In this video, Microsoft CEO Steve Ballmer discusses the impact of the Apple iPhone which was unveiled by Steve Jobs at the recent MacWorld keynote address.

Obviously stung when asked whether or not the iPhone took some of the spotlight from the Zune, Ballmer responds that the iPhone is “by far the most expensive phone in the marketplace,” and that “it doesn’t appeal to business customers because it doesn’t have a keyboard”.

Ballmer discusses Microsoft’s mobile strategy and its emphasis on music and entertainment, stating that “right now we are selling millions of phones and Apple is selling zero”. Ballmer acknowledges Apple’s preeminent position in the entertainment domain, but asserts his confidence that Microsoft is very much “in the game” when it comes to mobile entertainment.