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Is Apple iPhone’s price too low?

Apple Store“Microsoft CEO Steve Ballmer on the iPhone, during an on-stage interview at the CEO Forum with USA Today’s David Lieberman,” John Gruber writes for Daring Fireball.

There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get. – Microsoft CEO Steve Ballmer

Gruber writes, “Strong words, and an awful lot of competitive FUD packed into one short paragraph.”

“I’ve stashed away a slew of ‘iPhone doubter’ links over the last few months from various pundits and analysts, and the iPhone’s price, by far, is the most frequently cited reason for predictions of doom in the marketplace,” Gruber writes.

Gruber writes, “Some of these pundits and analysts are morons. Ballmer, however, is a very smart man, but what he’s saying about the iPhone is going to make him look stupid if it’s successful. He clearly doesn’t get what makes the iPhone so appealing, and his dual obsession with the price and business users is baffling.”

“Maybe I’m the moron, but the way I see it, if the iPhone’s initial price is wrong, it’s too low, not too high. Don’t compare it to other smartphones, which, yes, nearly all cost less than $499 when purchased with a plan. Compare it instead to the prices of the iPod,” Gruber writes.

Full article here.

[Thanks to MacDailyNews Reader “Twilightmoon” for the heads up.]

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