Does Microsoft have an answer for the iPhone? – Prince McLean, in AppleInsider’s article “Steve Ballmer laughs off Google’s Chrome OS threat”:
Microsoft could also take on Apple in delivering its own higher-end mobile device, although the company is late to the gate. Sources within Microsoft report that the launch of the iPhone 3GS blew Microsoft’s own internal plans out of the water. “I read the specs on the iPhone 3G S,” one Microsoft developer recently wrote, “and realized it has already surpassed the thing we’re trying to do that won’t ship for a large number of months.”