When Apple launched the iPhone in 2007, Steve Ballmer, who was Microsoft’s CEO at the time, was one of the biggest and loudest skeptics of the device.
In an interview with Bloomberg, the former CEO said he wishes he realized how Apple’s pricing structure for the iPhone would work (through carrier subsidies). He said:
“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 a business model innovation by Apple to get it essentially built into the monthly cell phone bill.”
Ballmer also said that it was a mistake for Microsoft not to get into the smartphone and tablet business sooner.
“I would have moved into the hardware business faster and recognized that what we had in the PC, where there was a separation of chips, systems, and software, wasn’t largely gonna reproduce itself in the mobile world.”
Microsoft’s hardware business never really took off under Ballmer and that is mostly because of the company’s late entry into the mobile space. You can watch the full interview with Ballmer from this link.