Ballmer: iPhone has 'no chance'

"Would I trade 96% of the market for 4% of the market? I want to have products that appeal to everybody," he said. "We'll get a chance to go through this [Apple versus Microsoft debate] again in phones and music players. 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."

He also suggested that Apple might be creating too narrow a focus by stressing media playback on the iPhone instead of the possibilities of a general operating system such as Windows Mobile. The heavily-rumored Zune phone was again dismissed as impossible and against the company's mobile product philosophy.

"We wouldn't define our phone experience just by music. A phone is really a general purpose device," he summarized. "You want to make telephone calls, you want to get and receive messages, text, e-mail, whatever your preference is."

The iPod's success in the world of strictly entertainment-oriented handhelds was downplayed. Apple "got out early" with a good mix of media player hardware and software, according to Ballmer, but there was still an opportunity for the Zune line to have its own success. Its sales campaign would be "less edgy" and appeal to more buyers, he said. The remark appeared to ignore the company's existing campaigns, which have included Adult Swim and graffiti-themed limited runs of the player.

Microsoft currently holds a small but substantial portion of the cellphone OS business, which is currently dominated by variants on the open-source Symbian. The Zune's share has largely remained locked at roughly 9 percent of the US hard disk-based media player market since its introduction in November 2006.