There’s no chance that the iPhone is going to get any significant market share. No chance. [emphasis mine] 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.
This is true for the iPhone for the same reason it is true for Mac OS X: in business phones, as in business computers, the user isn’t the decision maker, some bean counter is. Macs are only now making some small inroads in the enterprise. This didn’t happen before Macs gained some attributes a CFO would care about, such as lower maintenance costs because of the lack of malware.
But the iPhone does not seem to have such cost-of-ownership benefits. I do believe it is the better mousetrap, but I don’t see any way to paint it as the cheapest one.
Of course, there is nothing stopping Apple from developing a differently positioned device for the cost-conscious crowd (I just hope it won’t be called iPhone shuffle). It’s not like Microsoft is hoping for a — highly unlikely — 60-80% market share with a single phone model anyway; why should Apple?
If Microsoft is looking at the iPhone threat and only seeing a single device with a specific set of characteristics, they are making the same mistake they made with the iPod and Zune.
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