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As an olde Apple design fanboy it pains me to say this -- but Microsoft has the better interface. You can dress it up but Android feels like it's Windows to Mac OS, it's just so similar. On the other hand what Microsoft as done is original, and give the proper marketing can find a niche.
I came to say the same. We have all three in my household, and the Android UI absolutely feels 'cheap' compared to the fluidly animated lushness of both WP7 and iOS.
Ballmer is clearly very busy running Microsoft. It would be unsurprising to learn that he is too busy to have the time to play around with rival technology platforms and evaluate them himself. Consequently he gets to base his opinions on what his senior execs and VPs tell him about the competition. Which in turn is coloured by their perceptions of their position within Microsoft.

You do not get to grab additional resources within an organization by talking up the competition, especially when the competition is in a market-dominating position relative to your own division. You get resources by trash-talking them and promising to topple them with just one more push.

So my gut feeling is that Ballmer is not delusional; he's just being fed an unrealistic line by his subordinates, and doesn't have either the time to second guess them himself or the sense of urgency necessary to set up an independent business intelligent unit to give him the necessary no-bullshit sanity check (to learn if his generals are reporting their victories on the battlefield accurately ... or not).

In other words: he's more likely being actively misled by others than personally delusional.

It makes me think of what Hitler's top generals must have told him, which led him to making bad decisions in the war.
It's funny because I agreed with the top comment until you posted this. Now that you mention it though believing the positive pronouncements of your top generals at a time when you're clearly losing is delusional. Especially when it leads you to make decisions like moving Windows to Metro (therefore betting the whole company on an interface that has yet to succeed with consumers).
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I agree that his VPs might be blowing sunshine up his arse, but that is no excuse. It’s his JOB to be such a great leader of managers that he knows how to get them to tell him the truth. It’s his job to read tons of positive press and reports and pick out the warning signs and the possible problems. It’s his job to be able to pick up one of those “cheap phones” and remember how Microsoft and cheap PCs beat Apple within an inch of death.

And if nothing else, he ought to remember how well things turned out the last time he laughed at something:

https://www.youtube.com/watch?v=XYcxvEfUikg

Is Ballmer delusional?

No, this is intentional and something he has always done. He plays up Microsoft's products while downplaying all competitors.

It might lead one to believe he's paid to do this. He downplays competitors where it sounds credible, he doesn't go around saying "Apple has a crap UI" he goes around saying "Apple phones are too expensive"
Ballmer is the Ricky Bobby of CEOs.
Ballmer had better hope that he's wrong. As of right now, Micro$oft is making money hand over fist off Android. If that were to go away, M$ might be in some serious trouble :p
I don't really call myself a fanboy of any one camp, I use whatever I think is best. And minus catching up in applications (which WP7 is working on), I think that the experience from a Windows Phone is better than an Android hands down. Android has more flexibility but everything doesn't feel like it fits together. iOS and WP7 both have a way of making nearly everything act and seem like it fits perfectly together. Is he delusional? No, it's normal Balmer, overconfident and a bit too cocky.

I do think that if Nokia can get our a great WP7 phone soon, I believe it'll be a top 3 phone.

There is a substantial likelihood that Ballmer is correct. Android's market growth has been based on the fact that it offers a touch interface and is not controlled by Apple.

Outside of the handful of people dogmatically committed to open software (whatever that may be), practically nobody actually loves Android.

It's simply a cost effective alternative to iOS. However, Microsoft's patent portfolio has raised its cost and Google's lack of B2B orientation and "if it's on the web, it's in the public domain" approach to IP create an uncertain roadmap for manufacturers and the rest of the industry.

And Google's weaknesses are exactly Microsoft's strengths. Throw in the perception of potential conflicts surrounding Google's purchase of Motorola's mobile division and the preferential release of Honeycomb, and WP7 becomes even more favorably positioned among phone manufacturers.

Microsoft appears to have a coherent long term strategy - my mother will probably buy the phone that works like her computer - the one likely to have a Metro UI in the not too distant future.

Despite spin to the contrary, consumers overwhelmingly vote with their wallets when it comes to Microsoft products and manufacturer's tend to prefer supply chain partners willing to understand their needs rather than being left to their own devices and guessing at the development roadmap.

I dont see how you guys can't see the clear link bait here.

This is the direct quote of Ballmer from the original article referenced here:

http://www.theregister.co.uk/2011/10/19/ballmer_disses_andro...

“The biggest advantage we have over Android is that you don’t need to be a computer scientist to use a Windows Phone,” he said. “But the cheapest phones will be Android, and we are going to have to look at bringing the cost of our handsets down.”

If you actually try to comprehend that 2nd part, Ballmer is clearly saying the lowest COST phones will be Andriod, probably because it's cheaper to develop on (almost free) and has lower hardware requirements (almost none), and Microsoft needs to decrease the COST of WP7 hardware to compete in the low end market.

This has NOTHING to do with the quality of Andriod, which is what the author is implying here with the title "Calls Andriod 'cheap'".

Thanks Steve Ballmer, I never knew there were so many computer scientists in the world (200 million+ android installs?).

I mean he's the marketing guy and he's spinning here and he's right Windows needs to get more competitive across the board and get some market share or mobile will turn into a bleeding ulcer like Bing.