Ballmer: Apple won’t dominate the smartphone market

“Microsoft CEO Steve Ballmer visited Silicon Valley on Thursday for his annual meeting with top venture capitalists to talk about Microsoft product strategy,” Michael Arrington reports for TechCrunch.

On mobile phones and devices, Ballmer said:

I’ll call anything that’s north of 300 million a year non-niche. PC’s are not niche devices. Part of the reason I think they’re non-niche devices is, multiple people can manufacture them, they all interoperate, they work together, etc. TVs are not niche. You know, there’s more than, well over 300 million of those sold a year. They interoperate in that case mostly based on standards, but with some innovation. Phones are not niche. The categories where, I think, a single player can control a large percentage of the volume are the smaller categories. What does Apple sell every year of iPods: 30 million, order of magnitude, something like that. What is the whole video game market is maybe 30 or 40 million in units a year. But when you get these categories that are 300 million, 500 million, a billion, a billion-five a year, the truth of the matter is you’re gonna want multiple points of manufacture, with a lot of innovation around it whether its supply chain, for geographic diversity, and our basic play with our software is to try and be super high volume. So I think you can have an Apple in the phone business, or a RIM, and they can do very well, but when 1.3 billion phones a year are all smart, the software that’s gonna be most popular in those phones is gonna be software that’s sold by somebody who doesn’t make their own phone. And, we don’t want to cross the chasm in the short run and lose the war in the long run and that’s why we think the software play is the right play for us for high volume, even though some of the guys in the market today with vertically oriented solutions may do just fine.

Full transcript of the interview and video here.

MacDailyNews Take: By SteveJack

First of all, Ballmer’s very careful definition of “niche” to suit his own purposes, doesn’t make it niche. Personal media players are no longer “niche.” And, guess what: iPod, with Apple’s software is by far the most popular, not software “sold by somebody who doesn’t make their own” devices.

Ballmer obviously can’t or won’t learn. His company’s one time lucky break with the PC isn’t going to be replicated. Google is trying it with mobile devices, but it won’t work. Google won’t get 90% of devices, but, if any company could, it’d be Apple. Microsoft is not even part of the discussion.

Apple builds complete ecosystems, not just an OS to load onto a bunch of disparate devices. iPhone already has more accessories than all other smartphones combined. In 2 years, iPhone already has 5 times the total apps of Microsoft’s Windows Mobile OS after a decade in the market. Windows Mobile is a failure. Mobile devices simply aren’t going to mirror the PC market. Microsoft’s scheme worked back when most people were tech illiterates and the products were very expensive; people bought what they were told was “good enough” and based on sticker price. Today, more and more people want devices that work and recognize that, by far, Apple’s devices work best, have the most apps, work perfectly with iTunes and iTunes Store, have iPods built-in, have the most accessories, have the most vehicle support, etc. Plus, Apple’s iPhone starts at US$99, not two or three grand or more like personal computers back when Microsoft took their share.

Microsoft and Google are pursuing what seems like a sound strategy at first glance, until you look at the iPod or walk into your local Target or car dealership or want a specific app and see that everything’s for iPhone. Consumers notice this fact and say to themselves, “I’ll get an iPhone because it’ll work in my car, with my gym equipment, with my Nike sneakers, with my glucose monitor, with my iTunes, heck, with everything; plus I can get any case or app for it that I could ever want. Anyone else’s phone would be far too limiting.”

And, by the way, Apple already dominates the smartphone market, just look at the number of fake iPhones and App Stores that have been and are being trotted out to see who’s clearly dictating the thinking within, and the direction of, the market.

For future use, I’ve added Ballmer’s comments to our MacDailyNews iCal along with all the rest of his incorrect iPhone pronouncements.

SteveJack is a long-time Macintosh user, web designer, multimedia producer and a regular contributor to the MacDailyNews Opinion section.


  1. There was an old movie from the 60s I believe, that there was another earth directly opposite us on the other side of the sun. We could not see it because of it’s position.
    They were just like us in every way, except one critical thing. Everything was opposite on that earth.

    Ballmer must have crash landed here instead of his home planet.

  2. By Ballmer’s own definition of 30 million units or less per year, WinMo, X-Box, Zune and all MS Plays4Sure mp3 players all ALL niche products.
    MicroSoft sold LESS than 20 million WinMo licenses last year. Ballmer’s idea of hundreds of millions of WinMo Phones by dozens of hardware vendors is pure fantasy. It simply is NOT happening.

  3. Hmmm…

    Just like with it’s line of computers, I don’t think Apple wants to be the Microsoft of smart phones.

    If Apple were to license the iPhone OS and be a “non-niche” player and own 90% of the Smart Phone market, it’s profit margins would fall to almost nothing. Look at Dells margins for their computers.

    Apple is most likely very happy being a “niche” Smart Phone with decent profit margins.

  4. Windows Mobile is a joke. Manufacturers hate it. Consumers hate it. Even the windows fanboys that comment on Gizmodo hate it. Ballmer doesn’t seem to realize that in order for his plan to work, he needs mobile software that phone manufacturers want to sell and consumers want to buy. After more than a decade of development, Windows Mobile is far behind iPhone OS, WebOS, and Android, and that’s just pathetic. I agree with the MDN take, there is no way Microsoft’s fluke success with with Windows is going to be recreated on the iPhone.

    And that’s not just because Windows Mobile sucks, but because equipment manufacturers are much wiser now than they were in the late ’80s and early ’90s, they know how Microsoft operates, and would rather not partner with them if at all possible. Manufacturers who want an iPhone ripoff using a one-size-fits-all OS will choose the far superior (and free) Android rather than Windows Mobile.

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