Microsoft depends on hardware manufacturers to create the systems and peripherals that can run Windows well. Ballmer says, "In the competition between PCs and Macs, we outsell Apple 30-to-1." What do you mean "we," Steve? Microsoft doesn't sell even one PC, and that's been a problem. PC makers have further tarnished Microsoft's reputation by sending hardware to consumers bundled with poor-quality device drivers and annoying trialware. Microsoft's hands are tied on this point, lest it be attacked for exercising monopoly powers.
Microsoft depends on retailers and direct-sale manufacturers to sell and support the systems that have Windows installed. In the parlance of the industry, Microsoft doesn't "own" those customers, so users don't tend to have any relationship with Microsoft. Instead, they deal with Best Buy, Geeks on Call, Dell, and their local computer guys. Often those experiences relate to spyware and software disasters, and are about as pleasant as a visit to a fly-by-night auto repair shop. Whether it's fair or unfair, users associate their bad PC experiences with Microsoft because that's the logo that flashes up each time they start the computers. Branding cuts both ways.
How does Microsoft's position contrast with Apple? Apple manufacturers its own hardware and peripherals. Apple writes the operating system and a lot of the application software. Apple has its own stores where you can buy the hardware and software. If you need help using the computer, you can go to the Apple Store's Genius Bar. Apple "owns" its customers. Apple controls its destiny.
If Microsoft wants to compete with Apple for the hearts of consumers, it needs to stop leaving its fate in the hands of OEMs and software developers. It needs to be more vertical. It could build a MicroBook that takes full advantage of Vista power management and fast boot capabilities. Perhaps we could see a MicroPhone that shows some innovative ideas in hardware design, and Microsoft could use its influence to make sure that the phone isn't feature-crippled in order to satisfy the carrier's profit motives.
Does that seem crazy? Yes. But what about the Zune? Microsoft messed around with hardware makers for years before belatedly deciding to take the DIY approach, which didn't thrill its PlaysForSure partners. Yet if Microsoft has confidence in its platforms, it needs to prove that the weak links in the Windows chain have been the partners and not Microsoft. It doesn't even need to sell a lot of whatever it builds, just enough to show how it should be done according to Microsoft. In the process, it may find out that it's been asking a lot -- perhaps too much -- of its partners.