The iPhone made its public debut in 2007, when Apple Inc AAPL co-founder Steve Jobs presented the revolutionary device to the world. Before it became a huge success for Apple and one of the top-selling phones worldwide, many — including one big rival — were skeptical about how well the iPhone would sell.
What Happened: The iPhone made its debut during Jobs' MacWorld keynote address on Jan. 9, 2007. The phone would go on sale later that year and become one of the biggest revenue drivers for Apple and a huge part of the company’s later success.
During the keynote, Jobs said that “every once in a while, a revolutionary product comes along that changes everything.” The Apple CEO at the time said that the iPhone combined three products: a mobile phone, a widescreen iPod and internet communications.
“iPhone is a revolutionary and magical product that is literally five years ahead of any mobile phone. We are all born with the ultimate pointing device — our fingers — and iPhone uses them to create the most revolutionary user interface since the mouse.”
One of the many people who had a huge reaction to the iPhone unveiling was Steve Ballmer, who was then the CEO of rival Microsoft Corporation MSFT.
During an interview with CNBC, Ballmer was asked for his reaction to the iPhone unveiling.
“Five hundred dollars! Fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business guys because it doesn’t have a keyboard,” Ballmer famously said.
Ballmer said the iPhone could end up selling well but told CNBC that he liked Microsoft’s chances in the smartphone market.
“We have our strategy. I like our strategy. I like it a lot,” he said.
Ballmer went on to say that Microsoft was selling “millions and millions and millions of phones a year” and Apple was selling zero at the time, adding that it was premature to call the iPhone a success.
“Six months, they’ll have the most expensive phone by far even in the marketplace, and ... let’s see how the competition does.”
Microsoft would later exit the smartphone business in 2016.
While Ballmer was not the only competitor to poke fun at the iPhone, his comments remain among the most famous made about a rival over the years.
In a later interview, Ballmer admitted he was wrong and went so far as to say that he wished he had thought of some ideas himself.
“I wish I had thought of the model of subsidizing phones thorough the operators,” Ballmer said.
Related Link: 5 Game-Changing iPhone Hacks YouTuber MrWhoseTheBoss Recommended In This Viral Video
Investing $1,000 In Apple Stock: The unveiling of the iPhone was a major event — and Ballmer's comments may have led some investors to be skeptical of the company's product due to its price. Others, however, may have recognized that Apple was onto something.
An investor could have bought 303.95 shares of Apple on Jan 17, 2007, the day of Ballmer’s original interview, based on a split adjusted price of $3.29.
That $1,000 investment would be worth $50,157.83 today, based on a price of $165.02 for Apple shares at the time of writing. This represents a return of 4,9515.7% over the last 16 years.
An investor who believed more strongly in Microsoft's future, however, would have made less today. A $1,000 investment in Microsoft stock on the day of Ballmer's interview would be worth $9,090.03 today, gaining 809% over the last 16 years.
Although Apple has beaten Microsoft over the last 16 years by a significant margin in terms of stock returns, both stocks have significantly outpaced the S&P 500, as tracked by the S&P 500 ETF Trust.
An investor who purchased $1,000 in SPY stock when Ballmer made the comments would have $2,873.03 today, a gain of 187.3%.
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
