Steve Ballmer praises Apple for creation of iPhone App Store
Microsoft chief Steve Ballmer recently had positive words about Apple's success with the iPhone and its App Store, adding fuel to rumors of a potential alignment between Apple and Microsoft to bring Bing search to the iPhone.
Context & Ripple Effects
Ballmer's praise is the latest step in a two-year public recalibration toward Apple: he had already softened his line on Apple's success back in September 2008 and conceded months later that Microsoft was building its own App Store-style distribution. What makes this round different is the business angle behind it — Business Week reported in January 2010 that Apple and Microsoft had discussed giving Bing top billing on the iPhone, and Chitika framed such a deal as Microsoft's ultimate mobile coup.
The comments land while the iPhone's king-maker status over U.S. carriers is itself confirmed reporting, so any default-placement conversation with Apple carries real distribution weight. The Bing alignment remains unconfirmed rumor — fueled by Ballmer's tone, not by any announced deal.
First-order effects
- If the rumored Bing placement were struck, Microsoft would buy its way onto the fastest-growing smartphone platform without shipping a device, directly offsetting its weak position in handsets.
- Apple would gain negotiating leverage over Google, whose search currently rides along on the iPhone, by holding an alternative default open.
Second-order effects
- Google would face pressure to sweeten its own revenue-share terms for iPhone search placement, turning Apple into an auctioneer between two search rivals.
- Microsoft's own App Store-like distribution effort would be partially redundant if its software reaches iPhones via search defaults rather than a storefront — the two strategies compete for the same goal of relevance off-Windows.
Third-order effects
- Mobile platforms are shifting from closed rivalry to paid interdependence: search defaults become tradable assets that even fierce competitors will negotiate over, with the platform owner (Apple) collecting rent from both sides.
- If handset makers can auction their default slots, carrier influence over what ships on flagship phones erodes further, accelerating the move of power up the stack to OS owners.
The trend: Smartphone competition is entering a phase where rivals monetize each other's platforms through negotiated defaults, making search placement a bargaining chip rather than a fixed allegiance.