updated 08:45 am EDT, Fri September 25, 2009
Ballmer on Apple's role in phone field
Microsoft chief Steve Ballmer said in an interview late Thursday that Apple is unlikely to ever control the smartphone market the way it does portable media players. The executive argued that the sheer scale of the phone market, which could amount to almost 1.3 billion devices this year, made it impossible for any one hardware company to take control. Apple's lead in media players was possible only because it participated in a niche, he added, and the company has usually never had more than a niche position in larger markets.
"I’ll call anything that’s under about 50 million a year niche," Ballmer told TechCrunch. "And I’ll call anything that’s north of 300 million a year non-niche. PCs are not niche devices... Phones are not niche. The categories where, I think, a single player can control a large percentage of the volume are the smaller categories. What does Apple sell every year of iPods: 30 million, order of magnitude, something like that... But when you get these categories that are 300 million, 500 million, a billion, a billion-five a year, the truth of the matter is you’re gonna want multiple points of manufacture, with a lot of innovation around it whether it's [the] supply chain, for geographic diversity... when 1.3 billion phones a year are all smart, the software that’s gonna be most popular in those phones is gonna be software that’s sold by somebody who don’t make their own phone."
He used the explanation to dismiss rumors that Microsoft will offer its own phones, although this has been contradicted by mutliple leaks of handsets made by Sharp that would have Microsoft branding.
Microsoft has so far had little success with its existing strategy. Windows Mobile's practical market share so far hasn't increased and has been facing pressure from Google's competing Android platform. The company has seen its strongest hardware partner, HTC, turn more of its attention to Android and may switch more than half of its lineup to the competing platform next year. Palm has also recently confirmed it has no more plans to produce Windows Mobile phones, and i-mate has shut down at least temporarily following financial troubles.
Apple has just a small fraction of the total cellphone market but is the third-place smartphone maker just behind RIM, which also has its own closed hardware and software platform. Nokia has the largest market share of the group and is using the device-independent Symbian platform, but its share has been declining in recent quarters.