Ballmer doesn't see Google Android as a competitor yet

Google's Android mobile platform doesn't "bubble up to the top" of Microsoft's list of toughest competitors to Windows Mobile in the market for smartphone OSes, Microsoft CEO Steve Ballmer said Thursday.

Speaking at an investor day hosted by Australian telecommunications carrier Telstra, Ballmer said that it's too early to tell if Android will ever be a serious competitor in the mobile market, where others have already marked considerable territory.

[ Special report: All about Google Android ]

"I'm not saying they're not going to be a factor, but we're in a world with Symbian, we're in a world with BlackBerry, we're in a world with Linux Mobile," he said. Google might be a factor someday, but right now these competitors "look a little tougher to me."

"We'll see what happens to Google in that fight," Ballmer said.

Ballmer's comments were made in response to a question about how he sees Google competitively in the mobile market. Ballmer had answered a previous question and cited Apple and BlackBerry maker Research in Motion (RIM) as competitors to Microsoft, but did not mention Google.

The Telstra Investor Day meeting was viewed online via webcast from Telstra's Web site. Ballmer was on hand to unveil an alliance between the two companies to jointly provide mobile services, unified communications, and hosted business services.

Specifically, the companies plan to provide to Telstra business customers an all-in-one mobile application package that includes e-mail, calendaring, contacts, a Web browser, and business software, they said. They also plan to integrate Telstra's hosted IP Telephony service with Microsoft Office applications, and give Telstra business customers access to Microsoft's hosted Office productivity and collaboration software through Telstra's T Suite portal.

Ballmer also told Telstra investors that he doesn't "really understand the business model" Google has for deriving revenue from Android, which is available to device makers and carriers free.

"If I went to my shareholder meeting, my analyst meeting, and said, 'Hey, we just launched a new product that has no revenue model, yeah, cheer for me' -- I'm not sure my investors would take that very well," Ballmer said. "But that's what Google is telling their investors about Android."

He expressed doubts that mobile carriers will buy Google's plan to give away Android so the company can put its search on devices for free. "The operators ... know they can still ask to be paid to carry ... search," Ballmer said.

Ballmer also suggested that because people do not pay for Android, there may not be a lot of incentive on the part of Google to "put the same kind of investment to improve the product" than they might on a product for which people actually pay.

The first mobile device using Android, T-Mobile's G1 phone, went on sale across the U.S. on Oct. 22 and in the U.K. last week. It will go on sale across Europe early next year, but no specific date for when it will go on sale in Australia has been set.