After pooh-poohing the iPhone years ago, Steve Ballmer just praised Apple

When Apple launched the iPhone in 2007, one of the biggest and loudest skeptics was Steve Ballmer, who was CEO of Microsoft at the time.

During an interview with Bloomberg's Emily Chang this week, Ballmer almost (but not quite) walked back his dismissive comments about the iPhone. Then he actually praised Apple (emphasis ours).

"I wish I had thought of the model of subsidizing phones through the operators. People like to point to this quote where I said the iPhones will never sell. Well the price of $600 or $700 was too high and it was business model innovation by Apple to get it essentially built into the monthly cell phone bill."

He got the price a little wrong, it was $400-$500 back then, but he was right that this was still a lot of money for phones on a two-year contract at the time. But because they replaced your iPod and gave you a phone with email, people still lined up to buy them.

If you remember, the iPhone was also exclusively available only through AT&T in its early years. In 2011, the iPhone became available on Verizon and other carriers followed and with that, carriers began to subsidize a bigger percentage of the cost of the phone up front.

Just for kicks. This is what Ballmer actually said back in 2007:

He told David Lieberman of USA Today:

There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.

At a press conference that same year announcing a partnership with Nortel when asked about the iPhone, Ballmer also laughed and said:

500 dollars? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesn't appeal to business customers because it doesn't have a keyboard. Which makes it not a very good email machine. ... Right now, we're selling millions and millions and millions of phones a year. Apple is selling zero phones a year. In six months, they'll have the most expensive phone by far ever in the marketplace.

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