Microsoft to challenge iPhone on price
updated 12:20 pm EDT, Thu March 19, 2009
MS on Win Mobile and Yahoo
Microsoft chief Steve Ballmer in an interview Thursday revealed the company's current approach to competing with rivals, particularly Apple. The executive noted he believes that Apple may have difficulties as smartphones gain market share as the iPhone is relatively expensive to make. Where Ballmer estimated that an iPhone costs about $500 before factoring in carrier subsidies, he saw the "sweet spot" as being phones that have a pure cost between $150 and $200, which are more likely to include Windows Mobile.
Touchscreens are considered important by Ballmer, though he downplayed the iPhone's emphasis on its premium capacitive screen as a possible liability versus the cheaper, resistive screens that are required on Windows Mobile handsets with touch input.
"We want to provide vendors with ability to make Windows phones up and down the price scale," he said. "The way they do [touch] on the iPhone is not an inexpensive component. We’ll do it in a way that you can afford to do it on most phones."
The early Microsoft employee also clarified the role of his firm's upcoming retail stores and said they will be more of a "showcase" for Microsoft's products rather than a direct source for a large portion of its product sales, which will still go to third-party retailers. "Apple actually sells about half of all Apple machines through its stores or online," he said. "We’re not going to do that for PCs."
Ballmer also reiterated that his company is still open to doing a search deal with Yahoo and said that he's had only one opportunity to talk to new Yahoo chief Carol Bartz since she took her position in January. If any deal is to take place, a conversation will happen "when she's ready" rather than under pressure from either company.
Weird
03/19, 12:42pm reply
Ballmer either has his facts badly wrong or MacNN does. On another page here the 'pure cost' of making an iPhone is quoted as $174 - that sits smack bang in the middle of MS' supposed sweet spot.
rytc
Mac Enthusiast
Joined: Jan 2001
Price only
03/19, 12:55pm reply
Microsoft can only compete on price. They lack the vision and skill to do anything else. Why is it that after 20 years Windows is still a bloated derivative POS.
Monopoly power and leverage alone does not make good products.
JeffHarris
Fresh-Faced Recruit
Joined: Oct 1999
Ballmer
03/19, 12:56pm reply
Ballmer is a douche bag. Nothing but drivel ever comes out of his mouth. At least Bill Gates wasn't a complete nut case!
G4_Kessel
Fresh-Faced Recruit
Joined: Jan 2003
Cheap
03/19, 12:56pm reply
So what they're saying is Windows mobile is cheap c***... funny as a sales person I think the same thing. Problem is anyone who wants a cheaper smart phone will get a BlackBerry Pearl.
Salty
Professional Poster
Joined: Jul 2005
oh ballmer
03/19, 01:07pm reply
When is this guy going to learn to keep his mouth shut and let his product speak for iteself.
appleuzr
Fresh-Faced Recruit
Joined: Aug 2006
blather
03/19, 01:09pm reply
more talk from Ballmer designed to keep investors hopeful. He's been wrong with nearly every statement so far when it comes to the iPhone. I'm tempted to say he doesn't get it, but I think he doesn't really believe what he's saying.
eddd
Fresh-Faced Recruit
Joined: Dec 2001
Re: Weird
03/19, 01:11pm (1 reply) reply
Ballmer either has his facts badly wrong or MacNN does. On another page here the 'pure cost' of making an iPhone is quoted as $174 - that sits smack bang in the middle of MS' supposed sweet spot.
Not weird. The price your quoting is the theoretical take-apart price. But as many people will tell you, there's a lot of extra costs that go into the device. Research and Development, overhead, profit.
Look at the other article where it describes the plan-less iPhone at $600 or more.
testudo
Fresh-Faced Recruit
Joined: Aug 2001
What do you expect?
03/19, 01:16pm reply
Balmer is, well ... Balmer.
I don't think Microsoft is really benefiting with him in his position.
What is this price point, as before things were subsidized, I bought one retail for less than $500 and the price over time should actually come down. Obviously not fact based.
As far as the screen, the higher quality screen is appreciated. I'm not sure what screen HTC uses, but a friend is anti-apple (I know, I know, he's still a friend) and his wife had an iPhone so he knew how the screen 'felt' but when he bought an HTC, he took it back after the first morning of using it becuase it seemed he really had to push on the screen to make things work.
Generally, you do get quality with Apple products and I for one will shell out a bit more for this, just not THAT much!
trevc
Fresh-Faced Recruit
Joined: Mar 2000
Haha Ballmer
03/19, 01:24pm reply
This is the guy that said the iPhone wouldn't sell. Kind of invalidates his opinions on iPhone pricing/sales/target market for me.
PBG4 User
Senior User
Joined: Feb 2001
Less for less
03/19, 01:30pm reply
He knows very well that people just see features in terms of 'touch' - not whether it's actually well implemented or not - having an AppStore rather than the actual applications.
He's also talking manufacturer price to the carrier / retailer, not the build price. Of course Apple have some high margins they can reduce here if they need to, but that's never been their strategy.
Where I think he's wrong is that they have a solution that can scale to both ends of the market.
JulesLt
Fresh-Faced Recruit
Joined: Jul 2005