His response: "We like our model, as we are evolving it. In every category Apple competes, it's the low-volume player, except in tablets. In the PC market, obviously the advantage of diversity has mattered since 90-something percent of PCs that get sold are Windows PCs. We'll see what winds up mattering in tablets."
Newsflash: Apple is a high volume player in smartphones, too. And it was a pretty high volume player in the MP3 market with the iPod.
So, all the new markets it's entered lately (with the exception of Apple TV), it's become a high-volume player.
And it's become such a high volume player that Microsoft has been forced to chase Apple. First with the Zune, then with Windows Phone, and after that, with the Surface tablet, Microsoft's own attempt at doing both hardware and software.
Not to mention that low-volume, high-volume, whatever, Apple's revenue, profits, and market cap blew past Microsoft thanks to iPhones and iPads.
Instead of blustering about Apple being a low volume player, all Ballmer had to say was, "Apple has incredible success, so congratulations to it. We believe our model, which brings in $80 billion per year in sales is also pretty good, so I'm not envious of what they're doing."