The iPhone will be an expensive failure. That's the view of Microsoft CEO Steve Ballmer, who has once again laid into Apple's mobile phone-iPod hybrid venture.

He also again reiterated his statements last week that Microsoft will not be releasing a Zune phone. Ballmer said that the iPhone is doomed and will only obtain a very small market share.

"Would I trade 96 per cent of the market for 4 per cent of the market? [Laughter] I want to have products that appeal to everybody," said Ballmer about the iPhone in an interview with USA Today .

"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidised item. 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 per cent or 70 per cent or 80 per cent of them, than I would to have 2 per cent or 3 per cent, which is what Apple might get."

Outspoken rivalry

Of course, Ballmer is conveniently forgetting that Apple CEO Steve Jobs has always said that the company is not aiming for a large market share. Apple plans to sell just 10 million iPhones in the first year - just one percent of 1 billion phones sold across the world every year.

"In the case of music, Apple got out early. They were the first to really recognise that you couldn't just think about the device and all the pieces separately. Bravo. Credit that to Steve and Apple. They did a nice job," Ballmer went on.

"But it's not like we're at the end of the line of innovation that's going to come in the way people listen to music, watch videos, etc. I'll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we'll get him to own a Zune."

Ballmer finished off his interview by once again claiming that a Microsoft Zune phone is not at all on the cards. The company is instead concentrating on developing the Windows Mobile platform.

"It's not a concept you'll ever get from us. We're in the Windows Mobile business. We wouldn't define our phone experience just by music. A phone is really a general purpose device.

"You want to make telephone calls, you want to get and receive messages, text, e-mail, whatever your preference is. The phone really is kind of a general purpose device that we need to have clean and easy to use," he said.

Ballmer's statements should of course be taken with a few bucketfuls of salt. He's bound to say these things about the iPhone and this should in no way be considered the honest opinion of someone with inside knowledge.

While he makes some good points, Microsoft is Apple's biggest rival. And it should be remembered that many people thought the iPod would flop. And we all know what happened to that.