Microsoft 10k hints a fear of Apple

 Microsoft is running scared at Apple’s resurgence, and now warns shareholders that the Steve Jobs-led company could be a threat to Redmond’s business.

Proof positive of the new fear in at Microsoft CEO Steve Ballmer’s HQ is contained within the company’s recently-filed Form 10-K. This time around, Microsoft has introduced a new risk factor that has never been there before – and while the company fails to name the company that threatens it, you can draw your own conclusions.

“A competing vertically-integrated model, in which a single firm controls both the software and hardware elements of a product, has been successful with certain consumer products such as personal computers, mobile phones and digital music players," Microsoft’s threat assessment states, adding, "We also offer vertically-integrated hardware and software products; however, efforts to compete with the vertically integrated model may increase our cost of sales and reduce operating margins.”

We’re pretty sure we know who that company is. Ballmer said last month, "In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience."

He has a plan, saying, "Today, we’re changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises."

This means we can see the near future become pretty personal, as the world’s largest software company tries to ignore the damp interest in Vista and Apple’s ever-growing market share.