What's shocking about Ballmer's statement is that Microsoft's major mobile initiatives have all been beaten by feature-limited devices. Microsoft's breathtaking vision for a wide range of powerful Ultra-Mobile PCs running Windows Vista was sidelined by netbooks that Steve Jobs accurately characterized as "just cheap." Microsoft's cell phone operating systems have long promised Windows-like functionality and power, but have been clobbered by phones that do much less.
In other words, if Microsoft wants to compete in the new world, it will have to ship simpler, less "powerful" products quicker and cheaper.
Ballmer has promised a consumer version of Surface, and shipped limited MPG support in Vista and Windows 7.
I believe it's already too late for Microsoft to catch Apple in the consumer MPG tablet space. Even a great product launched next year would probably repeat Zune's failed attempt to catch the iPod. By the time Microsoft shipped a great media player, Apple had already locked everyone into iTunes and saturated the public mindset with iPod enthusiasm.
However, the business and enterprise market for MPG tablets is wide open. It's a stunning state of affairs: There are literally zero material contenders right now for the future of business computing!
Opportunities like this come along only once every 50 years. Here's how Microsoft can seize the day:
1) Initiate a massive effort to build an elegant MPG tablet that works like the Surface table.
2) Optimize it for business by building in support for Exchange, Office and other Microsoft business platforms and software and make it really secure.
3) Do not attempt to support Windows applications -- documents, yes, legacy apps, no. Emphasize low battery and processor requirements over raw compute power.
4) Create a new development platform for the device, and work with ISV partners to re-create limited functionality versions of existing applications optimized for MPG. Also: Make it as simple as possible for in-house developers to build custom apps very quickly.
5) Make the device finger-centric like the iPad, but add pen support for scribbling notes and also for a limited vocabulary of pen-centric gestures.
6) Go nuts with sensors, as Surface does. Make the tablet aware of who is holding it, what cell phones and PCs are nearby, so it can wirelessly sync and take advantage of various things like cell phone GPS.
7) Build in voice command, and convince both users and developers to take advantage of it.
Microsoft became the dominant company in the industry because Bill Gates had a clear vision: PCs were the future and the business opportunity was in controlling the software platform. Today, MPG tablets are the future, and the business opportunity is bringing something as awesome as the iPad into the enterprise.
The window is closing. HP bought Palm to deploy its MPG-capable WebOS on tablets. Google's Android platform will gain MPG capability any minute now. Baring all that, Apple itself could stroll into enterprises and dominate there as it has on the consumer space.
The truth is that Palm and Google are playing catch-up, too. And Apple is busy taking over the consumer world.
Meanwhile, Microsoft has the user-interface technology, the expertise, the developer community and the partnerships and business relationships that give it an enormous advantage over Apple. The future of user-facing enterprise computing is Microsoft's for the taking. If only they'll take it.