Google's Android and Apple's iPhone devices dominate the smartphone market. However, Microsoft unveiled its Windows 8 products 10 days ago and Ballmer said that expects sales of Windows Phone to grow fast.
"With the work we have done with Nokia, HTC, Samsung and others there is now an opportunity to create really a strong third participant in the smartphone market," he said in Tel Aviv at Microsoft's first Windows 8 launch outside the United States.
"We are still relatively small. I expect the volumes on Windows Phone to really ramp quickly."
Finnish phone maker Nokia last week launched its Windows 8-based Lumia smartphones, on which the company's recovery hopes rest. Nokia, once the world's biggest mobile phone manufacturer, last month reported an underlying loss for a third straight quarter.
Shipments of Android-based smartphones made by Samsung, HTC and other vendors nearly doubled in the third quarter, reaching 136 million units, according to industry research company IDC. The strong sales boosted Android's share of the worldwide smartphone market to 75 percent, from 57.5 percent in the same period last year.
Apple's share of the market rose to 14.9 percent during the third quarter, from 13.8 percent a year earlier. Apple's iPhone uses the company's own iOS mobile software.
Ballmer said that there will be more marketing and advertising around Windows 8, its Surface tablet and Windows Phone than for any previous Microsoft products.
He also reiterated that Microsoft sold more than four million upgrades of Windows 8 in the first weekend after its launch.
"The initial reaction to these products has been really really phenomenal ... And if you look at how people will get Windows 8, the truth of the matter is more people over time will get Windows 8 by buying a new computer than by upgrading old computers," Ballmer said, noting that 400 million personal computers are sold globally each year.
© Thomson Reuters 2012