Apple’s success with the iPod, iPhone and Mac is finally starting to worry Microsoft, according to the company’s recently filed 10-K form with the U.S. Securities and Exchange Commission. (10-K forms summarize a publicly traded corporation’s performance, as required by the SEC.)

In the filing, Microsoft says the following about a certain vertically integrated rival:

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.

That’s obviously an allusion to Apple, whose iPod is now the equivalent of Klenix or Q-Tips in terms of brand recognition; whose iPhone 3G has sold exceptionally well (despite apparent glitches and other hang-ups); and whose Mac propelled the company’s most recent, highly profitable quarter.

Compare that to Microsoft—some 18 months after it first launched, we’re still arguing whether or not Windows Vista is ready for prime time.

How many Zunes have you seen while going about your everyday activities?

What are Microsoft’s options? It seems Redmond wants to create a more “Mac-like” experience with PCs. Plug her in, and off you go. To that end, it is trying to work with hardware manufacturers to ensure a more seamless Windows experience. That shouldn’t be too hard, making Windows+generic PC work better; making it work as well as a brand new iMac, on the other hand, is a whole different matter.

As for cellphones and related devices, two words: Windows Mobile. It’s safe to call Microsoft’s mobile operating system inelegant at best. Time, then, Zune phone?

In other words, Microsoft needs to get its act together, lest Apple claim more and more market share—share holders don’t want to see that happen.

via Apple Insider