Ballmer has been forced to admit that Apple is becoming a growing threat to Microsoft – a company that once looked unassailable.
The chief executive made the acknowledgement in an internal memo to Microsoft employees yesterday, saying that: "In the competition between PCs and Macs, we outsell Apple by 30-1. But there is no doubt that it is thriving.
"But why? Because it is 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."
However, while the memo was sent to internal staff, there is no doubt that it was intended for the company's hardware partners. "Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises."
Hardware issues were one of the biggest detractors at the launch of Vista.