Ballmer: The Apple iPhone isn't going to get any significant market share

This is one of those statements that just may come back to haunt - if he indeed can haunted - Microsoft CEO Steve Ballmer. In a wide-ranging interview with USA Today, the big man, when asked about Apple's passions and its iPhone said: "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% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get. In the case of music, Apple got out early. They were the first to really recognize that you couldn't just think about the device and all the pieces separately. Bravo. Credit that to Steve (Jobs) and Apple. They did a nice job."


He continued:

"But it's not like we're at the end of the line of innovation that's going to come in the way people listen to music, watch videos, etc. I'll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune." This isn't the first time Balmer has taken a swipe at the iPhone. And who knows, he may be right but statements like that usually end up in the classics stupid predictions bin. Ballmer has been on a roll of late. Last month he criticized rival Google, saying it is devoted primarily to ad-supported search while Microsoft has reinvented itself many times over. Ballmer said a truly entrepreneurial company invents something, builds a business around it and then starts the cycle again. But Google hasn't yet emerged beyond ad-supported search, he said. "They're really just one business, a search and advertising business," he said, although he gave Google credit for reaching the $10 billion revenue mark quicker than did Microsoft. However, Microsoft began selling desktop software, particularly its Windows operating system, then created software to run servers, moved into the Internet arena with its Internet Explorer Web browser and MSN Search, and more recently, moved into consumer electronics with its Xbox video gaming system. Last Fall Ballmer stirred up a hornets nest when he played the patent infringement card against Linux and again set off a round of negative speculation and vendor clarifications. On the patent claim, Ballmer was citing a controversial 2004 survey by Open Source Risk Management (OSRM), a firm that sells risk insurance, that said technology within the Linux kernel potentially infringes on some 283 patents, 27 of which were held by Microsoft. Ballmer's comments came after Microsoft and Novell signed a business and technology partnership that included an agreement not to assert patent and intellectual property rights. Ballmer said the deal with Novell would protect users of SUSE Linux, but he went on to say that Microsoft wanted to "get the appropriate economic return for our shareholders from our innovation," suggesting that users and vendors of other versions of Linux could be at risk of patent infringement lawsuits.

Copyright © 2007 IDG Communications, Inc.

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