In an interview with InformationWeek today, the Microsoft CEO bemoaned the phone's $499 price tag, lack of a keyboard and the hype factor that comes solely because of its brand, while noting that many other vendors are doing similar things for less.

"I don't think this would be a very interesting announcement if anybody else had announced exactly the same product," Ballmer says. "If you didn't put the Apple name in that equation, I'm not sure how people would assess it."

Ballmer points out that the iPhone " or whatever it will ultimately be called, dependent on the outcome of Apple's battle with Cisco over the iPhone trademark " will start at five times as much as some phones on the market today that have similar features and functionality. "Today, you can buy phones for $100 that do e-mail, browsing, video, Office productivity " those are the Windows Mobile phones," he says. "There's a lot of innovation coming out of companies like Motorola, Samsung, HTC - a good partner of ours in China - [and] Palm at low price, high volume, good quality."