I was a bit surprised to open my PaidContent.org newsletter this morning and find that Steve Ballmer was taking direct aim at Apple in pointed comments at the McGraw Hill Summit yesterday.
Ballmer went straight for the jugular calling Apple too expensive for today's economy, perhaps because Apple's computer sales are truly softening and he senses they are vulnerable. The comments were part of a Q&A with BusinessWeek Editor-in-Chief Steve Adler.
He said what?!
Ballmer began with a volley directly at Apple's bow when said pointedly "No one's going to pay $500 more for a logo." PaidContent reports the audience literally gasped when he said it. That's because it's petty and you don't expect well-trained CEOs to make such statements in a public forum with the press around, but he's not totally off base here. Mac sales have been diving over the last several months.
But he wasn't finished of course. He then said Windows Mobile 6.5 pricing will be a big differentiator between Windows Mobile phones and those from his rivals (Apple being one of course). It's hard to say if it will or not. The cell phone market is fickle and shifts constantly (just ask Motorola), but right now as much Ballmer doesn't want to hear it, the iPhone and RIM's various Blackberry offerings are providing some pretty stiff competition.
Data plans versus phones
Ballmer wasn't done yet though. Next he went after the iPhone directly saying "[The] iPhone is a very expensive phone without a keyboard. Some people can't afford [the device] and they can't afford the data plan. It costs about $500 to make.” Yet how many of us ever pay full price for any cell phone? We typically get a big discount in exchange for that 2 year contract we sign with AT&T, Sprint, T-Mobile or Verizon.
He's right that some people can't afford the phone or data plan, but millions have opted in and I've found data plans are fairly comparable. If you're buying a smart phone, you can expect to pay around $30 a month for the data plan (as I wrote in iPhone, G1 or Storm: Which One is Right for You?).
He continued, "“Unless you assume that BlackBerry and iPhone will dominate the smartphone market—which I don't— that gives us a huge opportunity..." Excuse me, Steve, but Dude, they already dominate the Smart Phone Market.
Same old Ballmer
Ballmer probably isn't stupid as he seems sometimes. He knows that bloggers like me are going to pick up and run with what he said and there's no such thing as bad publicity right? But calling out Apple in such a direct way is forcing people to make comparisons between Microsoft and Apple and I really don't think Microsoft wants to go there.
One final note: I went to the Apple Store in NYC on Saturday and the place was mobbed. People may be be holding off on Mac computer purchases right now, but if my experience is any indication, they want one. Oh yes, they want one.