{"id":1693,"date":"2011-01-11T16:55:14","date_gmt":"2011-01-11T07:55:14","guid":{"rendered":"https:\/\/regex.info\/blog\/2011-01-11\/1693"},"modified":"2011-01-11T16:55:38","modified_gmt":"2011-01-11T07:55:38","slug":"balmers-theres-no-chance-that-the-iphone-is-going-to-get-any-significant-market-share-no-chance-quote","status":"publish","type":"post","link":"https:\/\/regex.info\/blog\/2011-01-11\/1693","title":{"rendered":"Balmer&#8217;s \u201cThere&#8217;s no chance that the iPhone is going to get any significant market share. No chance.\u201d Quote"},"content":{"rendered":"\n\n\n<div class='resize_warning' id='arw1693'>\n<b>NOTE<\/b>: Images with an <img class='raw' width='19' height='18' src='\/i\/s\/red_zoomup.gif'\/> icon next to them have been artificially shrunk to better fit your screen; click the icon to restore them, in place, to their regular size.\n<\/div>\n\n\n<div class='ic'><a href='http:\/\/www.google.com\/finance?chdnp=1&amp;chfdeh=0&amp;chdet=1294705124710&amp;chddm=492660&amp;cmpto=NASDAQ:MSFT;NASDAQ:AAPL&amp;cmptdms=0;0&amp;q=msft%20aapl&amp;ntsp=0'><img loading=\"lazy\" decoding=\"async\" src=\"\/i\/msft-aapl-iphone-stock-graph.gif\" width=\"561\" height=\"245\"\nid=\"imsft_aapl_iphone_stock_graph\"\/><\/a>\n<br\/>Apple <i>vs.<\/i> Microsoft since Balmer's Bold Statement\n<br\/><span class='subtle-less'>graph via Google Finance<\/span>\n<\/div>\n\n<p>An <a\nhref='http:\/\/seekingalpha.com\/article\/245828-apple-the-big-winner-in-the-verizon-iphone-pre-launch?source=yahoo'>article<\/a>\n<span class='nobr'>I read<\/span> today included the author's speculation that:<\/p>\n\n<blockquote>\n&#8220;<i>the Verizon iPhone is expected to add <span class='nobr'>a few<\/span> more billion dollars to Apple's bottom line<\/i>&#8221;\n<\/blockquote>\n\n<p>&#8220;A few more billion dollars&#8221; would be big money to me, but it's probably\nnot all that big <span class='nobr'>a deal<\/span> to <span class='nobr'>a company<\/span> the size of Apple (the 2nd largest\ncompany in America). Still, it brought to mind something Microsoft CEO\nSteve Balmer said in April 2007, <span class='nobr'>a couple<\/span> of months before the iPhone was\nreleased. In <a\nhref='http:\/\/www.usatoday.com\/money\/companies\/management\/2007-04-29-ballmer-ceo-forum-usat_N.htm'>an\ninterview with <i>USA Today<\/i><\/a>, Mr. Balmer said:<\/p>\n\n<table style='padding: 0 10em 0 2em'><tr valign='baseline'><td style='font-family:times;font-size:200%'>&#8220;<\/td>\n\n<td><i>There's no chance that the iPhone is going to get any significant\nmarket share. <span style='color:white; font-weight:bold'>No chance.<\/span>\nIt's a $500 subsidized item. They may make <span class='nobr'>a lot<\/span> of money. <span class='nobr'>But if you<\/span>\nactually take <span class='nobr'>a look<\/span> at the 1.3 billion phones that get sold, <span class='nobr'>I'd prefer<\/span> to\nhave our software in 60% or 70% or 80% of them, than <span class='nobr'>I would<\/span> to have 2% or\n3%, which is what Apple might get.<\/i><\/td><\/tr>\n\n<tr><td colspan='2' align='right'>&mdash;Microsoft CEO Steve Balmer<\/td><\/tr><\/table>\n\n<p>This bit of hubris is pretty funny, especially with the luxury of hindsight, but most of what he says is actually correct. Let's look....<\/p>\n\n<ul><li><p>\n\n     &#8220;<b><i>They may make <span class='nobr'>a lot<\/span> of money<\/i><\/b>&#8221; &mdash; Check. Apple can't rake it in fast enough. It's <a href='http:\/\/www.strategyanalytics.com\/default.aspx?mod=reportabstractviewer&amp;a0=5868'>#1 in smartphone revenue<\/a>. Stock is at an all time high.\n\n     <\/p><\/li><li><p>\n\n     &#8220;<b><i>... the 1.3 billion phones that get sold...<\/i><\/b>&#8221; &mdash; Right on track. <a href='http:\/\/www.businesswire.com\/news\/home\/20101028007439\/en\/Strategy-Analytics-Apple-Jumps-Top-5-Global'>According to\n          Strategy Analytics<\/a>, 327 million phones were sold in Q3 last year, making for 1.3 billion per year. (<span class='nobr'>A quarter<\/span> of those, by the way, <a href='http:\/\/www.strategyanalytics.com\/default.aspx?mod=reportabstractviewer&amp;a0=5831'>are &#8220;smartphones&#8221;<\/a>, which is the only kind of phone Apple has.)\n\n\n     <\/p><\/li><li><p>\n\n     &#8220;<b><i>I'd prefer to have our software in 60% or 70% or 80% of them<\/i><\/b>&#8221; &mdash; Sure, of course, no one could doubt Balmer's wishful thinking; who wouldn't want that kind of market penetration?\n\n     <\/p><\/li><li><p>\n\n     &#8220;<b><i>... 2% or 3%, which is what Apple might get<\/i><\/b>&#8221;  &mdash; Not <i>too<\/i> far off, relatively speaking. According to the same <a href='http:\/\/www.businesswire.com\/news\/home\/20101028007439\/en\/Strategy-Analytics-Apple-Jumps-Top-5-Global'>report<\/a> as the previous bullet, Apple's Q3 sales last year accounted for 4.3% of global handset (all phones, &#8220;smart&#8221; and simple) sales.\n\n\n     <\/p><\/li>\n\n<\/ul>\n\n<p>But of course, it turns out that Microsoft didn't get anywhere close to\n&#8220;60% or 70% or 80%&#8221; penetration in the global handset market, or any other\nphone market, and so Balmer's hubris comes back to haunt him.<\/p>\n\n<p>Even in the (much smaller, but higher-margin) &#8220;smartphone&#8221; market that\nthe iPhone completely redefined, Apple is already <a\nhref='http:\/\/www.tuaw.com\/2010\/10\/22\/iphone-passes-blackberry-in-worldwide-market-share\/'>the\nworldwide market leader<\/a>. <span class='nobr'>In the US<\/span> smartphone market, Microsoft, who <a\nhref='http:\/\/www.macobserver.com\/tmo\/article\/the_truth_about_apples_iphone_market_share\/'>was\npassed by Apple<\/a> in the fall of 2009, now doesn't even get mentioned in\n<a\nhref='http:\/\/www.ibtimes.com\/articles\/99188\/20110110\/apple-iphone-google-android-market-share-microsoft-palm.htm#'>this\narticle yesterday<\/a> about US smartphone market share: Android and Apple\nare about equal at about 25% of the market each, behind RIM (makers of the\nBlackBerry) at 34%.<\/p>\n\n<p>In the global handeset market that Balmer was talking about in the first\nplace, Microsoft seems to not even rate <span class='nobr'>a footnote.<\/span><\/p>\n\n<p>Hubris is fine if it buys you something, such as <span class='nobr'>a politician<\/span> spouting\nconfidence despite trailing in the polls in order to &#8220;rally the troops&#8221;,\nbut it seems pretty stupid for Balmer to have been so proactively publicly\nconfident in this case. <span class='nobr'>The downside<\/span> to being wrong (being made to look\nlike <span class='nobr'>a total<\/span> doofus in his capacity as head of Microsoft) seemed pretty\nsteep compared to the possible upside.<\/p>\n\n<p>Anyway, <span class='nobr'>I think<\/span> the Balmer quote is funny and I've been looking for an\nexcuse to highlight it, so this Verizon iPhone thing (which makes no\ndifference to me in Japan, of course) seems <span class='nobr'>a good<\/span> enough time as any.\nSince that quote, Microsoft's stock has dropped <span class='nobr'>a bit,<\/span> but Apple's has\nalmost tripled. <span class='nobr'>Can you guess<\/span> which <span class='nobr'>I have<\/span> at the moment? \ud83d\ude42<\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>An article I read today included the author's speculation that:<\/p> \"the Verizon iPhone is expected to add a few more billion dollars to Apple's bottom line\" <p>\"A few more billion dollars\" would be big money to me, but it's probably not all that big a deal to a company the size of Apple (the 2nd largest company in America). Still, it brought to mind something Microsoft CEO Steve Balmer said in April 2007, a couple of months before the iPhone was released. In an interview with USA Today, Mr. Balmer said:<\/p> \" There's no chance that the iPhone is going [...]","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/posts\/1693"}],"collection":[{"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/comments?post=1693"}],"version-history":[{"count":0,"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/posts\/1693\/revisions"}],"wp:attachment":[{"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/media?parent=1693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/categories?post=1693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/regex.info\/blog\/wp-json\/wp\/v2\/tags?post=1693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}