Another insightful piece from Jeffrey Mincey on where Microsoft’s then CEO Steve Ballmer missed the boat but tries to rewrite history.
I wish I’d thought about the model of subsidizing phones through the operators. You know, people like to point to this quote where I said iPhones will never sell, because the price at $600 or $700 was too high. And there was business model innovation by Apple to get it essentially built into the monthly cellphone bill.
Mincey says ‘Poppycock:’
The so-called subsidy market was there already. Apple merely made it more commonplace, dropped the iPhone’s price to become more competitive, and stopped taking a share of the subsidized price from AT&T to make the subsidized price more attractive. iPhone sales skyrocketed within a few years.
What was Microsoft doing?
The difference between Ballmer’s excuses and reality are distinct. Microsoft’s Windows product sucked relative to the iPhone and future iPhones. Microsoft’s pricing model was devastated when the iPhone-like Android OS was given to cellphone makers for free. The $7-billion purchase of Nokia was just another expense in a long line of attempts to diversify Microsoft which ended in abysmal failure.
Mincey voices another worry that involves Apple and implies a similar fate under CEO Tim Cook.