Steve Ballmer finally explains why he thought the iPhone would be a flop
Microsoft’s former CEO Steve Ballmer had a glorious reaction to the announcement of the iPhone, a product that completely changed the mobile landscape. The interview where he lashes out against that expensive iPhone comes up time and again, proving that Microsoft failed to realize the potential of the mobile business.
Since then, Microsoft tried to no avail to morph its Windows Mobile business into something that could compete against the iPhone and Android. The company failed miserably. Ballmer left the company as a result, but it’s only now that he’s ready to explain that famous iPhone prediction.
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Here's that viral Ballmer iPhone video:
https://www.youtube.com/watch?v=eywi0h_Y5_U
In an interview with Bloomberg, the former CEO said he wishes he realized how Apple’s pricing structure for the iPhone would work: through carrier subsidies.
"I wish I'd thought about the model of subsidizing phones through the operators," he said. "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 cell phone bill."
Ballmer also said that it was a mistake not to make handsets and tablets sooner. "I would have moved into the hardware business faster and recognized that what we had in the PC, where there was a separation of chips, systems, and software, wasn't largely gonna reproduce itself in the mobile world," he said.
That might be so, but Microsoft’s hardware under Ballmer never really took off. Remember Zune? What about the Microsoft Kin phones? What about the Project Courier tablet that never came to be? What about the early days of the Surface, or the Lumia phones for that matter.
Ballmer’s demise can be blamed on the iPhone. Apparently, it’s his desire to make hardware that estranged him from Bill Gates, and ultimately he had to step down — the full Ballmer interview is available at this link.
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