People give Balmer a lot of crap, and while most of it is well deserved, I think people give him too hard a time for his comments about the iPhone. It's essential to consider the context of the time. When he made that statement, BlackBerry was dominant in the business sector due to its keyboard and secure email features. Windows Mobile devices were also pretty competitive, and the concept of a touch-only device was foreign to many people. Balmer's comments were reflective of the prevailing business sentiment at the time.
The lesson here is not just that Balmer was wrong, but that any executive can be if they become too myopic, focusing only on what has been successful in the past without considering the disruptive potential of new technologies.