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:

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


  1. 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.

  2. 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

  3. “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.

  4. 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.

  5. 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.

  6. 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.


  7. 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.

  8. 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 ?

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