iPhone's Not So Hot -- Try Windows Phones, Ballmer Says

"The real market momentum with operators and the real market momentum with device manufacturers seems to primarily be with Windows Mobile and Android." That's Microsoft CEO Steve Ballmer's alternate reality take on the smartphone market, expressed to analysts during a midyear update in New York. While he acknowledged that Apple's iPhone has "consumer market mojo," he suggested that it does not have the same market potential as the mobile platforms controlled by Microsoft and Google.

Ballmer has a history of iPhone putdowns (see "The iPhone Naysayers"). Judging by his latest appraisal of the smartphone market, he still has trouble accepting the success of Apple's phone. Data from a Gartner report from the third quarter of 2008 showed RIM's BlackBerry models and Apple's iPhones in a distant second and third behind Nokia, whose 42% market share of phones largely run the Symbian OS. Gartner's data indicated that Windows Mobile shipped four million units in the quarter, compared to 4.7 million iPhones.

But Microsoft isn't all talk. The company has announced plans to open Microsoft stores to counter Apple's retail success, and is also designing a new UI for Windows Mobile 6.5. However, momentum will be slowed by the fact that the retail stores and new mobile OS are still being developed -- Windows Mobile 6.5 won't be available until the second half of the year, and it's not certain when the first Microsoft stores will open.