To tie this into another subject of discussion, where do Ballmer's disparaging remarks about Apple's products fit in? Is he bullshitting but believes what he says and just hopelessly incompetent at recognizing their merit? Or is he deliberately lying to try to manipulate people into buying his products?
If anything this is the reason Ballmer has to go. He has Microsoft too ingrained into his thinking. So much so that he can't see its weaknesses anymore. Which means those weaknesses don't get addressed and things go from bad to worse.
It is that surprising that is what he says in an interview? When it comes to PR, "Ballmer Says No iPods, Google in Household" is better than "Ballmer Family Uses iPods, Google". I recall Melinda Gates saying the same thing after being berated in NYT (http://www.nytimes.com/2010/10/24/magazine/24fob-q4-t.html)
It is Ballmer's/Gates' job to convince the world to use Microsoft products, not Microsoft's job to convince them. In public sphere, they are of course going to present a unified front. But in reality, I would be shocked if he actually never used a competitor's product.
Looping back to the point of the article, there is an important balancing act required where you must be able to see the potential success while still being cognizant of all the realities of what needs to be done to succeed.
So believing that Zune will supplant iPod might not have been wrong, but ignoring iPod's strengths and Zune's weaknesses is definitely wrong.
As a product guy, I would want my family to try the competition. My products should win because they are better, not by edict. You can't give an edict to the whole market!
As much as I agree with the ideology behind your statement, history has shown us that inferior products sometimes do win just because of better marketing.
Do you have any examples handy? What I often find when people say this (particularly engineers) is that they're weighting solely on theoretical engineering superiority and under-valuing things like price, life-cycle use, and common user experience.
I'm not saying you're suggesting this, I just always see things like "Betamax vs VHS" trotted out. Where the engineers spend undue time comparing visual quality specs and completely ignore things like the simple fact that Betamax tapes didn't hold enough video to record the types of things that consumers wanted to record. (movies, sports, etc)
Your comment forced me to think harder about what makes an "inferior" product. Yes, Betamax was the first example that came to mind. But, as you say, it was superior only to engineers since picture quality mattered most to them. In the same vein, Fahrenheit vs. Celsius, metric standards in general -- in my mind, it's so absurdly clear which one is "better." However, in the pro-Fahrenheit camp, there are lots of reasons (which are irrelevant to me) why people think F is better. PAL is (arguably?) better than NTSC. Linux is better than Windows.
So, I should amend my original statement and say that there are lots of products which were superior in engineering terms but lost the battle on other grounds, whether it's user-friendliness, price, availability, installed user-base -- all of which I (incorrectly) grouped into the term "marketing" in my original post.
It's a lot easier to find examples where things are all pretty much equal except marketing. Toothpaste, soap, all sorts of consumable household stuff where the only differences are color, perfume and marketing.
Marketing is very much a part of the whole product and is included in my comment. Only engineers think the product is just the bits (either 1's and 0's or plastic :).
