Ballmer was not wrong about the iPhone. He said they would get 2-3% of the total phone market , not the smartphone market. He even makes that clear in the part that Gruber quoted: "... 1.3 billion phones ...". That's phones, not smartphones. According to http://www.zdnet.com/blog/btl/apple-iphone-smartphone-market... in the first quarter of 2010 Apple had 16.1% of smartphones and smartphones were 18.8% of mobile phon…
Windows phones are smartphones. That is the market share that ballmer was talking about.
> 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 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get.
He was exactly right about Apple's position but there's no obvious way Microsoft will be able gain mass adoption. Google will.