Many have called ex-Microsoft CEO Steve Ballmer a “loudmouth” for making predictions that didn’t come true, which is far from the truth. He wasn’t the only one to predict Apple’s failure with the iPhone: Oracle co-founder Larry Ellison followed suit, saying that if he didn’t “personally” take charge of Apple, it would go under.
However, Ballmer went much further: He thought Apple co-founder Steve Jobs was making a big mistake and would go bankrupt. In an interview with the BBC, Tony Fadell, an early member of the iPhone development team and founder of Nest, recalled Ballmer’s harsh qualification: “Not a very good email device.” The reason? It had no buttons. It was an exciting toy for business customers but not for the average Joe. $500 was too much.
But today, it’s the most valuable smartphone brand on the planet—and the one with the highest sales. Ironically, Microsoft ousted Ballmer because of his slow response to the iPhone’s success. Not betting on Android took the company entirely out of this fight. Not even the purchase of Nokia or the heyday of the magnificent Lumia has managed to saved Microsoft from ostracism.
Ballmer Was Wrong: Apple Already Has 15 iPhones and 35 Other Additional Models
New century, new rules. In 2000, Microsoft co-founder Bill Gates stepped down as CEO to focus more on technology and his philanthropic foundation. He had been thinking about it for some time. In the aftermath, Ballmer, who had been Gates’ close friend since their Harvard days and had worked at Microsoft since 1980, took over as CEO.
But the role came with a high price. The historical context of this change is interesting. In 1998, a year many at the company considered eternal, Microsoft faced several challenges, including accusations of monopolistic practices by the U.S. government. Gates, under pressure, decided the time was right to hand over the reins to Ballmer, who had strong management and business experience.
However, during the Ballmer era, Microsoft experienced several difficulties, some of which tarnished the company’s public image. Yes, there were successes, such as the growth of the server and tools division, but also notable failures, like Windows Vista and the Zune player.
Worst of all, Ballmer missed the “smartphone and tablet revolution,” allowing competitors like Apple and Google to gain the upper hand. When Jobs unveiled the first iPhone in 2007, the then-Microsoft CEO laughed aloud.
Why did Ballmer laugh at the iPhone? The price, mainly, but also because of the lack of buttons. Jobs, on the other hand, was so confident in the idea he almost appeared to be psychic: “People will get used to it.” And he was right.
Ballmer Remains a Great Negotiator
When Apple found out about Ballmer’s mockery, it also cracked a joke and made fun of him. Notably, before Microsoft’s current CEO Satya Nadella admitted it a decade later, Microsoft co-founder and former CEO Gates believed that the “biggest mistake [Microsoft] ever made” was losing its position to Google’s Android.
Then came Windows Mobile, but it was neither intuitive nor functional. Years later, Ballmer commented, “I regret that period in the early 2000s when we were so focused on what we had to do with Windows Vista that we were unable to redeploy talent to the new device called cell phone.” Even today, Microsoft is continues to struggle with products, often aiming to improve a product only to end up imitating a competidor. Case in point: pitting the Surface against the iPad.
But Ballmer was smart. He already had a $100 billion fortune when he stepped down. Since 2014, he’s been buying more and more Microsoft stock. By 2021, Ballmer was the ninth-richest person in the world. Today, he has a net worth of nearly $160 billion and is the sixth richest man in the world.
How did he get there? By being a bold negotiator. As a “business manager,” Ballmer asked to receive he would receive 10% of the profit growth he generated plus an annual salary of $50,000. That was his ticket to the world stage. In short, he may not have good intuition when it comes to products, but he’s a brilliant negotiator.
Imagen | Flickr (Long Zheng, Dan Farber)
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