Ballmer Admits Microsoft Whiffed on Smartphones

Windows Phones: not dominant.

During an executive Q&A at Microsoft’s Financial Analyst Meeting on Sept. 19, outgoing CEO Steve Ballmer admitted that Windows Phone had a tiny share of the smartphone market, and expressed regret over his company’s inability to capitalize on burgeoning interest in mobile devices.

“I regret that there was a period in the early 2000s when we were so focused on what we had to do around Windows that we weren’t able to redeploy talent to the new device called the phone,” Ballmer told the audience of Wall Street analysts and investors. “That is the thing I regret the most.” (A video of the event is available here.)

Back in 2007, Ballmer famously denigrated the first-generation iPhone as an expensive toy that would fail to gain significant market share. He was forced to eat his words after the iPhone became a bestseller and ignited a huge market for touch-screen smartphones. Google subsequently plunged into that smartphone arena with Android, which was soon adopted by a variety of hardware manufacturers. While the iPhone (running iOS) and Android carved up the new market between them, Microsoft tried to come up with its own mobile strategy.

The result was Windows Phone, which (despite considerable investment on Microsoft’s part) continues to lag well behind Android and iOS in the smartphone wars. Microsoft recently announced its plans to acquire Nokia, in an Apple-like move to bring its smartphone manufacturing in-house; it remains to be seen, however, whether that move will alienate other hardware manufacturers. Microsoft also continues to lag in tablets, where Windows 8 has yet to capture a significant fraction of that market.

Ballmer also conceded that building products and services that appeal to consumers is “a lot trickier” than servicing the enterprise. “Services have to find their way onto non-Microsoft devices, and we certainly have to support that without religious bias, if you will.”

Even as he focused on discussing Microsoft’s financials, Ballmer couldn’t resist taking some swipes at Google, suggesting that the search-engine giant’s practices are “worthy of discussion with competition authority.” Given Microsoft’s own rocky history with federal regulators, that’s sort of like the pot calling the kettle black; but Ballmer’s statement also hints at how, in this new tech environment, Microsoft is very much the underdog when it comes to some of the most popular and lucrative product segments.

 

Image: Nokia

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