Microsoft's Ballmer concedes Apple's gains; Dell income dwindles

Microsoft executives faced a barrage of Apple-related questions during that company’s annual shareholder’s meeting last night, while disappointed Dell revealed net income decline of 54 percent, year-on-year.

Dell announced $12.9 billion in revenue (down 15 percent y-on-y) for net income of $337 million. The company blamed its results on poor public sector sales and a consumer move to favour cheaper Dell PCs. All told, disappointing results for Dell.

Dell Chairman and CEO, Michael Dell, noted his expectation that his company may profit from the long-awaited PC replacement cycle on the release of Windows 7, saying, “I think there is an aging installed base for sure. You just have an accumulation of new technologies at the hardware, software, virtualized client and these IT managers really know they cannot extend the life of these client assets forever. While I don’t think it is all going to occur at once, I think it will be a rolling refresh that occurs over perhaps 18 months, I can’t remember a time when a very high percentage of them skipped an entire operating system. So what we remind them, and they know this, Windows XP is eight years old.”

But will Windows XP users move to Mac?

Microsoft CEO Steve Ballmer doesn't believe they will, even though he acknowledges Apple’s picked up some market share.

He had little answer to one shareholder who accused Microsoft of having a poor rep in contrast to Apple in the key segments of student and younger computer users. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there," the shareholder said.

Ballmer’s answer? "There's certainly always opportunities for improvement," he said.

Microsoft’s boss remains bullish. "You take any country, including this one, and you say, how are we doing?" he continued. "The truth of the matter is, we do quite well. Even among college students, we do quite well. Do we have an opportunity for improvement? We do. Some of that is marketing some of that is phase of life. It is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows, that's a good thing. Even in the toughest market, which would be the high end of the consumer market here in the US, 83 times out of 100 people choose a Windows PC over a Mac."

On Windows 7, Ballmer said, “Windows 7 I think gives us a real opportunity to come back again at some audiences that have been tougher for us. Frankly, the economy is good for us, because people do understand that Macintoshes are quite a bit more expensive for essentially the same computer…but we have opportunities to improve among exactly the constituency that you identify."

Analyst Charles Wolf in September noted that Apple’s share of the home computer market had more than tripled in the past five years.

Illustration: This image is of a closed invite-only meeting hosted by Microsoft at its campus every year. Spot the PC versus Mac laptop mix. Via: WindowsPhoneThoughts and Daring Fireball.