Microsoft Exec Not Impressed With iPhone Sales - InformationWeek

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10/24/2008
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Microsoft Exec Not Impressed With iPhone Sales

Robbie Bach, Microsoft's head of entertainment and devices, said Apple will have trouble maintaining the iPhone's sales momentum.

Apple and AT&T had successful third quarters thanks to the popularity of the iPhone, but a Microsoft executive argues that those figures may be overhyped.

Robbie Bach, head of Microsoft's entertainment and devices division, told BusinessWeek that Apple undoubtedly had a good quarter by shipping 6.9 million iPhones, but that momentum is probably not sustainable.

"Apple had a big launch of a new product, and they launched at scale in a lot of new countries with a lot of new operators," Bach told BusinessWeek. "This quarter, RIM is having its big launch, and at some point we'll have our big launch. We'll have to see where things normalize."

During a conference call regarding Apple's third-quarter earnings, CEO Steve Jobs repeatedly boasted how Apple sold more phones than Research In Motion. But that may not happen during the next quarter because RIM soon will launch the highly anticipated BlackBerry Bold and touch-screen BlackBerry Storm.

Bach also suggested Apple may run into a market-share ceiling, particularly in the United States, where the wireless provider wants to keep a broad portfolio of devices for many types of users.

"Does AT&T like having iPhone on its network? Sure. But they want to have balance in that ecosystem, where there's three or four big partners," said Bach. "That's why we're so attractive to them -- because we work with Samsung, Sony Ericsson, LG, HTC, Motorola. Don't get me wrong, the iPhone is a cool device. But it's not about choice."

It may be tough for Apple to replicate the success of the third quarter, and the company still has a small percentage of the entire cell phone market. But Apple has already surpassed its goal of selling 10 million iPhones within the calendar year, and Jobs said the iPhone generated $4.6 billion in revenue in the third quarter. That figure makes Apple the third-largest cell phone manufacturer by revenue, a significant feat considering the company entered the field about 15 months ago.

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