Quote: "You can't be high-priced," Ballmer added at the time.

Apple will always be a niche computer maker, as long as they keep the price up. When they start lowering the price, (if ever) then Apple will become more of a threat to Microsoft. As it is now, they do cut into the profits of MS, but skimming away the $1000 plus laptop market in some countries to a great deal.

But the truth is, that Linux is more of a competitor than Apple is. Even Steve Ballmer and Microsoft has said so, just look at this slide showing Linux with appoximately twice the desktop use as Apple:
http://www.osnews.com/story/21035/Ballmer_Linux_Bigger_Competitor_than_Apple

Quoting from the article and Ballmer: ""According to Microsoft, Linux is a bigger threat to the company than Apple, placing Linux above Apple in the marketshare figure pie chart thing. "Linux, you could see on the slide, and Apple has certainly increased its share somewhat," Ballmer said."
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So this brings us to the "why" part of the reason that users are flocking to alternative operating systems from Windows. I say its the way Windows is setup by default as insecure for web use and thereby becomes a malware problem for more than 80% of Windows home users. If they move to Linux or Mac, they do not have these problems.

The question is, why doesn't Microsoft fix the malware problem with Windows? Certainly it can be better secured than it is with limited user accounts installed (not UAC which is different) by default. While this will not give it the security of other alternatives, still it would help.

The question needs to be asked, why does MS fix that that is not broken? Like the taskbar, and the IE in Vista and Seven? When their users are abandoning Windows to move to Mac and Linux, in order to get away from the Malware problems. Why not try to fix the malware problem in Windows? That is the biggest problem, instead MS just trys to do something very incremental, like UAC, which is very minimal at best.

If MS wants to be relevant in 5 years time, it must start giving people what they want, and it must address the issues that Windows has in a far more forceful way than it has. The Malware problem cannot be entirely fixed in Windows anymore, as it has gone on for too long, but it can be far more greatly secured than it has been. They did it for the US Army with Secured Windows. Windows should install with a "Normal" account as default, IE, Outlook, WMP, windows messinger, need to be completely stripped out, which gets rid of ActiveX as well. Fat chance of this happening at MS with control freak Ballmer in charge, but this is exactly what needs to be done to make Windows somewhat secure as an internet OS out of the box.

MS needs to give the public what it wants, it wants an improved malware resistant XP, not a Vista/Seven, a piece of DRM bloatware that uses so many resources that it would not run on most older computers. MS needs to go back to its core business, Windows, and fix it right for users.

"users are flocking to alternative operating systems from Windows"

Please give facts and not opinions. Plus how many retail end users are flocking to anything but Microsoft based OS? Until Apple and Linux and any other alternative operating systems actually have a substantial application database to choose from, they will never be mainstream. Never. Just a niche market for a few, but never for the masses.

@Diamond Dave :

"users are flocking to alternative operating systems from Windows"

Please give facts and not opinions.
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Respectfully Dave,perhaps you did not bother to read the comment or click on the link for the facts. By the way, the "facts" were from Steve Ballmer and Microsoft, so it will be hard to argue against them.

First of all Mac is not more secure, it is safer through obscurity. Security experts will tell you this. Safer is a good thing, and that is a very valid plus for the Mac platform but there is no need to lie and say it's more secure.

While you do see some users switching from Windows to other OSs if you look at those numbers compared to the size of the market, "flocking" is hardly a word that fits.

Linux is not really a consumer OS, people using it have the technical know how to do so and understand the pros/cons of doing so and are happy with their choice. Even if they aren't tech users, if they are satisfied with Linux then it is doing what they need. I think Microsoft would have a tough time making converts here. The same goes for Apple, I don't think the people using Linux have a good incentive to choose Mac.

Mac on the other hand is very much a consumer OS, and apparently Microsoft thinks they can poach some of those users or at least prevent converts. IMHO I think the Microsoft adverts are at least honest, PCs are cheaper. The Mac adverts are simply playing on peoples perceptions that PCs are slow and virus ridden when in fact this just isn't the case. I could respect them if they played to the strengths of their own platform instead of having to make up fud about PCs. Macs are a valid platform in their own right and they have their own niche no need to try and justify the higher price by making up lies about the competition.