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Ballmer Admits Microsoft Whiffed Big-Time On Smartphones 278

Posted by Soulskill
from the first-step-is-admitting-you-have-a-problem dept.
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."
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Ballmer Admits Microsoft Whiffed Big-Time On Smartphones

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  • Let's be clear (Score:5, Insightful)

    by djupedal (584558) on Friday September 20, 2013 @11:44AM (#44903469)
    MS whiffed when they put balless in charge of anything. He can stop blaming others...
  • by TrollstonButterbeans (2914995) on Friday September 20, 2013 @11:53AM (#44903581)
    Microsoft misread several markets really badly in the early 2000s and present. They had an attitude that they had "won" the entire PC and computing market for now and forever.

    This caused them to grow really complacent and unimaginative and slow to react to market changes.

    But possibly the worst factor was the narrow Microsoft-centric nerdism amongst a good share of the Microsoft faithful that kept eyes closed to very obvious shortcomings in Microsoft's various bungled attempts in the last decade.
  • Re:Ballmer (Score:5, Insightful)

    by realmolo (574068) on Friday September 20, 2013 @11:54AM (#44903591)


    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.

  • by bogaboga (793279) on Friday September 20, 2013 @11:58AM (#44903645)

    ...that's what is keeping me from buying into their [eco]system. The cash Microsoft have collected from me over the years should be enough, I believe. The name Microsoft just makes me yawn.

    Anyone feel the same?

  • by Todd Knarr (15451) on Friday September 20, 2013 @11:58AM (#44903649) Homepage

    Microsoft simply failed to recognize that people use phones differently than they use desktop computers. MS started by trying to make a desktop Windows run on a smartphone. That cratered because a UI that works on a desktop is awkward and hard to use on the small screen of a phone. Lack of touchscreen support didn't help one bit. And even after they got that concept, they've continued to try to force people into the Windows ecosystem rather than attempting to fit their phones into the existing ecosystems. People don't care much about Office on their phones beyond e-mail and for personal use Exchange integration is almost irrelevant because most people's e-mail accounts aren't Exchange, they're generic POP3/IMAP4 accounts or GMail. Now Microsoft is left with a minority position and an unwillingness to play in anyone else's sandbox, not to mention having actively torqued off the owner of one of the two biggest sandboxes out there (Google). Is it any wonder they're having a hard time gaining traction?

  • Re:Ballmer (Score:5, Insightful)

    by hedwards (940851) on Friday September 20, 2013 @12:15PM (#44903841)

    What happens if all the members of that team are above average in terms of company wide productivity? Or you have a weak team where all of them are below average? You lose one of the better employees and one of the worst employees. But, it's not even a break even situation as stress and burn out will affect the stronger team more than the weak team.

    Normally, I'd assume that you're trolling, but there's a lot of morons on here that view humans as replaceable machinery to be used and discarded on a whim because having a job is a "privilege" and not a right. But, without a decent job, you can't afford an apartment, food or anything beyond the most meager of necessities, because ZOMG we can't actually set up a system that will care for people that aren't already hugely wealthy.

    The right wing's complete and utter incompetence on economic matters is threatening to render the US back to the 3rd world.

  • Re:Poor Windows CE (Score:5, Insightful)

    by unixisc (2429386) on Friday September 20, 2013 @12:18PM (#44903867)

    CE was barely a good PDA OS, much less a phone OS. At that time, the mistake Microsoft made was putting a PC UI on PDAs. They corrected that w/ Windows Phone 8, albeit late to market, but the real mistake they did there was going overboard and putting that same UI on the PC version of Windows 8.

    Otherwise, my Lumia has a fine interface, and is actually the best handheld for typing that I've had.

  • by BitwizeGHC (145393) on Friday September 20, 2013 @12:21PM (#44903905) Homepage

    I've said before that Gates stepping down as CEO was exactly like Ernst Stavro Blofeld stepping down as head of SPECTRE and letting Number Two take the reins. There's a reason why he's called Number Two, and a reason why Blofeld is considered the evil genius.

  • by transporter_ii (986545) on Friday September 20, 2013 @12:31PM (#44904039) Homepage

    Everyone keeps coming up with suggestions to put them back on top. Everyone just shut up. I like them exactly where they are at. They still provide some competition in the marketplace, which is good. They did, however, get knocked down a few pegs...which is really where we want them at, right? I for one, don't want MS to have a killer phone/tablet. Keep them around, but in the exact spot they are in now: NOT ON TOP.

  • Re:Let's be clear (Score:5, Insightful)

    by ackthpt (218170) on Friday September 20, 2013 @12:33PM (#44904065) Homepage Journal

    MS whiffed when they put balless in charge of anything. He can stop blaming others...

    A man can fail many times, but he isn't a failure until he begins to blame somebody else.
    - John Burroughs

    Steve's been a failure and has just capped his career. Notice his use of the royal we, deflecting direct blame to the company, not its leader:

    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.'

  • Re:Let's be clear (Score:2, Insightful)

    by Anonymous Coward on Friday September 20, 2013 @12:35PM (#44904099)

    Interesting points, but I can't say I agree. Microsoft was not looking to make a Phone a PC, they were looking to dominate the market and abuse their monopoly to shut down competition. That is half of what the Nokia fiasco was and is. MS does not want to be good at tech, they want to "rule" tech with an iron fist. It's that mentality across the board that has lead to disaster after disaster.

    I agree with what you stated, just not that it was the primary issue with Ballmouth and MS.

    Posting AC for modding purposes. s.petry

  • Re:Ballmer (Score:3, Insightful)

    by Anonymous Coward on Friday September 20, 2013 @12:46PM (#44904259)

    I'll try to be neutral, but I think there's a more correct version of the left-wing economics in the US (what you've described is a more "theological" version of it, so to speak).

    It's that below a certain amount of wealth, your ability to create wealth is arbitrarily curtailed, while above a certain wealth, your ability to create wealth has diminishing returns. So we have an inefficient allocation of wealth that is self-reinforcing. The rising tide will benefit all on average, but especially the poor, if we work to counteract the inequalities.

    Basically, personal wealth is used as both an incentive to create more societal wealth, and a means to create more personal wealth. Ideally the incentive and the means aspects should be decoupled so you don't get locked in by circumstance.

  • Re:Let's be clear (Score:5, Insightful)

    by MightyYar (622222) on Friday September 20, 2013 @12:49PM (#44904285)

    But that isn't why it is popular.

  • Re:Let's be clear (Score:5, Insightful)

    by nine-times (778537) <> on Friday September 20, 2013 @12:49PM (#44904289) Homepage

    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.

  • by MightyMartian (840721) on Friday September 20, 2013 @12:49PM (#44904293) Journal

    It makes sense if that market is at least partially responsible for eroding one of their key markets. While iOS and Android are not completely responsible for the substantial drop in PC sales, the rise of the smart device has played a substantial role. If Microsoft cannot find a way to insert itself into this market, then its long term outlook on the consumer end of the business is cast in substantial doubt.

    It's clear by the introduction of a (heavily crippled) Office variant for Android and iOS that they are ultimately willing to surrender to the temptation to once again put a version of Office on a platform it does not control. It did so with Mac, but Macs have always been bit players so I don't think that represents the kind of shift MS is prepared to pursue now. It's the first sign that the company is prepared to cede market dominance to Android and iOS, and get its piece of the pie by releasing some variant of Office, which is the company's backbone.

    It's still just dipping its toe in the water, but I suspect over the next couple of years you're going to see major shifts in how MS views its consumer offerings. From what I can tell, there is a growing ill sentiment among shareholders to Microsoft just endlessly throwing money at consumer markets and not getting any kind of return. Even the XBox, while it has been in the black on a quarterly basis for the last few quarters, still is years away from paying back the vast investment in capital and R&D that Redmond threw at it.

  • Re:Early 2000s (Score:4, Insightful)

    by Blakey Rat (99501) on Friday September 20, 2013 @01:11PM (#44904565)

    You seem to assume there wasn't a new version of Windows because Microsoft was doing nothing, rather than the actual reason that the Vista project was a complete disaster that went years over-schedule.

    That's what he's referring to, no doubt. "What we had to do around Windows" was "getting Vista into shippable state".

  • by Christophotron (812632) on Friday September 20, 2013 @01:19PM (#44904663)
    This is correct. I was a Windows Mobile user from 2006-2010. It was the best mobile platform at the time -- it did more than the competitors. Microsoft let it rot and fade away into obscurity, while the competition got better and better. By the time Microsoft "upgraded" their mobile OS (read: completely EOL'ed and threw away the previous version and replaced it with a completely new, incompatible, less-functional one), Android and IOS had completely taken over the market.

    I was a WM user for two phone-generations and I had no choice but to switch to Android. In 2010, Microsoft simply did not have a viable product anymore, even compared to their old phones, let alone the new Android and iPhones. They started completely over from scratch, breaking all compatibility with previous versions (_twice_, with both WP7 and WP8), way too late in the development cycle to compete with current offerings from competitors. Windows Phone continues to try to catch up to its former self, in features and capability, while Android has gone way beyond that, and continues to improve. Nearly all of the former Windows Mobile developers have switched to Android and will likely never return -- the mindshare loss was devastating.

    But Microsoft has a lot of money to throw at the problem -- they will eventually catch up, and then struggle to regain what they once had.
  • Re:Early 2000s (Score:2, Insightful)

    by sootman (158191) on Friday September 20, 2013 @01:33PM (#44904845) Homepage Journal

    No, he means the early 2000s when they were working on... uh... Windows Mobile. [] That's how the missed the, uh, mobile thing.

    In all seriousness, MS whiffed on mobile the same way they ignored the WWW in the early days. Even though they somewhat saw it coming, they badly guessed on the direction. They only did as well as they did because they were in the position to put that little blue 'E' on every desktop out-of-the-box. (Remember when you used to sign up for an ISP and they'd send you a CD with TCP/IP software and some browsers on it? Imagine if that remained the only way people got their first browser.) In mobile, it doesn't look like they're going to get a second chance. Apple's iPhone business became bigger than all of MS in just five short years.

  • by Anonymous Coward on Friday September 20, 2013 @01:35PM (#44904871)

    I used to work for Microsoft from the mid-90's to the mid-2000's and once again Ballmer engages in the worst kind of revisionist history. The problem wasn't that he didn't "redeploy talent". The problem is that the vision for phone and tablets was WRONG. He can't admit that because that would be admitting that the fault lies at the top, specifically with Gates and himself. A lot of CEO are guilty of that. In earning calls they'll blame their problems on "execution", implying that their strategy is flawless but the peons just can't do anything right.

    Things used to turn out OK at Microsoft because there was a culture that encouraged debate. You could fight for your ideas regardless of rank. It was OK to disagree with your boss, your VP, or even your CEO. Eventually, the ideas that prevailed were mostly right.

    But all that went away during the Ballmer years. The key to success at MS nowadays is to be a yes-man. Starting in 2001-2002 I started noticing that when somebody would disagree with a superior in a meeting the atmosphere would get very awkward. People would stare at their shoes. The whole place felt like soviet Russia. Reports would be embellished at every hierarchical levels (and they multiplied; I was 6 steps away from Gates when I started, 12 steps from Ballmer when i left).

    It's like a soviet factory that has a quota to produce 5000 tractors a year. The line workers would tell their manager that with the parts shortages, they didn't think they could build more than 3000. The manager would tell the plant director that they wouldn't quite hit the quota; maybe they'd build 4500. The director would tell comrade Komissar that he's think they would exceed the quota by 500. The Komissar would report to the party chairman that they'd handily beat the quota and build 6000 tractors. At the end of the year 2000 tractors were built and nobody knew how their predictions could be so off.


  • by cervesaebraciator (2352888) on Friday September 20, 2013 @01:43PM (#44904977)

    This one isn't partisan.

    Regrettably, you're correct. There really isn't a left-wing in this country when it comes to economics and an exceptionally few principled libertarians are the only real right-wing. Sure, the tea-party has made right-wing rhetoric more popular, but with the exception of those few libertarians most in the GOP are all for the corrupt corporatist 'partnership' between government and business that was the great economic project of neo-conservative "compassionate conservatism". Sure, the rule of the democratic party since 2008 which managed to pass a health-care reform might make one think the left had risen again. But when one actually looks at the bill he realizes, contrary to establishment Republican rhetoric, the ACA is another business/government partnership which was itself created by Republican think-tanks. There hasn't been a real economic left in this country since before Clinton (incidentally, the notion that Clinton was himself on the left, popular during the Bush years among Republicans, is laughable but indicative; they regard a president as leftist who supported welfare reform and further deregulated the credit market).

    What we have in the politics of this country is a broad consensus. Republicans get elected campaigning for smaller government, but their campaign is financed by a corporation which expects to receive a return on its investment. Democrats get electing campaigning for tighter regulation on business, but their campaign is financed by businesses which hope for regulations that will benefit them and harm competition. Both campaign on social issues which people care deeply about--and rightly so--but neither means to do anything significant about them unless forced. Both exploit divisions in Congress they create to ensure angry voters will come to the polls.

    The center is the problem. I'm pretty far on the right, having great sympathy with the agrarians and distributists and reckoning modern industrial capitalism as destructive toward traditional values, but I'd sooner have more real socialists elected by the Democratic party with this lot. Compromise is possible between two people who are principled. The socialist may wish to raise the minimum wage and reduce working hours to increase employment and justice toward the workers. I might agree, if he can show his proposal doesn't lead to excess inflation, since such a proposal would be good for strengthening family life. I would ask in return that we increase tax credits for homeowners (single-homeowners only, of course, and for homes valued under a certain threshold) since this would at once decrease taxes and increase the independence and stability of the family. The socialist might agree, for in spite of shrinking the tax base slightly, such a proposal would help move us toward a more progressive tax policy--something which was once an ideal for the left in this country but has eroded for many reasons. Yet the socialist and I will never agree on the importance of private property. That is alright. We won't agree on everything, but we can find common ground precisely because we are both principled. Thus I wish there were a real left and a real right in this country, that we might find compromise. But the centrist D's and R's can never compromise and never agree, precisely because they stand for nothing other than victory for their tribe and the corporate sponsorship that comes with it.

  • Re:Let's be clear (Score:5, Insightful)

    by gallondr00nk (868673) on Friday September 20, 2013 @01:48PM (#44905023)

    People have a tendency to think in dichotomies, rightly or wrongly

    Ahh, I see what you did there.

  • Re:Let's be clear (Score:5, Insightful)

    by mwehle (2491950) on Friday September 20, 2013 @01:50PM (#44905031) Homepage

    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.

  • by Anonymous Coward on Friday September 20, 2013 @01:53PM (#44905085)

    Not really. They must be in constant competition for customers, because that is the only way that we customers can win.

I don't want to achieve immortality through my work. I want to achieve immortality through not dying. -- Woody Allen