Steve Ballmer still doesn’t understand why Apple’s iPhone succeeded

“Former Microsoft CEO Steve Ballmer is right about one thing: Microsoft waited way too long to get serious about mobile,” Ina Fried writes for Recode. “But he is wrong about another point he has been making of late. In an interview with Bloomberg TV, Ballmer suggests that part of Apple’s innovation was convincing carriers to subsidize the phone.”

I wish I’d thought about the model of subsidizing phones through the operators. You know, people like to point to this quote where I said iPhones will never sell, because the price at $600 or $700 was too high. And there was business model innovation by Apple to get it essentially built into the monthly cellphone bill. – Steve Ballmer

“In reality, plenty of phones were subsidized before and after,” Fried writes. “To be fair, the subsidy for the iPhone was larger than that given to other phones, but BlackBerrys and other smartphones were already being subsidized by carriers when the iPhone debuted.”

Fried writes, “In short, it was the power of the iPhone, not its pricing, that made the phone a hit.”

Read more in the full article here.

MacDailyNews Take: Which is why he’s now spending his time writing giant checks to guys in shorts for running up and down courts attempting to throw balls through hoops. Easy-to-understand, simple pursuits are best for Monkey Boy, but even successful basketball team ownership eludes him.

Steve Ballmer, the world’s luckiest blockhead. A more fortunate dorm assignment than Ballmer’s will never happen.MacDailyNews, August 26, 2015

Bill Simmons: Clippers owner Steve Ballmer has shown ZERO evidence that he knows what he’s doing – August 26, 2015
LA Clippers owner Steve Ballmer to dump team’s Apple iPads – September 25, 2014


  1. Given the utterly craptastic failure of MS mobile strategy, is this even remotely surprising?

    As I said when MS bought Nokia, “like two dinosaurs mating.” They might have a few offspring, but it wasn’t going to matter once the meteorite hit.

    1. The MS mobile strategy was indeed a failure but they’re not done. They have a new phone in the pipeline and I have to admit it looks like it takes some cues from the very nice Surface Studio.
      The MS phone will actually run Windows apps. Imagine an iPhone that ran Mac apps and had all the power of OS X at your fingertips. That would be friggen’ awesome but you know it won’t happen. Apple keeps telling us that their processors have desktop performance but, even if they do, they are crippled by the OS.
      Apple was once down — very down — but they recovered. MS is at a low point right now but I think MS has something good cooking with this phone and their Surface computers.

      1. The ability to run the apps I use fullscreen on my 21.5″ iMac may not transfer down to my 5″ iphone, but I don’t NEED it to. My cell phone is NOT my primary ‘computer’ nor do I need/want it to be. Just because you can doesn’t mean you should.

  2. M$ is good at software. And crap at hardware.
    Even their software is crap but they managed to get it embedded in business.
    Their attempts to create another product line has been disastrous.
    Satya is smart in that he went back to their only successful business and put it in the cloud.

  3. Did he really totally forget what he said ten years ago?

    “Five hundred dollars, fully subsidised with a plan?” — that was the first thing he uttered about the iPhone:

    I’m sure he’d love nothing better than to re-write history, but since he can’t he’ll at least try to revise it.

    Not even the author of this article got it right. Original iPhone subsidy wasn’t any higher than any other cellphone of the time. Upfront price was (originally) $500, subsidy was around $250. It wasn’t until about a year later (when iPhone 3G arrived) that the subsidy amount got higher, and up-front amount got lower.

  4. wish I’d thought about the model of subsidizing phones through the operators. ..”
    Should say:
    wish I’d some body just shut me out once and for all because each time I open my mouth only crap came out of it”.

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