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Former Microsoft CEO Steve Ballmer Admits He Was Wrong About the iPhone
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Sure, he may not have been totally wrong on that point. But it does make him extremely short sighted to think that apple will stick with the full price model forever, especially when subsidised plans have been around for years, if not in the US then elsewhere.
Changing the price is much easier than changing how the product works, which is where we come to the part where he said people wanted hardware keyboards , which was 100% wrong.
No probs, Mr. B--we knew you knew you were wrong when you said it. You were just choking due to a crap corporation being dumped down to a joke-level past-paradigm operation. And we thank you for giving us a decade of good laughs.
Forget about mistakes in making or not making own hardware. Hardware mistake can easily be remedied in the next iteration every year onward.
The problem with this guy was he practically took the entire Wins engineering team to the abyss and buried them. For 10 years since Vista, MS under this man's leadership blew chance after chance to make Windows viable because of their collective mindset. They are and still so paranoid about piracy of their OS. Piracy happens no matter what, if one consider 70% of future growth of the platform is forever going to be in China and India, where people simply cannot afford $99 for a mediocre OS.
Had they implement their own hardware with Windows and make Windows usable across desktop and their mobile devices, things would have truned out more positively. They could have sold vanilla Windows cheap for system builders but keep premium features free of charge on their own devices like everyone is doing now. Windows is still very prominent worldwide because of Office. The potential financial gain is still enormous. Yet now their OS is solely imprisoned on desktop only with no parole in sight.
For a company that once owned 92% of desktop in the world that now is losing battle of the mobile technolgy is sad. Writing a OS is no walk in park. Google with all their money has tried so for years but yet succeeded. They will keep trying because they own the mobile platform. But hey, they have decided to invest heavily in making their own gears now.
Ballmer, Balmer, Ballmer! Maybe you're just meant to be an owner of a sports team. Huh, the jury is out on your management of the Clippers.
As others have already pointed out many other phones before the iPhones were available with a contract and subsidy. However I do think it was Apple's intention to side step the carrier (and future carriers) at the time that they were not going to compromise the iPhone purchase and experience to the carriers. They wanted to wield the final say and power which was the right thing to do. This is what I am thankful to them for and why we can have a phone that can still get updates. I had windows phones (pocket pc) before the iPhone and even if here were updates the carriers never bothered to support them.
This is how they ultimately got all the carriers to come crawling to them one time or another. They did it initially to show people will line up and buy these phones no matter what.
This is how they ultimately got all the carriers to come crawling to them one time or another. They did it initially to show people will line up and buy these phones no matter what.
Apple did not innovate carrier subsidies - that went back years and years !
That innovation came from Scandinavia or UK when cellular went B2C and took off for non-business users.
The 1st iPhone was not actually a very good phone - it was 2G when many were 3G and did not have Apps or Apps store.
The camera was terrible too compared with Nokias of the time - 2007
But it was a great UX with a browser they displayed web pages correctly.
And had iTunes and was an iPod too !
Remember how hideous it was to brows on a Crackberry ?
The innovation was the huge screen and usability - look at a Nokia 6310 . . . amazing !
Then later came Apps and App Store - and the rest is history . . .
Steve and Bill never had much success on phones . . . nor music players . . .
That innovation came from Scandinavia or UK when cellular went B2C and took off for non-business users.
The 1st iPhone was not actually a very good phone - it was 2G when many were 3G and did not have Apps or Apps store.
The camera was terrible too compared with Nokias of the time - 2007
But it was a great UX with a browser they displayed web pages correctly.
And had iTunes and was an iPod too !
Remember how hideous it was to brows on a Crackberry ?
The innovation was the huge screen and usability - look at a Nokia 6310 . . . amazing !
Then later came Apps and App Store - and the rest is history . . .
Steve and Bill never had much success on phones . . . nor music players . . .
One thing most of us agree on... We're glad Ballmer is no longer at Microsoft.
Ballmer was always full of ****. His era of leadership saw Microsoft lose out big to other tech companies. Ballmer was a key leader in the decisions that lead to Microsoft having to restructure everything they do because they fell so behind in areas that MS never had good enough competition before.
Microsoft is a better company today because of the massive failures lead by Ballmer and his teams. Not everything he lead was bad, but just look at the company during his leadership compared to before and after.
I hated seeing Ballmer introduce products and talk about products. His style is like a pushy used cars salesman who seems to know nothing about the car he's selling you.
Ballmer was always full of ****. His era of leadership saw Microsoft lose out big to other tech companies. Ballmer was a key leader in the decisions that lead to Microsoft having to restructure everything they do because they fell so behind in areas that MS never had good enough competition before.
Microsoft is a better company today because of the massive failures lead by Ballmer and his teams. Not everything he lead was bad, but just look at the company during his leadership compared to before and after.
I hated seeing Ballmer introduce products and talk about products. His style is like a pushy used cars salesman who seems to know nothing about the car he's selling you.
I think most people are glad he's gone from Microsoft.
And yeah, I knew he was wrong from day 1 when he laughed off the iPhone. So his admission he wasn't quite right about it, today, is definitely "too little, too late".
But I will say, I wasn't aware that the push for Surface devices really began with him (and was such a contentious thing inside the company). As is often the case with Microsoft products, the first attempts were pretty poor. But he was right about the need for the company to get into the hardware business, to actually build machines that took full advantage of what their operating system was capable of doing.
I think as the PC hardware market turned into a commodity (no more exciting than selling people new microwave ovens or stoves, really) -- it became tough for Microsoft to show off their OS as anything special anymore. Lots of copies of Windows end up on budget priced machines with poor performance, etc.
And yeah, I knew he was wrong from day 1 when he laughed off the iPhone. So his admission he wasn't quite right about it, today, is definitely "too little, too late".
But I will say, I wasn't aware that the push for Surface devices really began with him (and was such a contentious thing inside the company). As is often the case with Microsoft products, the first attempts were pretty poor. But he was right about the need for the company to get into the hardware business, to actually build machines that took full advantage of what their operating system was capable of doing.
I think as the PC hardware market turned into a commodity (no more exciting than selling people new microwave ovens or stoves, really) -- it became tough for Microsoft to show off their OS as anything special anymore. Lots of copies of Windows end up on budget priced machines with poor performance, etc.
This is a weird defense for two reasons.
One, phones absolutely were subsidized prior to the iPhone. Nearly all of them were, in fact. They didn't explicitly tell you this, they just said "Sign up for a two year contract and get a free phone!", but it was a subsidy nonetheless. Most people pre-iPhone, I would wager, actually had absolutely no idea what their phone really cost them, because they never saw anything but the subsidized cost. If anything, because the subsidies were hidden, people who didn't upgrade often were probably paying way more than $500 for their phones over the life of the device.
The other place he's wrong is about the price point. It's true that a lot of people won't buy a $700 phone outright, but it's been demonstrated by actual high-end phone buyers that some fraction most definitely will, and the fact that carriers no longer have "invisible" subsidies that you don't know what fraction of your bill is your phone subsidy and it continues after you've technically paid it off makes it even more clear people are willing to.
When T-Mobile says "We will give you a $600 no-interest 24-month loan on your phone," I usually take it, because there's no downside in not doing so. But I'm quite clear I'm paying $750 for my phone, even if a lot of that is spread out, and I would still pay it if there was no zero-interest loan. So at best, an iPhone buyer today is getting a zero-interest-loan as "subsidy", but they can see clearly exactly what the real cost is.
"Joe/Jane Nokia Candybar" wouldn't or couldn't pay $600 for a phone. But Apple's 104% profit in the industry illustrates pretty clearly that at least from a viable ecosystem and profit model, you don't need those buyers to be successful.
Balmer also glosses over the fact that people ended up willing to pay the higher price because that $600 phone replaced (for them) their several-hundred-dollar computer, and probably also the compact camera they'd have dropped a couple hundred bucks on.
The sad thing is that when he made that statement a crappy Windows smartphone was around the same price.
Of course, that would actually require Tim Cook to a) think that and b) say that. Chances are you are not going to get your wish but keep on posting the hate, it goes over well here on MRs.
Apple did not invent subsidised phones. I had not paid full prise on any on my phones. Never in the last 18 years.
The point is subsidies played a very very small role in the iPhone's success. You and Ballmer seem to not get that.
The iPhone was revolutionary, but that's a tough pill to swallow for Ballmer even after defeat.
That's the difference between Nadella and Ballmer. Nadella knows MS made a huge mistake in the smartphone space and has decided to move on. Things are finally turning around for MS.
I get it fine. Even Jobs got it.
iPhone sales were stalling. Both Apple and AT&T had to do something.
Remember, AT&T had a huge investment in the iPhone as well.
They came up with a subsidy model that worked for both parties benefit.
Even in 2007/2008, a $200 subsidy was still high. So the iPhone still had the status symbol of being a high end phone due the higher up front cost to the consumer ($200).
Technically speaking, the first iPhone was a crappy phone with only 2G connectivity, garbage camera, and no MMS.
Subsidies played a huge role in expanding the iPhone's user base.
"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 going to reproduce itself in the mobile world."
Wrong again. Separating hardware (Samsung, HTC, etc.) and software (Google) had produced essentially the same dominance (~90% market share by device) of a fragmented system over an integrated system (Apple).
Wrong again. Separating hardware (Samsung, HTC, etc.) and software (Google) had produced essentially the same dominance (~90% market share by device) of a fragmented system over an integrated system (Apple).
Only Ballmer seemed to care about the keyboard....and no physical keyboard...
Personally I was glad it didn't have one.
I still have my first gen iPhone. I paid full retail for it to.
It sits in it's original box next to my 3G, 3GS, and 4. Skipped the 4S and 5 to play with Android.
Read my whole reply to yours and the other post. A loan is an outright purchase. ATV does not pay for their phones from Apple monthly, so the phone is paid for and credit extended to the customer. At the time the iPhone was introduced, phone subsidies were already common practice in the industry. Apple did not invent that, they merely adopted it for their sales model. Prior to the iPhone, I never paid more than the sales tax to upgrade my cell phone. I paid $600 for my phone in 2007, by putting it on my credit card, and then paid the bill monthly. There's no difference between that and letting ATT bill you monthly and including it in the bill. The same is true today -- customers are presented with the total cost of the phone, just as they were in 2007, whether they chose to buy it over time or not -- they still know they are eventually spending $750, just like they did in 2007. Nobody is required to pony up the entire cost of the phone in cash, not then, not now.
Balmer is revising history, since what he says he said didn't make any sense then, and it doesn't make any sense now.
I'm getting older, so maybe my memory is failing me. But, I don't recall the early iPhones being subsidized. I also don't remember subsidized phones being a new thing Apple brought to the cell phone market. Weren't you always able to get phones at greatly reduced prices and be locked into some length contract?
I wouldn't say extortionate. The carriers are extending credit to you so you have to pay a premium on the airtime in order for them to make a profit. Having said that, if you have the money paying upfront is better as you don't have to deal with a locked phone, which some carriers take an age to unlock.
Article Link: Former Microsoft CEO Steve Ballmer Admits He Was Wrong About the iPhone[/QUOTE]
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Mr Ballmer's long reign at Microsoft was a *huge* asset to Apple and it was a hammer-blow to Cupertino's competitiveness when he quit. Apple should have set up a team to figure out how to get Mr Ballmer to stay on. Satya Nadella taking the helm at MS is a wakeup call for Mr Cook. The Surface Pro eating away at the iPad is just the beginning. (Even if Bart Simpson took over from Mr Ballmer it would have spelled big trouble for Apple but Nadella is a nuclear strike on Cupertino.)
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Mr Ballmer's long reign at Microsoft was a *huge* asset to Apple and it was a hammer-blow to Cupertino's competitiveness when he quit. Apple should have set up a team to figure out how to get Mr Ballmer to stay on. Satya Nadella taking the helm at MS is a wakeup call for Mr Cook. The Surface Pro eating away at the iPad is just the beginning. (Even if Bart Simpson took over from Mr Ballmer it would have spelled big trouble for Apple but Nadella is a nuclear strike on Cupertino.)
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