Microsoft CEO Ballmer laughs at Apple iPhone

Microsoft CEO Steve Ballmer, alongside Nortel CEO Mike Zafirovski, spoke with CNBC Business News’ Scott Wapner today regarding a variety of subjects, including Microsoft’s Zune and Apple’s iPhone and iPod:

Wapner: Steve, let me ask you about the iPhone and the Zune, if I may. The Zune was getting some traction and Steve Jobs goes to Macworld and he pulls out this iPhone. What was your first reaction when you saw that?

Ballmer: (laughs) $500 full-subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine. Now, it may sell very well or not, I, you know. We have our strategy, we’ve got great Windows Mobile devices in the market today, we, you can get a Motorola Q phone now for $99, it’s a very capable machine, it’ll do music, it’ll do, uh, Internet, it’ll do email, it’ll do instant messaging. So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.

Wapner: How do you compete with that though? He sucked out a lot of the spotlight in the last few weeks because of what happened at Macworld, not only with the iPhone, but with the new iPod. How do you compete with that, with the Zune?

Ballmer: Right now, well, let’s take phones first. Right now we’re selling millions and millions and millions of phones a year, Apple is selling zero phones a year (half smile). In six months, they’ll have the most expensive phone by far ever in the marketplace (laughs) and let’s see (shrugs), you know, eh, what’s the expression, let’s see how the competition goes. In the case of music and entertainment players, Apple ob.., uh, absolutely has a preeminent position. We said we wanna be in this market, there’s a lot of reasons why there’s synergy with other things that we’re doing, we think we’ve got some unique innovations – particularly what we’re doing with community, with wireless networking. And, we came into the market, a market in which they are very strong, and we took, I don’t know, but I think most estimates would say we took about 20-25% of the high end of the market. We weren’t down at some of the lower price points, but for devices $249 and over we took, you know, let’s say about 20% of the market. So, I feel like we’re in the game, we’re driving our innovation hard, uh, and, uh, okay, we’re not the incumbent, he’s the incumbent in this game, but, uh, at the end of the day, he’s going to have to keep up, uh, an agenda that we’re gonna drive as well.

Wapner: You still feel like you can be very competitive in that space?

Ballmer: Sure. Absolutely. If we didn’t think there was transformation going on, we woudn’t be playing.



Full CNBC video: http://www.cnbc.com/id/15840232?video=167100574

MacDailyNews Take: It is very evident that Ballmer has nothing. That he goes straight into FUD mode with the outright lie that Apple’s iPhone is “the most expensive phone by far ever in the marketplace” shows fear. Apple’s iPhone does have a keyboard, of course, as Ballmer probably knows full well; maybe not, as he seems to lack understanding about prices, DMP market share, and more.

Microsoft’s Zune is a primitive device to begin with; next to an iPhone, it is even more of a joke than it is now, if that’s possible. Today’s so-called “smartphones” with Windows Mobile and other operating systems look like last decade’s technology next to Apple’s iPhone.

Ballmer can bluster all he likes with nonsense such as “we’re driving our innovation hard” and babbling about some unknown “agenda” that Microsoft’s supposedly “gonna drive,” but he has nothing of substance to offer.

Microsoft should be embarrassed at their total lack of innovation and Microsoft should be embarrassed that they even have Steve Ballmer as an employee, much less as their CEO.

Related articles:
The massive FUD campaign against Apple’s iPhone ramps up – January 10, 2007
The Motley Fool: Apple makes Microsoft’s Zune a paperweight – January 10, 2007
RealMoney’s Comeau predicts: ‘Microsoft will kill the first Zune media player by midyear’ – December 16, 2006
Microsoft Zune plummets to 5th place in U.S. digital media player market share with 2.1 percent – December 04, 2006

133 Comments

  1. I laughed last night when Ballmer’s name followed Jobs’ and Wozniak’s on the ABC tv show Boston Legal as examples of technology geniuses who could save Homeland Security – i.e. “the Steves.”

    I thought it was HS adoption of MSFT tech that got us into this mess? Maybe OS X can get us out?

    In other news – 1Bn profit on 7Bn earnings. $1.14 profit per share. Not bad for a beleagured computer company!

  2. OK, riddle me this… When the RAZR debuted, it was a whopping 500 dollars. And it’s claim to fame was simply that it’s thin and makes phone calls. But the UI sucks face. Why has no one pointed this out?

    Of course the price of the iPhone will trickle down once the R&D expenses have been recouped! So I say phooie to anyone saying it’s too expensive. It offers 100 more features than the RAZR ever did or does right now!

    I am getting one anyway!

  3. someone remind me..when exactly was Zune getting traction? i don’t seem to recall that..

    It was mentioned in a Steve Jobs keynote – that’s at least something…! ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  4. This thread should be retitled, “Steve Ballmer worth $20 billion to… Apple Inc.” Having that nimrod at the helm is a godsend for Apple.

    In other news, it’s nice to see that Zune Tang is apparently picking up some freelance work writing “talking points” for Ballmer.

  5. i guess that ballmer doesn´t know what he is talking about when it comes to electronics,maybe when they are at M$ they only go to mac fan sites to see if we go down,maybe in near future M$ is going to have to begin with a new brand like Microshit,its what they always been since windows 3.1

  6. “The Zune was getting some traction”
    Doesn’t that cause skidmarks?

    Anyow, I can just Ballmer sitting there, nervously answering with a slight grin/grimace, clumsily trying to juggle the steel balls in his hand and the quetions at the same time, sweat shooting out all over his head likea chia pet gone bad…desparately wanting a towel, a chair, anything to defray the reality of the moment.

  7. Origami disaster=Virtual keyboards-so users want a physical keyboard and not the virtual one you provided?.
    MS Mobile 5=Restart at least once a week(I know I have it)-so a throwback to windows 95/98 is high tech and innovative?

    Hmmm, Uncle Fester should not be so jolly-Apple is coming to eat your lunch.

  8. I saw a Zune in person for the first time a few weeks ago…it has got to be the ugliest, most crass consumer electronic device I’ve ever seen. The first-gen iPod is classier than that piece of junk. I wouldn’t even want to be seen holding one.

  9. Ballmer’s an idiot. Most expensive phone? Has the fool seen what smarthpones cost? Has he seen what some Nokia and Sony/Eriksson phones cost? They go for as high as $800!

    The man wouldn’t know the truth if it bit him on the butt.

    Bozo

  10. Just wait until the true video iPod comes out in a few weeks, with the same touch-screen as the iPhone, sells for $300, is 120MB or more, smaller and thinner than even the Brown Zune.

    I think Ballmer meant 20% of the non-iPod $249 and above high-end MP3 player market. He just couldn’t remember all of those conditions.

  11. It’s good to hear Ballmer claiming that Zune accounts for 20% of the upper end of the MP3 player market.

    As Apple have sold 21 million players in the last quarter, let’s guess that maybe 25% of them are upper end models, so that’s about 5 million.

    Therefore in order to reach 20% of just the iPod market, Zune will have sold a million units, which Microsoft weren’t expecting to do before June 2007.

    I’m astonished that Ballmer didn’t highlight this amazing achievement. Or is he just a pathetic liar who is too stupid to consider whether his lies are remotely plausible ?

  12. Balmer originally used the reason, that people wouldn’t want to walk around with seperate devices in their pockets, for disliking the iPod. Now that Apple has actually made what seems like the perfect device for Steve Balmer, he’s pretty damn screwed 😀

    I do not feel sorry for him.. I feel sorry for his kids!

  13. I have personally only seen two, yes that’s right 2, people with Zunes out in public, so I don’t know how they got 20 percent of the high-end music player market.

    OAN, I didn’t know that Microsoft sold phones, I thought Motorola did. It is the Motorola Q running Microsoft Windows Mobile, right? Talk about misleading statements!

    MW=”body” as in get M$ a body bag, they’re dead

  14. I say we all chip in and get a nice collar and leash for him so Bill can reign him in. A choke collar would be nice. Or maybe one of those collars that delivers a mild shock. That way, everytime he starts to rattle off his phoney baloney platitudes Bill can be sitting in his office and press the big red button. It would be a joy to watch THAT TV interview.

  15. Microsoft makes a lot of money. Filthy, obscene amounts of money. Name me one human entity be it corporation, religion, Icon , mullah ….etc that is embarrassed about making lots of money. MDN you fling the wrong shame upon the 800lb gorilla. They should be ashamed of the quality of most of their products innovation aside. If Ballmer wants to laugh at the most expensive phone… how about the most expensive bloatware on the planet the Microsoft Works suite

  16. I love the fact that Ballmer blasts Apple for offering a high-end phone that is too expensive to succeed, and then goes on to boast that the expensive Zune is successful because it is placed at the high end of the market.

    This guy went to Harvard?

  17. Yep KenC, Ballmer just lost and monkeyboy doesn’t even realize it. Ultra-Mobile PCs it would seem have been eliminated with the advent of the iPhone. And then Apple can always do a cheaper Shuffle-like version of the iPhone as a straight phone avec iPod. The versatility of the iPhone is yet to be fully utilized—it may prove to be another iPod phenomenon.

  18. Oh dear what an ass. “we’ve got some unique innovations – particularly what we’re doing with community, with wireless networking”. In case you hadn’t noticed the iPhone has wireless built in that can actually be used for something more than squirting brown crap to another non-existent ZuneTurd. You are a bum. But I like you. You make me laugh for hours fat boy.

  19. Pathetic!

    Ballmer math: (No one has a Zune) / (Everyone has an iPod) = 20%-25%

    WTF!!

    And anyone with any experience in this market knows that there are smart phones that don’t have half of the iPhone’s capabilities available *today* that cost more than the iPhone. Go check in any cell phone store. And he knows that.

    Incompetent boob.

  20. Does anyone remember the episode of The X-Files in the last season where The Lone Gunman have fallen on hard times and have been forced to sell their Macs and get one lone buggy, and unreliable PC running Windows XP (I nearly wet my pants at that one)? The only reason most people use Windows at all is because they are forced to. The crack they are smoking in Seattle must be pretty special crack if Ballmer is any indication . . . and it’s amazing what they’ve done with ape cross-breeding. Very cutting edge stuff, kids.

  21. “And, we came into the market, a market in which they are very strong, and we took, I don’t know, but I think most estimates would say we took about 20-25% of the high end of the market.”

    …For any sufficiently narrow definition of “high end”.

    less than $245: low end
    more than $245 and less than $250: high end
    more than $250: super high end

  22. botton line…….he’s worth 20 plus billion and doesn’t give a crap about your opinions

    i would gladly trade places with ballmer, including that ugly mug & body for that kind of dough. wuold you trust your girlfriend if she had a chance to be mrs ballmer or his mistress?

    i envy steve ballmer!

  23. Did MDN insert all those “Uh” remarks in Ballmer’s ravings or is that verbatim? I didn’t get to actually see the video. Maybe when I get home. If they didn’t, Ballmer really is a fat sack of lying, stupid shit.

  24. MSFT is shipping millions and millions of phones? Really now Mr. Ballmer, last I checked your bug-riddled, crippled OS was merely loaded onto other’s phones – you make it sound like MSFT designed and sold their own phones. The truth is that you shelved your home phone hardware because you couldn’t even sell that!

    As someone that made their living on MSFT technology, I’m embarassed at the direction SB has taken MSFT. He’s done a great job of running a good OS into the ground.

    On top of that, lies will get you no where.

  25. And people still wonder why M$ can’t deliver great products…
    With the CEO of the company being such a moron, how could they?
    The guy can’t even talk properly… I would never trust a CEO that hesitates so much in a conversation.
    Truly pathetic.

  26. “And, we came into the market, a market in which they are very strong, and we took, I don’t know, but I think most estimates would say we took about 20-25% of the high end of the market.”

    Right before he reels off his 20-25% stat, he states that he doesn’t know.

    WTF?

  27. Zune is getting traction.

    the only traction is from brown skid marks…

    And we all know where that is from.

    no amount of traction can help you on a slippery slope

    and yes, Balmer can be held accountable for “hype” BUT who is going to nail him?

  28. Balmer can be held accountable for “hype” BUT who is going to nail him?

    Surely all it takes is one “disappointed” shareholder. And a team of parasitic lawyers, or – as I like to call them – lawyers.

    If you really want to nail him, buy a few shares. And then start a class action.

  29. Hahaha! Just wait until the iPod line is refreshed with 60/100 GB models using the same functionality as the iPhone (minus the cell phone parts which allow for the harddrive). Voila. Instant WiFi iPod running a full version of OSX and can iChat, do photos, video, music, and whatever else it will be able to do by the summer.

    Poor Balmer.

  30. Q: What was your first reaction when you saw it?

    A: He obviously didn’t see it. No keyboard? Overpriced?

    It is an iPod ($199 for 4GB or $249 for 8GB), a phone ($399 for a “smart” phone like a Blackberry), and an internet navigator unlike anythin g on the market today ($you name the value here$).

    You cannot buy a $99 phone and get the package of services that Apple gives you. There is NO comparison because no one else can use OS X, or iTunes.

    His real reaction was to throw several Zunes against the wall, and a few chairs through the window.

    Apple just made all the smart phones on the planet dumb phones.

  31. Ballmer… one of the greatest standup comedians of our time. His “delusional” routine is very realistic too. Nobody does it better, not even the other Stooges: Dvorak, Enderle, Thurrott. Hope those guys get together to make some movies; the world needs more belly-laughs. Glad to see MDN has a Comedy section.

  32. most expensive phone ever on the market ….or… cheapest portable Mac on the market..

    Let’s wait and let Ballmer figure it out..

    The look on his face.. man.. he’s pissed

    No respect for MS at all. Ouch.

  33. Come on now, people. Monkey Boy Ballmer is using karl Rove’s tried and true technique:
    “Keep repeating the lie until people swallow the load as truth.”
    It got W elected and re-elected; i can work for Monkey Boy, too.

    MWL “values” as in “he ain’t got none…”

  34. Laugh Ballmer laugh. Your words are on record. Pray that you don’t have to eat them.

    We have our strategy, we’ve got great Windows Mobile devices in the market today, we, you can get a Motorola Q phone now for $99, it’s a very capable machine, it’ll do music, it’ll do, uh, Internet, it’ll do email, it’ll do instant messaging.

    So why didn’t any of your “great” Windows Mobile devices get international attention during CES, like Apple’s iPhone did?

    So why don’t those “very capable” machines have any buzz?

    So why doesn’t every kid have one of your phones dangling next to their iPod?

    Wait, I’ll answer: because there’s no such thing as cheap class. It takes more than discount prices and mishmash hardware to make a hit. Phones aren’t PC’s.

  35. it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good email machine.

    First, Blackberry has that market.

    Second, I don’t get the notion of TYPING on a PHONE. Why not pick it up and make a call?

    Third, iPhone renders cellphone keypads obsolete. From here on out it’s either touch or handwriting.

    And last but not least, as backwards as Ballmer is he prolly thinks a “business” iPhone also needs an 800k floppy drive, a DOS prompt, and a PS/2 mouse…

  36. “OK, riddle me this… When the RAZR debuted, it was a whopping 500 dollars. And it’s claim to fame was simply that it’s thin and makes phone calls. But the UI sucks face. Why has no one pointed this out?”

    THANK YOU. Actually, I have irritated many, many people pointing out just this fact. This is all the proof you need that price is NOT a barrier to a great product. Not even an *okay* product.

  37. Twenty percent of the market for MP3 players $249 and up? What a flat-out LIE. They didn’t sell one of these for every 4 high-end iPods. Not even close. If you’re going to make numbers up you should send a flunkie to do it so you can claim later he spoke out of turn. Sending your CEO is pretty pathetic.

  38. Oh, making fun of Zunes, my favorite. My sister got a Zune for Christmas, only because she hates Apple (her crazy boyfriend has brainwashed her into thinking Apple makes products that don’t function). My favorite joke with it is “Welcome to the Social…of 5 people worldwide…wait, now it’s 6 cause you have one!” And not to toot my own horn, but i think I’m right there. I haven’t seen ANY people in public with Zunes, other than my sister, who actually likes the piecer. Anyway, just thought you people would like my joke…

  39. The fact that the iphone will only rely on touchscreen is seriously limiting its email capabilities……your fingers need feedback. PERIOD.

    The iphone is cute, user friendly but for corporate usage it cannot seriously compete with Blackberry , symbian and windows mobile phone …..if you add the price tag….good luck!

    cheers

  40. “I don’t know, but I think most estimates would say we took about 20-25% of the high end of the market. We weren’t down at some of the lower price points, but for devices $249 and over we took, you know, let’s say about 20% of the market.”

    Liar, liar, pants on fire. The Zune has dropped out of the top 100 electronic devices. Creative, SanDisk and of course Apple are selling MUCH better than Zune. At best the Zune took an order of magnitude LESS than Ballmer quotes, meaning 2% of the market, and dropping. Yawn.

    Guess we’ll all be laughing at Ballmer when the Zune fails to reach the 1 million unit sales by July. What a dope, as usual.

  41. I predict in a year’s time Apple will have at least 5% market share of mobile phones sold.

    The pre-order que is through the roof – everyone I have spoken to, even anti-Apple Nerds (Simon Wilding – rofl!) say they will buy one.

    It makes me laugh, alot of people who are working in the mobile internet business have such an anti-innovation attitude – it’s laughable.

    Maybe they think there work they are doing is obsolete (which everyone know it is because technology is moving so fast!).

    To them I say – suck this!

    Apple HAS CREATED THE CONVERGENCE DEVICE! THAT NO OTHER COMPANY COULD EVER MAKE – GET USED TO IT SUCKERS.

    ROFL…

  42. How can a stupid guy like him becomes a CEO?

    “Microsoft has sold billions and billions of phone, Apple zero” errrrrrr because Apple is not yet selling phone, DUMBASS?

    “iPhone is not a good phone because it doesn’t have a keyboard” even more stupid.

    “Now, we have Zune it’s better than iPhone” They’re of different product category, you morron!

    etc etc

  43. Well, you guys FINALLY figured me out. This is Steve Ballmer and I have enjoyed adding some life to your message boards. I am happy to have converted some of you over to my social, the Zune.

    Steve

    Microsoft Resident Fat Ass and Embarrassing Pig

  44. What do you expect him to say?

    “Yes, Apple is beating us on every front and we have no hope, to, uhh, catch them. They’ve turned the tables on us, um, we used to be able to innovate after they made a new product. We’d get it saturated into the market in no time. But, lately, they’ve uhh, been able to saturate the market before we could copy, err, innovate a new product. We’re basically, screwed. But we have so much money that it really doesn’t matter, for a long while. Our strategy right now has become to wait it out and hope our money lasts longer than Apple’s current run of success.”

  45. This guy is an embarassment to the company. He is very bad with the media and just makes a fool of himself everytime he opens his BIG Mouth. Apple has a very solid agenda and it looks like Microsoft has absoulutely nothing!

  46. Just wait… Once the iPhone is released, Apple will come out with the real “iPod video” which will look very similar to the iPhone but will have screen where the speaker at the top and home button at the bottom are. It’ll be a little thicker to accommodate the new 100GB HDD and also keep the wi-fi and Bluetooth. The interface will be exactly the same multi-touch UI as the iPod interface on the iPhone. This iPod video will blow away the current Zune and any future Zunes.

    Microsoft will lose ground on the following fronts: Windows Mobile, Windows OS (in the consumer space), Zune, Windows Media, Xbox (only decent product MS has EVER made, except SQL Server).

  47. Well, one thing that you can say is that Microsoft has worked hard to create software for mobile products. Apple is way behind in this technology, that’s true. But, Apple also is putting their minds to this, and I see them catching up quick with what Microsoft has done, and iPhone has a lot of promise. So, Balmer is definitely doing some negative spin to keep going.

  48. Where, oh where, did Ballmer get this idea that Zune took 20-25% of the music player market? Oh, I’m sorry, the “high-end” market? Where? Who said that? He’s either delusional or he’s getting bad info. Jesus! How did the reporter let that go by? Reporter, my left butt cheek. Shill. Somebody give this man a pill. I don’t care what kind. Just give him a pill and send him out the door.

    Things that make you go “Sheeesh!”.

  49. He’s saying that Apple won’t sell very many phones. Correct if I’m wrong. But, isn’t Apple only shooting for 1% of the market? which happens to be 10 million phones. Correct me again. Didn’t MS say that the strategy for Zune was to take a SMALL chunk of iPod? He’s condemning Apple for basically the same strategy they themselves implemented.

    He also said ‘uh’ a lot which means he’s shooting from the hip.

  50. you ignorant apple people are all the same…all fruits.

    he said “$500 fully subsidized” is the most expensive phone ever; maybe, now-just maybe alluding to the fact that maybe the phone is more than $500…?

    also, the iphone doesn’t have a keyboard; it has a touch screen that functions as a keyboard…the devil is in the details.

    use some logic while constructing your argument, wicked zealots…

  51. a fully subsidized moto razr and slvr and krzr when released cost 300+dollars and thjey are just phones!

    a FULLY subsidized Palm costs 399, and thats not the treo 750 that the 650(or on ballmer terms the old one), the moto Q when released cost $500 FULLY subsidized it has been out for about a year now and costs have been recovered.

    “the most expensive phone ever in the marketplace” i dont think so, my blackberry 7100t (RIP) cost 499 with a contract extension from t-mobile in 2005. so fuck off

  52. someone remind me..when exactly was Zune getting traction? i don’t seem to recall that..

    I know, put a couple of those Zune bricks on the bottom of your boots on a snowy winter day and you’ll get some great traction!

  53. When he says “enterprise” and that the iPhone doesn’t fit into it, he’s trying to say Exchange. That bug ridden, useless piece of sh*t of an email system that causes more problems than it solves. It cheeses me to think that many IT departments fall into this mentality (as well as everything Microsoft) that Microsoft is all about the “enterprise” when they can’t touch the uptime and flexibility of UNIX and UNIX-like operating systems.

    Now remember, when Microsoft or their minions say “enterprise,” they really mean Exchange.

  54. you know, reading ‘Macdaily News Take’ in the article above is what drives me crazy about Apple fanatics. I’m a macintosh user, an itunes user an ipod user, they’re great devices. Mac-fanatics are so ridiculously out of their mind when it comes to appreciating or reacting constructively to ‘others.’

    Let’s face it, Apple sells less machines than Gateway Computer. The iPod is a good device, but it’s far from perfect. The Zune, for a V1 device is great. Not to mention the fact that MSFT is kicking the crap out of Apple with their XBOX platform, they’re connected to nearly 5M home theaters, they have one of the most compelling HD-DVD offers.

    Let’s not bad mouth them … let’s demand more from Apple, fact is, they’re behind and as an Apple loyalist, I want more. iTV… please, why don’t we just hand it to MSFT on a silver platter. MORE MORE MORE innovation!

  55. It’s professional courtesy (even when you don’t respect said professional) to omit “Umms” and various other stutters when quoting someone, unless it conveys a specific context in the phrase.

    In this case, it’s just kinda mean.

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