Steve Ballmer views the iPhone as the main competitor -- or perhaps inspiration -- to Windows Phone, but thinks Android is a threat on price only.

Interviewer John Battelle asked several times if Microsoft might try to build tablets and phones to compete more directly against Apple.

"We have been very very successful enabling hardware innovation, and we will continue to do so. Thank you for your suggestion."

He pointed to the company's deep partnership with Nokia, who will be showing "a bunch of new devices running Windows Phone" next week.

So why should users buy a Nokia Windows PHone instead of an iPhone?

Basically, it's an interface decision. "The notion of putting your own information front and center....it's not seas of icons and blah blah blah....There's certainly some nice things Apple's done with Siri, but we've been doing the same things for years."

What about Android?

"You don't need to be a computer scientist to use a Windows Phone. I think you do to use an Android phone....The cheapest phones on the market this season will probably be Android phones, we have to do more work....Apple's a good competitor, a different kind of competitor."