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photo: ASSOCIATED PRESS (STEVE BALLMER)

OVERVIEW

The use of iPhones is a sensitive issue at Microsoft headquarters

Thousands of Microsoft employees are iPhone users, but the company encourages employees to be loyal to phones that use Microsoft’s own mobile-phone software

With more than 25% of the market, Apple’s iPhone is far ahead of competing Windows-based smartphones

LINKS

LAPTOP KILLER?: The iPad comes close. Article

MOBILE NANNY: Monitoring kids’ cellphone use. Article

 

 

Teachers Article  
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Touchy Subject
At Microsoft headquarters, employees can’t show off their iPhones

May 2010 | Technology
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By NICK WINGFIELD
The Wall Street Journal

Microsoft employees are passionate users of the latest tech toys. But there is one gadget love that many at the company dare not name: the iPhone.

The iPhone is made, of course, by Microsoft’s longtime rival, Apple. The device’s success is a nagging reminder for Microsoft executives of how the company’s own efforts to compete in the mobile business have fallen short in recent years. What is especially painful is that many of Microsoft’s own employees are nuts for the device.

The perils of being an iPhone user at Microsoft were on display last September. At an all-company meeting in a Seattle sports stadium, one hapless employee used his iPhone to snap photos of Microsoft Chief Executive Steve Ballmer. Mr. Ballmer snatched the iPhone out of the employee’s hands, placed it on the ground and pretended to stomp on it in front of thousands of Microsoft workers, according to people present. Mr. Ballmer himself uses phones from different manufacturers that run on Microsoft’s mobile-phone software.

IN PLAIN SIGHT

Despite Mr. Ballmer’s theatrics, iPhone users are in plain sight at Microsoft. At the sprawling campus in the Seattle suburb of Redmond, Wash., workers peck away on their iPhone touch-screens in conference rooms, cafeterias and lobbies. Among the top Microsoft executives who use the iPhone is J Allard, who helped create the Xbox game console and is chief experience officer for the entertainment and devices division.

Nearly 10,000 iPhone users were accessing the Microsoft employee email system last year, say two people who heard the estimates from senior Microsoft executives. That figure equals about 10% of the company’s global work force.

For many top Microsoft executives, seeing so many iPhones around the office is a bit like how a Coca-Cola manager might feel seeing underlings drink Pepsi—especially since Microsoft makes its own cellphone operating software, Windows Phone.

Employee iPhone use has led to some spirited discussions among Microsoft executives. At a retreat last year for dozens of senior Microsoft executives at its corporate campus, someone asked about employee use of iPhones in a question-and-answer period.

According to several people present, Andy Lees, a Microsoft senior vice president who oversees development of the mobile-phone software business, and his boss, Robbie Bach, explained that Microsoft workers often use rival products to better understand the competition.

Kevin Turner, chief operating officer, dismissed that explanation, these people said. Mr. Turner said he discouraged Microsoft’s sales force from using the iPhone, they added.

Mr. Ballmer took a similar stance at the meeting. He told executives that he grew up in Detroit, where his father worked for Ford Motor, and that his family always drove Fords, according to several people at the meeting.

Some Microsoft workers take pains to hide their iPhones. While rank-and-file workers tend to use the iPhone openly around their peers, some conceal them within sight of more senior executives. One Microsoft worker says he knows several colleagues who try to disguise their iPhones with cases that make them look more like generic handsets.

“Maybe once a year I’m in a meeting with Steve Ballmer,” said this employee. “It doesn’t matter who’s calling, I’m not answering
my phone.”

APPLE SMOOTHIE

Some executives have openly renounced their iPhones. Stephen Elop, president of Microsoft’s business division, used Apple products before Mr. Ballmer lured him to Microsoft in early 2008. But at a meeting of Microsoft sales representatives after joining, Mr. Elop placed his personal iPhone into an industrial-strength blender and destroyed it, says one witness.

Microsoft isn’t uniformly opposed to employees using Apple products, in part because it makes some software and services for them. Apple’s Macintosh computers are common in the Microsoft group that makes the Mac version of its Office software.

Still, Apple’s ascendancy in mobile phones has been tough
to stomach.

The iPhone accounted for 25.1% of the U.S. smartphone market during the three months ended Jan. 31, compared with 15.7% for phones running Windows Phone software, according to comScore. Windows mobile phones have lagged some of the innovations of the iPhone, including Apple’s slick Web browser and the App Store for downloading software onto the device.

But there’s positive buzz among Microsoft employees and others in the technology industry about an overhauled version of its software, Windows Phone 7 Series, expected to be on handsets in time for the holidays.

One person who isn’t jumping on the iPhone bandwagon is Microsoft co-founder Bill Gates. In an appearance on “The Daily Show” in January, host Jon Stewart asked Mr. Gates if he can have an iPhone, now that he has left his full-time duties at Microsoft in 2008 to focus on philanthropy.

Mr. Gates, who remains chairman of the company, replied: “I’m a very loyal Microsoft user.”