Microsoft CEO Takes On Apple's iPhone

In an interview with InformationWeek, the Microsoft CEO bemoaned the phone's $499 price tag, lack of a keyboard and the hype factor that comes solely because of its brand, while noting that many other vendors are doing similar things for less.

"I don't think this would be a very interesting announcement if anybody else had announced exactly the same product," Ballmer says. "If you didn't put the Apple name in that equation, I'm not sure how people would assess it."

Ballmer points out that the iPhone " or whatever it will ultimately be called, dependent on the outcome of Apple's battle with Cisco over the iPhone trademark " will start at five times as much as some phones on the market today that have similar features and functionality. "Today, you can buy phones for $100 that do e-mail, browsing, video, Office productivity " those are the Windows Mobile phones," he says. "There's a lot of innovation coming out of companies like Motorola, Samsung, HTC - a good partner of ours in China - [and] Palm at low price, high volume, good quality."

Ballmer also specifically pointed to the iPhone's lack of a keyboard as a potential drawback for heavy e-mailers. "If you want to send e-mail, touchscreens are okay," he says. "We have touchscreen-based devices, but I think keyboards are generally preferred for people who do much typing."

It's not all the typical competitive talk, however. Ballmer knows the iPhone may do well. "Apple does nice execution," he says. He also gives credit where it's due to the Symbian operating system running on Nokia devices. Nortel CEO Mike Zafirovski, who also took part in the interview, says that while he doesn't see the iPhone as being a significant enterprise player, "You have to give it to Apple for driving that level of excitement." Just don't expect either executive to ignore the possible threats Apple could represent.