The iPhone & Steve Ballmer: It’s Time For Him To Eat Some Serious Crow

There are very few people in the tech world who annoy me quite like Steve Ballmer, CEO of Microsoft. It’s not just that he’s loud, dismissive and arrogant. It’s that he manages to be all these things while usually being spectacularly wrong, especially when it comes to Apple. Take for example his thoughts on the iPhone from a USAToday article in 2007:

“There’s no chance that the iPhone is going to get any significant market share. No chance,” said Ballmer. “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.”

As you might imagine, I experienced a moment of pure schadenfreude last week when Canalysis senior analyst Pete Cunningham announced that not only did the iPhone have 13.7% of the global smartphone market, but that it had surpassed Windows Mobile devices which had slipped to only 9%. Even worse for Microsoft is the fact that in the last 2 years, Apple has sold more iPhones than all the Windows Mobile devices from all its vendors combined.

I can only imagine that somewhere in Redmond, behind a very heavy door…Steve Ballmer is throwing a good old-fashioned hissy fit, cursing Apple, sweating profusely and gnawing on the furniture.

Difference between Microsoft and Apple culture

The fact is that Microsoft has never truly understood Apple and that confusion has grown in part out of their unparalleled success with Windows. With Windows, Microsoft found a superior product in the Macintosh OS, produced a cheaper knock-off and then created a large ecosystem of partners for wide distribution and support. The result was global domination. Unfortunately, cheaper and more plentiful doesn’t automatically win in every situation. As computers sink into every facet of daily life and the costs of consumer technology continue to drop, more and more value is being placed on finding products which are easier, more capable or simple more enjoyable to use.

Microsoft was unable to stop the runaway success of the iPod and it’s looking more and more unlikely that they’ll be able to contain the growth of the iPhone either. Why? Because they cannot fathom a formula for success that isn’t a function of feature set divided by price. It’s how they think and it’s also how they ultimately view the products they compete against. No wonder Ballmer spends so much time shouting at the rain. From his perspective, anyone who willingly pays more for the same features is a brainwashed idiot. What he doesn’t understand is that the experience of a product is more than the sum of its component parts. It’s how the device works, how it feels and even more elusively, how it makes you feel. Can you think of a Microsoft product that is truly a joy to use? I don’t mean one that works well, because many of their products work well enough. I mean one that is a joy to use. Neither can I. That’s because Microsoft isn’t in the joy business. They’re in the “nearly as good for less” business and that isn’t an appeal to the heart. It’s an appeal to the wallet.

So Mr. Ballmer, here’s some friendly advice. The next time you feel yourself ready to mouth off about how Apple is doomed to fail because it doesn’t understand the realities of the marketplace, take a moment and think about Windows Vista and the fact that roughly 50% of Apple Store customers are new to the Mac. Think about sales figures for the Zune as compared to the iPod. Think about the millions of people ditching their Windows Mobile devices for an iPhone. Think about the $35 Billion that a zero-debt Apple has sitting in the bank and all the money it continues to make made through this harsh economic downturn. Then if you’re still confident that you’re the smart one and Apple is the delusional one, then by all means have your say.

Just understand that with your miserable track record in predicting Apple’s future, there’s an excellent chance that you’ll end up eating your own words. Better make sure they’re palatable.