Apple Talk of Microsoft's Annual Meeting

TechFlash reports: Microsoft's meeting with shareholders this morning was decidedly low-key, with investors overwhelmingly endorsing the company's compensation practices in their first "say on pay" advisory vote.

Maybe the most remarkable part was that Bill Gates was silent throughout. In a sign of the Microsoft chairman's shift away from his full-time role, he sat at the head table sipping a soda, listening to the proceedings, and writing a note to Microsoft CEO Steve Ballmer at one point. But he didn't give a presentation during the meeting, and shareholders didn't address any questions directly to him.

Ballmer, on the other hand, had plenty to say—particularly in response to shareholder questions about Macs, Windows, and the company's struggle to regain its footing in the market for mobile phones.

One shareholder told Ballmer that he believes Microsoft has a poor reputation compared with Apple among younger computer users, and particularly college students. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there," the shareholder said, saying that Apple's ads make the Redmond company look "like a buffoon."

"There's certainly always opportunities for improvement," acknowledging that there "is a group of people with whom our market share is less."

"You take any country, including this one, and you say, how are we doing?" he continued. "The truth of the matter is, we do quite well. Even among college students, we do quite well. Do we have an opportunity for improvement? We do. Some of that is marketing, some of that is phase of life. It is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows; that's a good thing. Even in the toughest market, which would be the high end of the consumer market here in the U.S., 83 times out of 100 people choose a Windows PC over a Mac."

He acknowledged that Apple has "picked up a couple of tenths of a percent of market share." When some shareholders in the audience scoffed at the seemingly minimal gains, Ballmer corrected them, saying every couple of tenths matter.

"They matter when we're increasing our Bing market share too," he said.

He added, "We're working hard on it. Windows 7, I think, gives us a real opportunity to come back again at some audiences that have been tougher for us. Frankly, the economy is good for us, because people do understand that Macintoshes are quite a bit more expensive for essentially the same computer…but we have opportunities to improve among exactly the constituency that you identify."

Later, another shareholder asked why Microsoft and Nokia don't team up to try to topple the iPhone and fend off Google's Android. Ballmer focused initially on the latter, saying he's dedicated to keeping higher market share than the new Google mobile operating system.

Ballmer acknowledged that the company has its work cut out for itself, but he pointed out that Microsoft has shifted key engineers to the Windows Mobile team, among other efforts to improve its position.

"Certainly our objective is to have the leading position amongst these players in the long term," he said. "I think we're on the right strategy, which is to focus on the software that goes into phones, as opposed to building phones."

Also during the Q&A period, a representative of the Parents Television Council praised Microsoft for dropping its sponsorship of a recent Family Guy special but questioned the company's continued advertising in other episodes of the show. Ballmer acknowledged the group's concerns and said the company is continually reviewing its approach to issues such as that.