Today is the fifth anniversary of the iPhone. It’s been an incredible five years for Apple, and nothing illustrates how incredible it’s been better than this 2007 exchange between Microsoft CEO Steve Ballmer and David Lieberman of USA Today:
Q: People get passionate when Apple comes out with something new — the iPhone; of course, the iPod. Is that something that you’d want them to feel about Microsoft?
A: It’s sort of a funny question. Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody.
Now we’ll get a chance to go through this 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.
In the case of music, Apple got out early. They were the first to really recognise that you couldn’t just think about the device and all the pieces separately. Bravo. Credit that to Steve (Jobs) and Apple. They did a nice job.
But it’s not like we’re at the end of the line of innovation that’s going to come in the way people listen to music, watch videos, etc. I’ll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we’ll get him to own a Zune.
Ballmer’s uncle probably didn’t get a Zune. Almost no one did. And the iPhone has taken much more than 2% to 3% of the market.
As you can see, five years ago Microsoft was the most valuable tech company in the world and its CEO was sneering at Apple.
Today, Apple is the most valuable company in the world. Microsoft is building its own hardware, just like Apple.
(Via NY1, which mentioned this USA Today interview this morning.)
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