Ballmer Admits Microsoft Whiffed Big-Time On Smartphones

Nerval's Lobster writes "During an executive Q&A at Microsoft's Financial Analyst Meeting on Sept. 19 (video), outgoing CEO Steve Ballmer admitted that Windows Phone had a minuscule 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.' 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. Even as he focused on discussing Microsoft's financials, Ballmer also 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."

Comments

Re:Ballmer

[realmolo]

Absolutely.

Ballmer is the one that put the "Every department MUST rate their employees, and MUST fire the employees that have the lowest ratings. Every year." system in place, which is...insane. And stupid. In fact, it's so insane and stupid it's almost unbelievable. This guy is the CEO of one of the richest companies in the world? And he put a system in place to ENSURE that EVERYONE spends most of their workday sabotaging the other employees in order to save their own job?

Ballmer only got/kept the job because he's buddies with Gates, and buddies with the Board. That's how it works in EVERY corporation these days, but generally the CEO is somebody that, at worst, is harmless. Ballmer was actively incompetent, and his idiocy damaged the company. He should be sued by the shareholders.

Re:Let's be clear

[MightyYar]

But that isn't why it is popular.

Re:Let's be clear

[nine-times]

Finally, after losing out the low-end to Android and the high-end to Apple, they come out with a proper Windows Phone. Even then, while it certainly has it's merits, it is essentially another iPhone/Android and really brings nothing to the table that would make people choose it over the competition.

And I think this is a big issue that people overlook: People have a tendency to think in dichotomies, rightly or wrongly, especially regarding issues in which they lack deep knowledge. As a result, markets tend to be perceived in people's minds as a choice between the default/incumbent and the alternative/newcomer. This is in fact part of what has kept Windows in such a dominant position for so long. People are only willing to consider the two options that they were most aware of: commodity Windows machines or Macintoshes.

The tables are flipped on Microsoft in the mobile market. For all the same reasons Linux has trouble breaking into the desktop, Microsoft is having trouble breaking into phones. People are increasingly seeing their phone purchase as a choice between iPhone and Android, seeing one as the default and the other as the alternative, and people generally aren't looking for a second alternative. If Microsoft wants to succeed, it's not enough to be "as good". They have to be significantly better in ways that people care about, and they need to maintain the advantage few a few years, without allowing Apple and Google to catch up, so that there's time for people's contracts to expire. Good luck with that.

Re:Let's be clear

[mwehle]

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.'

Should be...

I regret that there was a period in the early 2000s when I was so focused on what I had to do around Windows that I wasn'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.'

Absolutely. Years ago I was working for Microsoft at the Mountain View campus when Ballmer interrupted his address to a cafeteria full of employees to chastise a guy who had an iPhone, belligerently telling the crowd that we should all practice brand loyalty the way his family did. At the time I was still holding out hope for Windows Mobile, and had a Blackjack in my pocket, but I remember thinking Ballmer was a royal asshole, without a shred of humility and unable to have the common sense to recognize an engineer's choice of superior technology. At the time there were a number of MS employees in the audience with iPhones in their pockets. Ballmer could have made points by admitting the worth of the competition, and trying to rally opposition. Instead he just looked like a chair-throwing lunkhead.