imagine that Apple (rightly so) are scared about letting their 'experience' by way of OS X or OS iPhone to be deployed by third party's. Apple like control. By having this control they can keep their brand clean and focused. Apple don't have a walled garden in the traditional sense they just want to make sure everyone who picks up an Apple product from MacBook to iPhone gets the Apple 'Experience'. I don't think Android is a real contender it looks like a cartoon version of the iPhone OS.
Looking at the whole who would be the major OS player if things were different call. MS had the start.....they had the whole I use it at home and at work thing right from the start. Apple didn't and are now trying to play catch up using the iPod (very successfully) and the iPhone ( getting there) as leverage into that market.
Time will tell.
GSP said 4:49PM on 10-02-2008
I always enjoy seeing Ballmer making an arse of himself; in fact its the ONE (and only) thing he does really well.
Reply
Danlo said 4:50PM on 10-02-2008
Perhaps Ballmer will split up the XBox hardware and software?
Reply
Jeremy Dixon said 4:53PM on 10-02-2008
New Boss...Same as the old Boss.
Reply
CaptSaltyJack said 4:52PM on 10-02-2008
Best photo ever. Is that a piccie of Ballmer channeling 1985?
Reply
E said 2:48AM on 10-04-2008
I'd like to know where this picture is from too
benji said 5:01PM on 10-02-2008
Remember when Palm split it's hardware and software division, only to merge them back together?
...anyways, how's Palm doing right now?
Reply
Paul Ingram said 12:03AM on 10-03-2008
Bingo. Palm tried this exact model and it was so successful they merged Palm and Palm One back together a few years later.
Furthermore, look at how the market is defined. Palm, RIM, and Apple all develop their own hardware and software. Palm, of course, has begun to ship Treos with Windows Mobile, but this seems more like an admission of failure than a current strategy.
Worldwide the market is different, but Balmer seems to insist that software should always be separate from the hardware and we can see that this model is not always the optimal strategy, especially for companies that are capable of doing both at the same time.
Of course, anything Balmer says is self-serving propaganda. Would he really give Apple good advice?
geochick said 5:09PM on 10-02-2008
I'm sure Apple will add some of the touch features in its other hardware so no worries there... Ballmer is frothing at the mouth again what else is new?
Reply
Peter said 5:11PM on 10-02-2008
I do not think the phone companies at the end of the day want to be tied in with one OS - Like the PC market..
Reply
Mike said 5:22PM on 10-02-2008
Even as an Apple fan you guys really need to learn to stop being so narrow minded and acknowledge that each company is doing exactly what they need to do in their respective markets to succeed. Apple has carved a beautiful niche out in the hardware market and is tremendously successful in addition to making a wonderful OS. Remember, Windows core success still is from it's business side which Apple is not even remotely a threat in. What he said has merit, don't just be "that guy" who says New Boss...Same as the old Boss. You couldn't come off more clueless.
Reply
Jon said 2:44AM on 10-03-2008
I think it is in Apple's interests to tie the phone and software together. I bought my first Mac around 3 years ago solely because of my experience with the iPod and iTunes on Windows. To say that is stupid because Apple has been very successful in tying hardware to software in order to improve the user experience.
I think there are two reasons why the iPhone has not attracted a larger market - its price (and contract price) and the lack of choice in service providers. I think issues with the phone and software (e.g. no video capture) have had a much smaller impact.
Reply
Jean-Pierre said 5:41PM on 10-02-2008
The most important reason that Microsoft is loosing market share is that they get drowned in their different versions of OS and huge amounts of drivers for each different hardware device they "support". It's impossible to keep up a decent after sales support to such a huge different configurations.
That is why Apple is gaining market share "TODAY", 10 years ago this was not an issue, today it is, since customers want EASY technology.
It is not a surprise that Nokia is also going to integrate Hardware with their own software services. (they just dropped Blackberry support)
Only then you can control and give decent after sales support.
Of course if you have 80% market share that isn't changing overnight.
Windows will have to adapt to this new vision. The globalisation with less hardware manufacturers is going to help them with fighting this challenge.
Reply
Haro! said 7:08PM on 10-02-2008
He's talking market share. Its not about market share, and Microsoft's stock price reflects that. Market share isn't everything and Apple's been significantly profitable with under 10% market share. Its all about what is best for Apple to make money, under Jobs' direction they will continue to do so. Besides that small market share has allowed them to continually innovate and be ahead of the game. Keeping the hardware and software together doesn't look so bad now...
Reply
Virtuous said 7:29PM on 10-02-2008
Ballmer is an idiot that couldn't manage his way out of a paper bag. Too bad he'll be MS CEO as long as Gates is alive.
Reply