Portrait of Steve Ballmer
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Steve Ballmer on iPhone

Initial skeptic (strong)

TL;DR

Steve Ballmer initially ridiculed the iPhone's high price and lack of a keyboard, viewing it as a non-business device.

Key Points

  • He openly laughed at the first iPhone upon its 2007 unveiling, citing the $500 subsidized price as too expensive.

  • His primary criticism was that the initial iPhone lacked a keyboard, making it unsuitable for his view of a primary business email machine.

  • In retirement, Steve Ballmer stated that not getting Microsoft into the hardware business sooner, especially for phones, was one of his biggest mistakes.

Summary

When Steve Ballmer first encountered the iPhone following its January 2007 unveiling, his public reaction was characterized by dismissive laughter, as he focused on its initial high price point of $500 subsidized with a plan and its lack of a physical keyboard, which he considered essential for business email. He contrasted this with Microsoft's then-successful strategy of selling millions of phones a year, viewing the iPhone as a costly device that would not appeal to enterprise customers. He publicly stated, "let's see how the competition goes," suggesting skepticism about its long-term viability against established mobile platforms.

In later reflections, Ballmer acknowledged that his mockery stemmed from an underestimation of Apple’s strategy, particularly its ability to secure carrier subsidies that lowered the initial cost for consumers, and he later cited a failure to pivot into the hardware business sooner as a major mistake in his tenure. While his initial stance was rooted in an enterprise-first mindset that prioritized features like physical keyboards for email, he eventually conceded that the revolutionary user experience offered by the iPhone's multi-touch screen was something he failed to appreciate at the time. This initial dismissal is often contrasted with the immediate strategic pivot that other tech companies undertook following the device’s debut.

Key Quotes

We should have been in the hardware business sooner.

Frequently Asked Questions

Steve Ballmer's initial reaction to the 2007 debut of the iPhone was to laugh openly at the device. He publicly focused on the high subsidized price and the absence of a physical keyboard, which he believed business users required for email.

Yes, his stance has evolved, particularly in retrospect. Ballmer later explained his mockery by citing the phone's high initial cost before carrier deals, but he also admitted his biggest regret was not pushing Microsoft into the hardware business sooner.

He repeatedly emphasized the lack of a physical keyboard as a critical flaw that would prevent it from appealing to business customers. He saw it primarily as a non-enterprise device that was too expensive, ignoring its emerging appeal to consumers.