Audience gave Schiller the exact response he wanted (notice the silence and the delayed laughter). On paper it look like Apple is giving credit to Microsoft, but the subtext is: it's a joke, don't take the sentence too seriously, and Apple is still better at productivity.

I don't know - Microsoft is massive in businesses. You only see Macs at web development companies or design agencies, typically. And even then if they grow in size a Windows AD machine may be in a back room because SOHO is the only server system Apple targets. They are pretty productive and Office is widely considered a necessity. (I could be wrong, btw)

I thought it was quite a complimentary thing to say.

If it was a joke, then it's far more likely that the exact response he wanted was laughter, but he got awkward silence instead.

But I dont think it was meant as a joke at all. If he didnt want to praise Microsoft, he could have left out the line; there was no reason to resort to mockery disguised as praise. Microsoft could not have said, "we wont demo our products unless you say we are best at productivity". Apple holds all the cards.

Didn't think about that but now that you mention it, nice catch... heh totally true.