Microsoft CEO Claims iPhone Will Be Bust

Theaetetus writes "In an interview with USA Today, Microsoft CEO Steve Ballmer claimed there is no chance that the iPhone is going to get any significant market share. The article also deals with Microsoft's friction with the Justice Department, friction with Google, and the profitability of MSN. '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. 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.'"

Spoken Like a True Self-Deluded CEO

[eldavojohn]

I want to address the market share statement by citing Apple's PC Market share [appleinsider.com]:

According to research firm Gartner, worldwide PC shipments totaled 57 million units in the first quarter of 2006, representing a 13.1 percent increase over the same period last year. But in that time, Apple's share of the worldwide market slipped from 2.2 percent to a mere 2.0 percent, the firm's data shows.

Now, that's a pretty low figure. Yet, curiously enough, I know plenty of people who own a mac. But they only own one Mac that does everything and they aren't allowed to use them at work. So, I would posit that it's simply because enterprise businesses aren't used to Macs so they don't use them. That's a large part of the market share. Yet Apple is still very much in the ball game of the personal computer because of the loyalists and their avid love for Macs.

Not to mention that special "something" that Apple has and Microsoft clearly does not have [slashdot.org]. I don't claim to know what it is--I don't own a Mac--I'm bicurious about OSX and I don't know why ... is it the bash kernel? I'm also curious about the iPhone. Outrageously expensive but it has that special something to it that will intrigue the masses and we will be informed about it despite the fact that maybe only 2% of us actually purchased the device.

'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. 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.'

Translation:

It's obviously expensive, that's bad. They will make more money than us ... someway I don't understand. We have a mobile operating system and are fairly successful in pushing it into mobile devices. I'll leave out how much just our software raises the price of a mobile device ... because it's probably pretty significant $50-$100. We dropped the ball on music and we're currently dropping the ball on a billion phone sales by making them more expensive without providing the customer with the strange benefits I don't understand but Steve Jobs thinks is obvious. I'm sure Microsoft will come out ahead here. Oh, and I can't wait until my uncle squirts Tom Dooley by The Kingston Trio all over me. We're smart, we chose to target the old people who buy and return a single piece of fruit and are electronically hip and are retiring as opposed to the foolish spending youths of today--why do you think we colored it brown?!

The question left out of this interview was whether Ballmer has to lie to himself that he's working for the greatest company on earth every morning when he wakes up or if that lie persists full strength throughout the week.

If you underestimate your enemies--no matter how big or small--you're going to get burned.

Dang...

[Anonymous Coward]

Even Balmer's family isn't buying Zunes? I knew they weren't exactly a hit, but that's just sad.

Target market

[phasm42]

But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune.

What Ballmer is saying is that the Zune's target market is old people.

Subsidized by what?

[AKAImBatman]

There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item.

Excuse me, Mr. Balmer? Subsidized by who or what?

Maybe Balmer knows something I don't (always possible), but methinks that he needs to go back to CEO school* for lessons on how to pay attention to your competition. In specific, the reason why the iPhone is going to cost $500 is because it's not being subsidized by cell phone contracts. Jobs is trying to change the rules in that respect. Like Nintendo, Apple wants to make a profit off of every hardware unit sold. Any money that comes in through the surplus channels of additional content or features will simply be creme.

My 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune.

I can see how that went: "Here uncle, take this Zune player. It's FREE! That way I can tell everyone that my 85 year old uncle has a Zune, but doesn't want an iPod."

Uncle: "Have you lost your marbles, sonny-boy!?! What in tarnashun' does your old uncle here need with this Dune player?"

Balmer: "Zune..."

Uncle: "Don't interrupt me when I'm talking boy! You think you're so sh'mart with yer fancy electronics company!"

Balmer: "Technically soft-"

Uncle: "I said DON'T INTERRUPT ME!"

Blamer: "Um. Sorry."

Uncle: "That's better. Now get rid of this piece of junk. Did I ever tell you about the time I was flying over Iwo Jima and ended up in a blazing dogfight? I think it was 1942..."

Balmer: *sigh*

Two months later...

Blamer: "My 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune."

Reporter: "Oooooo..."

* I hear that he didn't finish his Dark Lord training with Jeff Skilling... :P

The iPhone?

[Theaetetus]

"No squirting. Less weight than a Zune. Lame."

Re:Target market

[Anonymous Coward]

What Ballmer is saying is that the Zune's target market is old people.

So it'll be huge in South Korea?

Re:Bad Ballmer Bellicosity

[eviloverlordx]

Well, usually he just throws chairs at them.

Re:Target market

[ebcdic]

What Ballmer is saying is that the Zune's target market is old people.

No, old people related to Microsoft executives.

Re:Target market

[MillionthMonkey]

No, what Ballmer said is that he's hoping he can get his own uncle to buy a Zune before he dies.

Think about that for a second.

iPod 2.0

[naden]

No wireless. Less space than a nomad. Lame.

The Zune: It's not your grandmother's music pla...

[Peter Trepan]

...oh, wait.

I wonder, will they come preloaded with Lawrence Welk?

Oh Microsoft... Always the Technology Visonary...

[Greyfox]

Quote from Microsoft:

1989: The GUI will never gain significant market share (And the end user will only ever need 640K of RAM!)
1994: The Internet is a passing fad and will never gain any significant market share!
1995: MS BOB Will be a huge market success!
1997: The DOJ will never convict us of being a monopoly!
1998: The end user doesn't care about security!
1999: What's this Linux thing you're talking about?
2001: What's this Apple thing you're talking about?
2002: iPod: Less storage than a Nomad and no wireless. Lame.
2006: iPod: Less storage than a Zune and no wireless. Lame.
2007: The iPhone will never gain significant market share!

It would seem that if you want to accurately predict popular technology trends all you have to do is listen to what Microsoft is saying and then predict exactly the opposite!

Somebody should send him an iPod

[ILikeRed]

I think Slashdot should start a fund to purchase a iPod for Ballmer's Uncle.

Huh? What? speak up Ballmer...

[Anonymous Coward]

I cant hear you over the sound of the zune sucking.

Re:Spoken Like a True Self-Deluded CEO

[Dharkfiber]

Has anyone smacked Ballmer yet? He really needs to wake up. And lets face it ... we all just want to smack pompous people.

Re:Why the media blitz recently

[rah1420]

He has a lot in common with Young Frankenstein's monster.

But does he have an enormous schwanstucker?

Not that I care personally, mind you.

Re:Good job Microsoft.

[morgan_greywolf]

Are you sure? I mean, it's not like people hate Ballmer enough to sign up for Cingular and put down $500 for iPhones just to spite him, is it?

Yes! *throws chair* I'm gonna f**king KILL Ballmer!

Re:Spoken Like a True Self-Deluded CEO

[dan828]

But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune.

Well, duh, he's family. In the Ballmer family, iPods are verboten. [typepad.com] And if you can't convince your elderly uncle to buy your personal music player or girl scout cookies or what have you, then you have no business being in business.

Christ, you'd think the cheap bastard would have bought his uncle one by now. It's not like he doesn't have a couple bucks stashed away. He'd probably even get an employee discount.

Re:Target market

[ianezz]

What Ballmer is saying is that the Zune's target market is old people.

He's probably planning to sell it to old people in Korea.

By email, of course.

Re:marketing genius

[soft_guy]

This must be why Microsoft has marketing brochures for the Zune that describe its benefits over wax cylinders.

Re:Spoken Like a True Self-Deluded CEO

[Anonymous Coward]

So grandaddy! I see you've decided to get an ipod instead of a Zune.

*Throws rocking chair across room*

I'll bury u.

Re:Comparing Apples To Lemons

[sokoban]

Also Ferarris roar when they drive. Mac computers are silent and pride themselves on user safety last I checked.

Actually my G5 tower spins up all the fans briefly upon startup, and it sounds kind of like a car revving its engine.

Re:Target market

[cciRRus]

Think about that for a second.

His uncle would rather die than to buy a Zune?

Re:Target market

[jkrise]

No, what Ballmer said is that he's hoping he can get his own uncle to buy a Zune before he dies.

Before who dies? Ballmer, or his uncle? I think Zune will die a lot earlier than that.

Re:Spoken Like a True Self-Deluded CEO

[cayenne8]

"During this time I had given my old macbook to my stay-at-home wife and mother of my three year old. The three year old threw it while the plug was in an horribly bent the chassis. But it still worked. My wife is nursing the baby and it turns out that human breasts can spray that milk quite a distance. My macbook had breast milk spattered all over it and in every crevice. It still worked! The three year old stuffed something into the DVD drive to prevent us getting the disk out. After we finally got the disk extracted, everything continued to work. The laptop is over five years old and has literally been around the work with me. It still works fine."

Interesting, but, I think you glazed over this whole breast and breast milk thing WAY too quickly.

Can you describe this in greater detail....any pictures by chance?

I think we need to take this into MUCH greater account when stress testing laptops, and hardware in general!!

\ Sure as hell is more interesting than watching 2 gorillas throw samsonite luggage all over a cage, the breast milk-laptop test would be one of the most often watched tv commercials in the world!!

At least, it would be the most tivo'ed commercial.... :-)

Re:Spoken Like a True Self-Deluded CEO

[rir]

I had owned that macbook for almost three years before I gave up on it

Can I go for a ride in your time machine too? (You do have one, right?)

Re:Spoken Like a True Self-Deluded CEO

[hobo sapiens]

I dunno, guys. First the Zune, now Vista...This is a man who knows a busted product when he sees one.

Excuse me while I go throw a chair.

Interesting way to sell the Zune.

[Anonymous Coward]

Buy the Zune. It's just like a gramophone, grandad. You can listen to all Vera Lynn .wma or Glen Miller .mp3 files.

OK. I know where I went wrong, I started too technical. MP3 ...imagine a gramaphone that can hold as much as a 100" album, but it looks and sounds like a 12" album. No, I know there are no such things as 100" albums...

(three hours later) ...and you can download lots of new music. What's that, grandad? Well, I wouldn't worry about not being able to understand the words, you can hardly hear now anyway. You know what? Forget it. Forget why I was even here, and... ...oh, you already forgot why I was here.

Re:Spoken Like a True Self-Deluded CEO

[Gilmoure]

Back when my wife was nursing, I woke up one night, being sprayed in the face. Wife was asleep on her back. Hydraulic pressure had made a fountain almost 4' high.

Re:Spoken Like a True Self-Deluded CEO

[node 3]

Believe it or not, Mac users, even the most fanatical among us, don't believe that no one likes Windows.

After all, some people like to be peed on, and, most of the time, using Windows isn't as bad as *that*, so it stands to reason. :-)

Re:Target market

[Yoooder]

If I were an Apple marketing Exec, every uncle of Ballmer's would have a free 80gb iPod in their mail today :P

Re:Somebody should send him an iPod

[Steve Ballmer's Uncl]

I'm Steve Ballmer's Uncle. I'll gladly accept your offer.

Selling to Gramps

[bladerunner009]

"But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune." There is sell and there is sell not, there is no 'hope'!.....And this is why you fail....

Re:Spoken Like a True Self-Deluded CEO

[@madeus]

Believe it or not, Mac users, even the most fanatical among us, don't believe that no one likes Windows.

Yeah, but it's that guy in the tweed suit, and who wants to hang around with him?! [1]

[1] That was supposed to be a joke, but I no-so-secretly believe it.[2] :)
[2] And yes, I'm a big fat nerd with man boobs sitting in an home study full of posters from the Science museum, with not one but two Darth Vaders models, surrounded by a multi processor Sparc system, a server running debian, two Macs (one G4 PPC, one Intel Laptop) and a Windows XP gaming system but in the presence of other nerds I'm positively dynamic :)