Steve Ballmer was right narrowly and wrong strategically. The original 2007 iPhone was expensive, lacked a physical keyboard, used slower EDGE data, launched with one U.S. carrier and was a weak fit for some enterprise-email users. But Ballmer treated those launch constraints as evidence that Apple could not gain significant market share. He missed that the iPhone was redefining the smartphone as an integrated consumer-computing platform.
What Ballmer actually predicted in 2007
Ballmer made two related sets of comments that are often compressed into one story. After the January 9, 2007 announcement, he criticized the price and the absence of a physical keyboard, arguing that Windows Mobile devices were cheaper and more practical for business use. In an April 30 interview, he said there was “no chance” the iPhone would gain significant market share, pointing to its roughly $500 price, touchscreen keyboard and Apple’s small position in the much larger phone market. Contemporary reports are available from Ars Technica, MacRumors and Ars Technica’s April coverage.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
|
Apple iPhone 14, 128GB, Midnight - Unlocked (Renewed) | $300.00 | Buy on Amazon |
| 2 |
|
Apple iPhone 16, 128GB, Pink - Unlocked (Renewed) | $574.99 | Buy on Amazon |
| 3 |
|
Apple iPhone 15, 128GB, Black - Unlocked (Renewed) | $405.00 | Buy on Amazon |
| 4 |
|
Apple iPhone 13, 128GB, Midnight - Unlocked (Renewed) | $262.00 | Buy on Amazon |
| 5 |
|
Apple iPhone 16e, 128GB, Black - Unlocked (Renewed) | $389.00 | Buy on Amazon |
That wording matters. Ballmer did not predict that nobody would buy an iPhone. He predicted that Apple would not achieve significant share. Whether that sounds reasonable depends on the denominator: all mobile phones, smartphones, premium smartphones or enterprise devices.
Why the criticism made sense at the time
In 2007, BlackBerry had made fast mobile email and tactile typing central to the business-phone category. Windows Mobile reached customers through multiple hardware manufacturers, reinforcing Microsoft’s belief that licensing software broadly would beat selling a narrow range of integrated devices. Carrier subsidies also meant that comparing a $499 or $599 handset with every competing phone’s upfront price was not perfectly like-for-like.
Quick wins for a faster PC:
Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →#1 Best Overall
- This phone is unlocked and compatible with any carrier of choice on GSM and CDMA networks (e.g. AT&T, T-Mobile, Sprint, Verizon, US Cellular, Cricket, Metro, Tracfone, Mint Mobile, etc.).
- Please check with your carrier to verify compatibility.
- The device does not come with headphones or a SIM card. It does include a generic (Mfi certified) charging cable.
- Tested for battery health and guaranteed to have a minimum battery capacity of 80%.
Apple’s own launch announcement confirms the first iPhone’s specifications and positioning: it cost $499 for 4GB or $599 for 8GB, was initially exclusive to Cingular in the United States, used EDGE and Wi‑Fi, and replaced fixed keys with a software QWERTY keyboard. Apple presented it as a phone, widescreen iPod and internet communications device, not as a conventional enterprise handset (Apple’s January 9, 2007 announcement).
What Ballmer got right about the original iPhone
It was expensive for a new entrant
The launch prices were high for a company with no established phone business. The value proposition also depended on a carrier contract and subsidy structure, so “$500 phone” was an incomplete comparison, but the price was a genuine adoption barrier. Apple changed that calculation quickly: in September 2007 it cut the 8GB model from $599 to $399 and said it was on track to sell its one-millionth iPhone before the end of the month (Apple’s September 2007 announcement).
The keyboard trade-off was real
A software keyboard offered a flexible full-screen interface, but it removed the tactile feedback that heavy BlackBerry typists valued. For long email sessions and rapid text entry, Ballmer’s objection was reasonable. The mistake was treating that preference as the definition of smartphone value rather than one use case among several.
Rank #2
- 6.1" Super Retina XDR OLED, HDR10, Dolby Vision, 1000nits (typ), 2000nits (HBM), 2556x1179px at 460ppi, 3561mAh Battery
- 128GB 8GB RAM, Apple A18 (3nm), Hexa-core (2x4.04 GHz + 4x2.20 GHz), Apple GPU 5-core, 16‑core Neural Engine
- Rear camera: 48MP, f/1.6, wide + 12MP, f/2.2, ultrawide, Front Camera: 12MP, f/1.9, wide, iOS 18, upgradable to iOS 18.5
- 4G LTE: 1/2/3/4/5/7/8/12/13/14/17/18/19/20/25/26/28/29/30/32/34/38/39/40/41/42/48/53/66/71, 5G: n1/2/3/5/7/8/12/14/20/25/26/28/29/30/38/40/41/48/53/66/70/71/75/76/77/78/79 - Dual eSIM
- Unlocked for freedom to choose your carrier. Compatible with both GSM & CDMA networks. The phone is unlocked to work with all GSM Carriers & CDMA Carriers Including AT&T, T-Mobile, Verizon, Sprint., Etc.
Its network and distribution were constrained
EDGE was slower than the 3G networks that later became standard. U.S. buyers initially had only Cingular, and the product lacked the mature enterprise-management capabilities associated with BlackBerry and Windows Mobile. The first iPhone also launched before the App Store model that would later make third-party software central to iOS.
Where Ballmer’s forecast failed
He judged a platform by its launch specification
The June 2007 handset was a starting configuration, not a fixed category. Apple could lower prices, add faster networks, expand carriers and build software distribution around the device. Ballmer’s public argument largely extrapolated from the first model’s limitations instead of modeling how the product and its ecosystem could evolve.
He used the wrong customer as the reference point
Ballmer evaluated the iPhone through the business-phone lens: email speed, physical keys, IT control and compatibility with existing corporate workflows. Apple widened the market definition to include web browsing, music and video, maps, photography, visual voicemail and touch-first interaction. Consumers—not only corporate IT departments—became the decisive buyers.
Rank #3
- 6.1inch Super Retina XDR display. Aluminum with color-infused glass back. Ring/Silent switch
- Dynamic Island. A magical way to interact with iPhone. A16 Bionic chip with 5-core GPU
- Advanced dual-camera system. 48MP Main | Ultra Wide. Super-high-resolution photos (24MP and 48MP). Next-generation portraits with Focus and Depth Control. 4X optical zoom range
- Emergency SOS via satellite. Crash Detection. Roadside Assistance via satellite
- Up to 26 hours video playback. USB C, Supports USB 2. Face ID
He underestimated integration and ecosystem effects
Microsoft’s licensing model offered breadth across many manufacturers. Apple controlled the hardware, operating system, interface, carrier relationship and later the application platform. That integration helped Apple coordinate design, updates, developer tools and product positioning. The relevant comparison was not one Apple handset versus thousands of phones; it was one coordinated platform versus a fragmented collection of hardware and software implementations.
Ballmer later acknowledged that Apple’s tightly coupled hardware-and-software approach was easier to execute in some respects while defending Microsoft’s separated model in a 2009 Churchill Club speech (Microsoft transcript).
The product judgment and the market judgment are different
| Claim | Verdict | Why |
|---|---|---|
| The first iPhone was expensive | Right | $499 for 4GB and $599 for 8GB at launch, before the September price cut. |
| No physical keyboard hurt some business users | Right, narrowly | BlackBerry-style tactile typing remained valuable for heavy email users. |
| The first iPhone was not ideal for enterprise email | Largely right | It lacked the established enterprise features and workflows of incumbent business phones. |
| Apple would not gain significant smartphone importance | Wrong | The category shifted toward touch interfaces, mobile web use and software ecosystems. |
| Microsoft’s broad licensing model would beat Apple’s integration in smartphones | Wrong in smartphones | OEM breadth did not deliver comparable coordination, identity or ecosystem momentum. |
| Apple would remain a niche premium player | Wrong | Apple expanded the product family, distribution and platform around the original device. |
How Microsoft’s response exposed the strategic mistake
Microsoft continued to emphasize software reach, but mobile required tighter coordination among the operating system, hardware makers, carriers and developers. In 2011, Microsoft formed an alliance in which Nokia adopted Windows Phone as its primary smartphone platform (Microsoft’s 2011 annual report). In 2013, Microsoft announced the purchase of Nokia’s Devices and Services business as part of a devices-and-services strategy (2013 shareholder letter).
Rank #4
- This pre-owned product is not Apple certified, but has been professionally inspected, tested and cleaned by Amazon-qualified suppliers.
- There will be no visible cosmetic imperfections when held at an arm’s length.
- This product is eligible for a replacement or refund within 90 days of receipt if you are not satisfied.
- Product may come in generic Box.
The hardware push did not produce a durable rival ecosystem. Microsoft’s 2016 annual report recorded Lumia sales falling from 36.8 million in fiscal 2015 to 13.8 million in fiscal 2016, while phone revenue fell 56% and the company reduced phone-related expenses (Microsoft’s 2016 annual report). Those figures do not mean Ballmer’s 2007 comments caused the failure, but they show that Microsoft eventually pursued deeper device integration and still lacked the timing and ecosystem momentum to catch up.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Important qualifications to the usual story
“Significant market share” is not a precise metric
If Ballmer meant a majority of every mobile phone sold worldwide, his claim was less absurd. If he meant that Apple would fail to become a major and durable smartphone platform, it was clearly wrong.
The iPhone did not invent smartphones
Smartphones and touchscreen devices existed before 2007. Apple’s more defensible achievement was resetting the category’s dominant design and business expectations. Android also helped spread touchscreen smartphones across many price points; the transformation was not Apple’s work alone.
The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Best Value
- 6.1" Super Retina XDR OLED, HDR10, 800 nits (HBM), 1200 nits (peak), 2532x1170px at 460ppi, 4005mAh Battery
- 8GB RAM, Apple A18 6-core CPU (2 performance + 4 efficiency cores), Apple GPU 4-core, 16‑core Neural Engine
- Rear camera: 48MP, f/1.6, wide, Front Camera: 12MP, f/1.9, wide, iOS 18.3.1, upgradable to iOS 18.5
- Connectivity: Global 4G LTE, Sub-6 GHz 5G, LTE, Wi-Fi 6, Bluetooth 5.3, NFC, USB-C, Wireless Charging (7.5W). (does not have mmWave 5G or MagSafe or physical SIM card) - Dual eSIM Only
- Unlocked for freedom to choose your carrier. Compatible with both GSM & CDMA networks. The phone is unlocked to work with all GSM Carriers & CDMA Carriers Including AT&T, T-Mobile, Verizon, Straight Talk., Etc.
Microsoft did not become a generally unsuccessful company
Microsoft’s licensing model remained powerful in PCs and enterprise software, and the company continued to grow important businesses outside phones. The failure was specific to translating that model into a rapidly changing consumer platform market.
Arrogance was not the whole explanation
Ballmer’s framework was plausible in a world where scale meant licensing one operating system to many vendors. The deeper error was organizational: Microsoft optimized for the strengths of its existing model while Apple optimized for a new integrated experience. Later reporting quotes Ballmer acknowledging that Microsoft should have moved into hardware faster; that is a retrospective comment, not a contemporaneous admission that every 2007 criticism was false (MacRumors’ 2016 report).
The precise verdict
Ballmer correctly identified several short-term weaknesses of the original iPhone: price, keyboard ergonomics, limited cellular data, restricted distribution and weaker enterprise fit. He was wrong to convert those observations into a long-term market forecast. Apple was not merely selling an expensive phone; it was creating a consumer platform whose value would grow through better hardware, software, distribution and applications.
The durable lesson is not that every skeptical product critique is foolish. It is that a forecast must separate the launch product from the platform trajectory, define the market and customer carefully, and account for ecosystem effects. Ballmer noticed flaws that were genuinely there. He failed because he assumed those flaws mattered more than the new behavior Apple was creating around them.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
