In Ballmer's defence...
The original iPhone was a joke.
Flagship WinMo devices had GPS, HSPA (over 3G data rates), a proper web browser, video calling, music and video, video-out, FM radio, a full Bluetooth stack, years of Apps (including things like Youtube), GPU accelerated graphics... and the amazing high tech that is copy/paste.
iPhone had sod all. They were pushing 'it plays music' as a revolutionary feature. From a technological point of view it was a joke. From a marketing point of view it was a goddamn masterpiece.