Microsoft Chairman Bill Gates uttered some surprising if vague criticism of his firm’s mobile moves during an interview this week, noting that its “cell phone” strategy over the past decade was “clearly a mistake.” These comments have been misinterpreted by some to be about Windows Phone, but I believe Gates was really talking about Windows Mobile, which stagnated when Apple launched the innovative iPhone back in 2007.
The Gates comments came just one week after I called on Microsoft to incorporate Windows Phone into the more experienced team responsible for Windows client. You can find out more in "Hey, Microsoft: It’s Time to Pull Phone into Windows." But I don’t think Gates was talking about the same products as I was.
In an interview with Charlie Rose on CBS News, Gates was first asked to describe Microsoft’s progress since he stepped down as CEO and assumed the chairman role at the company.
“[CEO Steve Ballmer] and I are two of the most self-critical people you could imagine,” he said. “There were a lot of amazing things that Steve’s leadership [accomplished] at the company in the last year. Windows 8 is key to the future. The Surface computer. Bing, people are seeing it as a better search product. Xbox... Is it enough? No. He and I are not satisfied—in terms of breakthrough things—that we’re doing everything possible.”
After Mr. Rose noted that many recent discussions about Microsoft were negative—focused on such questions as “What happened with Microsoft?”—he asked Gates what he thought of the criticism.
“We appreciate the advice,” he said jokingly. But then he launched into a criticism of Microsoft’s mobile strategy, which presumably was part of the point of the interview.
“There are a lot of things—like cell phones—where we didn’t get out in the lead very early,” he said. “We didn’t miss cell phones, but the way we went about it didn’t allow us to get the leadership. It’s clearly a mistake.”
Although this might appear to be a criticism of Windows Phone, which Microsoft launched in 2010 as a brand-new product, it’s clear to me that Gates was speaking more generally about Microsoft’s “cell phone” (i.e., smartphone) strategy during Ballmer’s tenure as CEO, since that was the context of the conversation. And from 2007 (when Apple launched the iPhone) to 2010, what Microsoft was offering in that market was an out-of-date mobile platform called Windows Mobile.
Microsoft belatedly dropped Windows Mobile and started over with Windows Phone, an innovative mobile platform that offers an integrated experience instead of “whack-a-mole” apps like other smartphones. It features an award-winning design and now—in its most recent version—shares code with desktop versions of Windows.
Windows Phone, of course, hasn’t exactly set the world on fire from a sales perspective, and the platform currently commands just 3 percent of the global market for smartphones. But that slow start has more to do with its entrenched competitors—Android and iOS, which together control over 90 percent of the market—than with any failings in Windows Phone. Like the Mac in the PC market, Windows Phone is locked into a minority position it can’t escape, regardless of how much its users like it.
No matter what Gates meant specifically, it’s unclear what the company can do to make up lost ground in this market, regardless of how unhappy he and Mr. Ballmer are about it.