Several of the objections to my “Microsoft’s Long, Slow Decline” piece (e.g. here) are arguments that Microsoft wants PC selling prices to continue to drop. That’s just not so. Peter Burrows reports on Microsoft’s financial analysts meeting:
I’m at Microsoft’s financial analysts meeting in Redmond, where Ballmer joked about the many Apple laptops in use by the financial analysts in the room. “We have low share in the investor community. I see a lot of Apple logos,” he said during his opening remarks. “Don’t bother to hide them. I’ve already counted them. And it’s okay—feel free [to use the Macs], so long as you’re running Office.”
Of course, Ballmer also explained that the company’s goal is to raise PC prices in the next year. That’s due both to expected popularity of a new class of higher-end and higher-priced netbooks, a new pricing strategy around Windows 7 that the company hopes will result in far more upgrades to premium SKUs, and a reversal of a strategy in the last year to cut prices to spur demand in emerging countries. “The theory was wrong,” said Ballmer, in that Microsoft didn’t tap enough untapped demand to compensate for the price hit. “You’ll see us address the theory. We’re going to readjust those prices north” with Windows 7.