‘There’s no chance that the iPhone is going to get any significant market share. No chance.’ That was the verdict of Microsoft CEO Steve Ballmer, talking to USA Today’s David Lieberman in the CEO Forum at the University of Washington Business School.

While Apple may turn a profit on the highly-anticipated device, Ballmer indicated that he believed its sales would be conservative. ‘It’s a $500 subsidized item,’ he said. ‘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. However, he was more forgiving when talking about Apple’s domination of the market for digital music downloads. Crediting Jobs with spotting a trend before it fully developed, he acknowledged that Apple ‘did a nice job’.

He then positioned the Zune in a very different market to the iPod. ‘I’ll bet our ads will be less edgy,’ he said. ‘But my 85-year-old uncle probably will never own an iPod, and I hope we’ll get him to own a Zune.’

Source: MacUser