Microsoft ’s Sales

vs.
Apple’s Sales
 Year Sales Net Income EPS
2009 $ $ -
58 , 437 , 000 , 000 14 , 569 , 000 , 000
2008 $ $ -
60 , 420 , 000 , 000 17 , 681 , 000 , 000
2007 $ $ -
51 , 122 , 000 , 000 14 , 065 , 000 , 000
2006 $ $ -
44 , 282 , 000 , 000 12 , 599 , 000 , 000
2005 $ $ -
39 , 788 , 000 , 000 12 , 254 , 000 , 000
5 yr Growth Rate 10.0 4.4 -

Apple Financial Information

Year Sales Net Income EPS
2009 $ 36,537,000,000 $ 5,704,000,000 6.39
2008 $ 32,479,000,000 $ 4,834,000,000 5.48
2007 $ 24,006,000,000 $ 3,496,000,000 4.04
2006 $ 19,315,000,000 $ 1,989,000,000 2.36
2005 $ 13,931,000,000 $ 1,328,000,000 1.64
5 yr Growth Rate 32.2 43.9 40.4

*Information from LexisNexis Business. See last slide for more information
 5 Year Growth Rate
 The definition of a 5 year growth is
just as it sounds: the growth of
the company within 5 years
 In this case, while Microsoft did
make more money in general, the
growth rate was much less than
Apple’s.
 Translation: Microsoft has more
money, but Apple is growing
much more rapidly.

•Notice that since 2005,
both companies’ sales
have increased overall,
but Microsoft’s has
actually stopped
increasing, and even
begun to decrease.
•
•

•Income, in turn, has had

the same trend
 Why?
 I want to throw out the most obvious
reason and that is the economy.
Yes the economy has been in the
slumps, but Apple’s sales have been
steadily rising—and their prices are
generally higher than Microsoft’s.
 While there are many possible reasons
for this unfortunate effect on
Microsoft’s sales, I would like to
focus on one area in particular:
Competition with other companies
○ Specifically Apple
 More explicitly: iPods vs. Zunes
•
 Survey
I asked 22 people which music
device they prefer: iPod, or Zune.
 18 out of 23 prefer the iPod, leaving
only 5 that prefer Zune.
Amanda said "I like the iPod but
I don’t know much about the Zune."

R.O. said "hmmm that's tough

but I think iPod."

And Robert said “I owned a Zune

before my iPod touch. Now I think
iPods are the greatest things
ever made.”
 What can we take away
from this survey?
 According to Amanda, Microsoft
needs more advertisement.
 People like R.O. need more
information about the Zune.
 And we can assume that
accommodation to current
customers is also needed, as
Robert switched away from Zune.
 Are Zunes even comparable
to iPods?
 Surprisingly, yes!
 There is now a Zune HD that even has a
touch screen.
 Did you know that? I certainly did not.
 For a 32 GB, Zune undercuts iPod by $30
(Zune HD is $269, iPod Touch is $299.)
iPod
•
Genius Wireles Web Video 3.5’ 480x320
Feature
• Playlis s Browser Compatible screen screen
Zune tSmart Wireles Web HD Video 3.3’ resolution
480x272
Feature DJ s Browser Compatible screen screen
resolution
= This particular feature is at least slightly better compared to the
competitor
(If there is no’sstar
feature
, the. two features are essentially equal.)
 Solutions:
 Promote, promote, promote!
 Commercials—make them more “hip” for the
young users.
 Facebook/MySpace ads
 Movie theater ads (during previews)
 Xbox ads
 Find one direction and stick to it
○ We all know of iPod’s dancing commercials,
and their iPhone commercials with simply
the phone and a pair of hands. What is
Zune’s “thing”?
 Make the information easy to find.
 Make the website more user-friendly.
 Press release.
 Keep customers by accommodating to them
more.
 Survey customers to find out what it is that they
prefer about iPods over Zunes.
 More on Promotion
 ADVERTISE!
I didn’t even know about the Zune
HD before one of the people I
surveyed (who preferred Zune)
mentioned it.
iPod has the first mover advantage,
yes, but first mover companies
don’t always prevail. If Microsoft
wants to compete, they have to do
it right and that means upping the
fight.
Make sure that the advertisements
are just as up to date as iPod’s.
Better yet, more up to date.
 More on Ease of Finding
Information
 Zune.com is different from
zunestore.net and while you are
directed to the right place when
you are looking to buy products, it
would be much easier to connect
the two sites.
 Make the website even MORE user-
friendly.
 Make the information available on
Xbox Live. Put it on the front
page. Make it available to buy
through Xbox Live.
 What do the customers
want?
 Go out and survey.
 Find out what they want!
 Customer service representatives
should be friendlier.
 Make available an online customer
service chat. People don’t like to talk
on the phone unless they absolutely
have to.
 Make a text message line too, similar
to the online chat, or KGB. Make it
free! Even for people whose
warranties are up. As long as they
own the product, they should
receive the help.
 More Motivation
 In a review, “Zune HD vsiPod Touch
review and comparison,” the
iPhone Spies website announces
that Zune HD “has quite a few
areas that makes it a lot more
desirable than the iPod Touch.”
 The New York Times said that “Zune
HD is one package that could
actually take the fight to Apple’s
iPod Touch.”
 Zune HD vs. iPod Touch
winner by comparison?
 Price V id e o S u p p o rt
Winner: Zune W in n e r: Z u n e
 Display A p p s S u p p o rt
Winner: Zune W in n e r: iPo d
 Battery Life S o ftw a re
Winner: Zune W in n e r: tie
 Size and Weight
Winner: Zune
Overall Winner:
Zune
 Sources (Financial)
 Financial Information:
"Apple Inc Financial
Information." LexisNexis. Web. 22
Apr. 2010. http://
www.lexisnexis.com.proxy.library.oregonstat
.
"Microsoft Corp Financial
Information." LexisNexis. Web. 22
Apr. 2010. http://
www.lexisnexis.com.proxy.library.oregonstat
.
 Sources (Reviews)
 iPhone Spies
 Derek. "Zune HD vs iPod Touch Review and
Comparison." iPhone Spies. 15 Sept. 2009.
Web. 27 Apr. 2010. http://
www.iphonespies.com/iphone-news/zune-hd-vs-ipod
.
 NY Times
 Williams, Stephen. "Yet Another Media
Player Plans to Take on the Leader." The
New York Times - Breaking News, World
News & Multimedia. 19 Aug. 2009. Web.
27 Apr. 2010. http
://www.nytimes.com/2009/08/20/technology/persona
r=1&scp=3&sq=zune%20ipod&st=cse.
 Sources (Features)
 iPod
"So Much Fun. So Much to
Touch." Apple. Web. 27 Apr. 2010.
http
://www.apple.com/ipodtouch/features
/.
 Zune
"Zune HD 32 / Features." Zune. Web.
27 Apr. 2010.
http://www.zune.net/en-us/products/zunehd
.
 Sources (Reviews
Cont’d)
 Digital Trends
Mokey, Nick. "Microsoft Zune HD vs.
Apple IPod Touch | Page 2."Digital
Trends. 16 Sept. 2009. Web. 27 Apr.
2010. http
://www.digitaltrends.com/guides/microsoft-z
/.
 Zune
"Zune HD 32 / Features." Zune. Web.
27 Apr. 2010. http://
www.zune.net/en-us/products/zunehd/zuneh
.