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Ballmer Admits Microsoft Whiffed Big-Time On Smartphones

Soulskill posted about a year ago | from the first-step-is-admitting-you-have-a-problem dept.

Microsoft 278

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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Let's be clear (4, Insightful)

djupedal (584558) | about a year ago | (#44903469)

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

Re: Let's be clear (0)

Anonymous Coward | about a year ago | (#44903509)

Agree

Re:Let's be clear (5, Interesting)

Anonymous Coward | about a year ago | (#44903539)

Ballmer is a sales guy. Sales guys look good on paper because they're bringing in the revenue. But they're a disaster in a leadership role. Sales is always based on short-term goals. That's the nature of the job. So sales guys do whatever they have to do to meet their quota or monthly targets or get their commission. It's not in the best interest of the costumer, it's not in the best interest of the company, it's in the best interest of themselves.

I've worked and consulted for plenty of companies where a sales guy get promoted to the top. It never works out well.

Re:Let's be clear (5, Interesting)

MightyYar (622222) | about a year ago | (#44903803)

I disagree that was the problem. The problem was that he made the same mistake that most of us geeks on here make - projection. He thought that people wanted smart phones to be little computers. Most of the commenters on here want the same thing - a little unix box that they can ssh with and such. He led MS down a path of making little pocket computers, complete with Start menus and everything. And you know what? They were more successful than just about any other smart phone. Things looked good... good enough to dismiss the iPhone as a toy when it came out.

And he was right, it was a toy. But apparently the toy market is a lot bigger than the pocket computer market. It turns out that people wanted a pocket toy, and not a pocket computer. That the toy happens to use a computer to make it so much fun is a technical issue.

Where Balmer gets blame is how badly MS executed on their toy once it became clear that the market liked the iPhone. Google figured it out IMMEDIATELY, so it's not as if it was too much to expect. Sure, initial Android sets kind of sucked, but they were toys and they were cheap - so people could overlook a lot. And since then, it has gotten quite slick. Microsoft, meanwhile, assumed that kids were the driver and brought out that ridiculous Kin based on CE. Then they tried coming out with a refreshed CE in 6.5, which fooled no one. 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 on top of this, it was still trying to pursue the "charge for software" model, when the chief competition is free!

Now they finally made the right move in buying a hardware vendor. If they go toe-to-toe with Samsung, I'm not sure they will ever recoup their investment. After all, Samsung is vertically integrated and is a monster in their capacity to turn a small profit on low-end phones. They are going to have to chase Apple (and Samsung) at the high end. I wish them luck!

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

Anonymous Coward | about a year ago | (#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:Let's be clear (-1, Flamebait)

aaaaaaargh! (1150173) | about a year ago | (#44904189)

What the fuck are you talking about? The iPhone literally is a little Unix computer you can ssh to.

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

MightyYar (622222) | about a year ago | (#44904285)

But that isn't why it is popular.

Re:Let's be clear (0)

Anonymous Coward | about a year ago | (#44904313)

What the fuck are you talking about? The iPhone literally is a little Unix computer you can ssh to.

You are confusing iPhone-"physical object" with iPhone-"brand". The iPhone-"brand" consumer base doesn't give two shits that it's technically "a little Unix computer you can ssh to".

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

nine-times (778537) | about a year ago | (#44904289)

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 (1)

MightyYar (622222) | about a year ago | (#44904465)

Good luck with that.

I think what they need to do is pick a niche or a few niches and specialize like crazy to those niches. Be the best in class and get a reputation for being the best in class. Slowly grow from that position.

Nokia had the right idea with the good cameras in their smart phones, but they got drawn in to the low end, selling the crappy version at Walmart. I suspect both the Nokia and MS cultures are very hung up on growing market-share when what they need to be doing is brand-building and trying to find under-served markets.

Still, that's a long term strategy that will burn a lot of cash.

Re:Let's be clear (0)

Anonymous Coward | about a year ago | (#44904551)

It's an interesting theory, but I think you're just a little off calling this new "smartphone" style device a "toy". People want more than a toy, they're not buying PSP's and Gameboy's like they are iPhones. People want a device that does it all, phone / text / email but also web browsing, video, music, apps - specific web functionaliy, paying bills, etc. It's not a toy to many of us, it's a tool.

Re:Let's be clear (0)

Anonymous Coward | about a year ago | (#44904169)

Michael Scott: sales guy

Re:Let's be clear (1)

danomac (1032160) | about a year ago | (#44903563)

MS whiffed and then they cleared the room. But then afterwards nobody went back in that room to fix it. That's some lasting effects there.

The first step is (0)

Anonymous Coward | about a year ago | (#44903635)

to admit you have a problem.

Re:Let's be clear (0)

Anonymous Coward | about a year ago | (#44904037)

Even if Microsoft had a phone way back when, it NEVER would have taken off had it not been for Apple, and everyone copying it!

Re:Let's be clear (4, Insightful)

ackthpt (218170) | about a year ago | (#44904065)

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.'

Ballmer (0)

Anonymous Coward | about a year ago | (#44903513)

Gates chose a big, fat, retarded individual to run the company after he retired. And Gates got a lost decade in return.

Re:Ballmer (5, Insightful)

realmolo (574068) | about a year ago | (#44903591)

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:Ballmer (3, Informative)

alen (225700) | about a year ago | (#44903643)

what do you expect? ballmer got his MBA at harvard at the same time the current GE CEO was there. and that's where the ranking system was born, at GE

Re:Ballmer (1)

jbolden (176878) | about a year ago | (#44903979)

Actually stack ranking was born in the legal profession (Cravath System) and from there the US military. GE then implemented it and Welch proposed it across the board for CEOs.

Re:Ballmer (5, Interesting)

dunezone (899268) | about a year ago | (#44904297)

> what do you expect? ballmer got his MBA at harvard at the same time the current GE CEO was there. and that's where the ranking system was born, at GE

What you are referring to is the Jack Welch approach. Its a strategy that was developed to eliminate excess employees. It works. Its biggest pro is that once implemented it shows the main result of excess employee elimination in a short period of time. It has two major flaws one that appears in the short term and one that appears in the long term if you continue to the use the strategy. The major flaw in the short term is that you can have a department full of amazing employees but you're forced to eliminate someone, this is probably something most companies are willing to accept when deploying the strategy. The other major flaw which Microsoft is now seeing is what happens when you keep this strategy around for too long. It creates a hostile environment where no one wants to help each other. No department wants to see the other succeed nor do they want to see their co-workers succeed because you're in constant competition for your own job.

Its a strategy that can work and it did for General Electric, but Jack Welch had other strategies he mixed with this strategy that made it work with GE.

Re:Ballmer (0)

Anonymous Coward | about a year ago | (#44903775)

Some of the biggest and most successful companies around use this very system to retain the best people and get rid of the dead weight.

Efficiency and productivity are what keep people employed. The guy in TFA is a serious bum and should not be portrayed like some role model who managed to "beat the system."

Sorry if you left-wingers believe that having a job is a right, not a priviledge.

Re:Ballmer (4, Insightful)

hedwards (940851) | about a year ago | (#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:Ballmer (2)

jbolden (176878) | about a year ago | (#44904015)

I agree with you Republicans are nuts... but in all fairness. Microsoft is a Democrat company. Ballmer is a Democrat. Stack ranking has been popular with Democrats and Republican like Welch. This one isn't partisan.

Re:Ballmer (3, Informative)

hedwards (940851) | about a year ago | (#44904059)

Which party is it that's in favor of cutting food stamps to give tax breaks to the rich?

Ballmer's rich, he may be a Democrat, but he has a vested interest in seeing that conservative policies are followed. As those policies are how he was able to accumulate so much wealth without contributing anything of value. Under a more liberal economic policy and regulatory set up, MS would never have been allowed to grow as big as it has, without earning that size. They would have been broken up in the late '90s when they used their size to stifle innovation across the industry.

Bottom line here is that it's the conservatives that are always trumpeting this sort of maladaptive business practice so that they can easily scare voters.

Re:Ballmer (0)

Anonymous Coward | about a year ago | (#44904317)

Been watching MSNBC again eh?

All that cool-aid you are spewing about republicans is simply NOT TRUE. if you listen to what they *actually* trying to do and not what some folks are saying they are trying to do, I think your opinion of republicans might be a bit different.

Rush calls folks like you "Low information voters" which means you are largely misinformed about what is actually going on.

Re:Ballmer (1)

jbolden (176878) | about a year ago | (#44904423)

Which party is it that's in favor of cutting food stamps to give tax breaks to the rich?

The Republicans but we were discussing stat ranking not food stamps. As for Microsoft not being broken up.... that was the D.C. Circuit Court of Appeals.

Re:Ballmer (1)

EzInKy (115248) | about a year ago | (#44904101)

This is an authoriatarian versus libertarian issue, not right versus left.

self-selection (0)

Anonymous Coward | about a year ago | (#44904255)

It's unlikely that they'd all be above average, except maybe in a local value of average. If they have any talent, they avoid that company like the plague. Those that are attracted don't come with much of any technical skill to speak of. They come with enough to get their foot in the door, and then use their time to politic, backstab and otherwise climb the ladder. Then all that is made worse by the stack ranking system which gets rid of those that aren't best at politicking, backstabbing and ladder climbing.

Re:Ballmer (1)

thoth (7907) | about a year ago | (#44904351)

What happens if all the members of that team are above average in terms of company wide productivity?

If that honestly happens, then the manager would be expected to defend this situation in ranking meetings by showing numbers - features implemented, bugs fixed, on time delivery, etc.

Or you have a weak team where all of them are below average?

Easier situation - the lowest goes and the manager doesn't have to feel too bad.

I served my time there ;) but never was a manager.

Re:Ballmer (0)

Anonymous Coward | about a year ago | (#44903843)

Good business practice is left-wing? I love it!

You do realize that every list by definition will have people at the bottom. If you consider them "dead weight" then welcome to employee churn. I hope you don't run a business because you'd run it like a McDonald's franchise.

Re:Ballmer (2)

Entropius (188861) | about a year ago | (#44903967)

It's not left-wing; if anything, it's right-wing. (I'm a centrist.)

Left-wing economics in the US seems predicated on the assumption that there is X amount of stuff to go around, and the 1% are using more than their share of stuff, and ought to give more to everyone else. The left-wing narrative sets the wealthy against the poor.

Right-wing economics (at least the sane, non-theological version of it) says that wealth isn't a zero-sum game, and that wealth is created for both parties (whether rich or poor) whenever there's a voluntary exchange of labor, goods, land, whatever. The right-wing narrative says that we are all in a quest to improve the overall wealth of society, and "a rising tide floats all boats".

Ballmer pits employees against each other; "good business practice" pits them all against the bottom line. If even the worst fellow in the shop creates more value for the company than his salary, he's worth keeping around. That's more like the right-wing narrative.

Re:Ballmer (3, Insightful)

Anonymous Coward | about a year ago | (#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:Ballmer (0)

Anonymous Coward | about a year ago | (#44903945)

except when your "dead weight" is actually still highly talented for the industry, you are actually firing good talent for the sake of a stupid rating system. Now your talent has to waste time worrying about their job and how to keep it instead of innovating.

Re:Ballmer (0)

Anonymous Coward | about a year ago | (#44904009)

privilege*

Re:Ballmer (5, Interesting)

Anonymous Coward | about a year ago | (#44904021)

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?

(as an ex-Microsoftie) the negative impact of the review system wasn't just about saving yourself from landing in the bottom 10% and being managed out, it was all through the scale also for the top performers. There was a forced distribution curve, across often quite small and visible groups of employees. Only so many % in a certain pay level band and role type could get the best rating, only so many % could get the next level etc. This had significant impact on your yearly bonus, and on your career opportunities.

Problem was: 1) You often knew who your internal competition for getting a good rating was (and you were often asked to provide 360* feedback on them...). 2) The people who decided on your final rating (moving people up and down to fit the curve) was usually skip-level execs that had no direct visibility on your performance unless you played politics - which this obviously became a very strong incentive to do. Getting a good rating was about focusing on internal success factors and self-marketing (making sure you were perceived better than your internal competition) much more than external (customer/market) focus, performance and results. I still believe the senior leadership team grossly underestimate the toxic effect this have on the org, and how much focus and resources are wasted on these internally driven motivations.

This was one of the main reasons for me leaving. I'm now very glad to be working somewhere were we can succeed together. It makes such a difference. And for friends still there, I really hope the new CEO can put an end to this madness.

Re:Ballmer (0)

Anonymous Coward | about a year ago | (#44904365)

As a completely different AC (and not the same poster at all) who modded this up, I am also a former MS employee and I endorse this message.

Its friday... (0)

Anonymous Coward | about a year ago | (#44903553)

Let the trash talk begins... Microsoft is evil and Ballmer flying chairs jokes incoming!

Re:Its friday... (2)

Naosuke (662973) | about a year ago | (#44903899)

Let's not forget the monkey dance

Re:Its friday... (5, Interesting)

LordThyGod (1465887) | about a year ago | (#44904223)

Let's not forget the monkey dance

Really, the stupidest thing the man ever did was laugh out loud in public at the iphone. That pretty much says it all. He doesn't understand technology. That would seem to be a nice quality to have for his role. The entire strategy there is wait for someone else to do something nice, get some traction, use your own market share to muscle your way into the market, and then start pushing everybody else out. That worked for Gates, but Ballmer was too slow to react. Constantly. Could not see it coming, and then laughs at the biggest shift in technology in the last decade. Dweeb.

Poor Windows CE (0)

Anonymous Coward | about a year ago | (#44903561)

> Microsoft tried to come up with its own mobile strategy.

Microsoft dropped there existing mobile strategy (of providing fantastic PDAs with mobile phone apps) and pissed off all existing clients by releasing a crappy Android clone.

PDA/Phones then died until Samsung recreated the market with the Note.

Re:Poor Windows CE (4, Insightful)

unixisc (2429386) | about a year ago | (#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.

Re:Poor Windows CE (1)

gl4ss (559668) | about a year ago | (#44904095)

dude. the thing that is wrong with windows phone is that it IS NOT AN ANDROID CLONE.

some aspects of it are androidish, but then you realize that it's in functionality a clone of a j2me featurephone from 2004.

they went from a fully featured mobile os with bad ui to a fully neutered mobile os with an ui fit for a mp3 player concept demo(zune).

were it a full android clone I wouldn't have problems with wp, since then it would be so much more programmable.

Misread Market Badly (4, Insightful)

TrollstonButterbeans (2914995) | about a year ago | (#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:Misread Market Badly (4, Insightful)

BitwizeGHC (145393) | about a year ago | (#44903905)

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.

Re:Misread Market Badly (1)

ilguido (1704434) | about a year ago | (#44903921)

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

Were they ever imaginative and fast to react?

They inherited a monopoly from IBM, they leveraged that monopoly, but outside of the warm, reassuring PC world, that IBM created, they seem to be astray.

Re:Misread Market Badly (1)

marcello_dl (667940) | about a year ago | (#44903981)

I agree 100%, but the issue might be bigger than that: the PC, due to saturation and the advent of FOSS, was beginning to be too mature (read it "too good for the consumer"), so the manufacturers and the software giants have to find something new. If it means saying goodbye to microsoft, fucking up the PC with drm and pushing always connected mobile and a new OS, so be it.

Microsoft as a company is not yet in trouble, as much as I wish they had never existed. They can reinvent themselves and make money again, not by technical merits but by marketing skills.

Re:Misread Market Badly (0)

Anonymous Coward | about a year ago | (#44904427)

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.

Boy, you nailed it. I spent the first 10 years of my career in Microsoft shops, and it is easy to forget there is anything else out there. In reality, in a Microsoft shop you are very much like being in the town in The Village, totally unaware of the larger and more progressive world outside your tiny borders.

"We"? (0)

Anonymous Coward | about a year ago | (#44903593)

On one hand, I was surprised Ballmer admitted fault. On the other, that is a suspicious plural. If the CEO isn't directly responsible for strategic missteps taken by the entire corporation, then who is?

Re:"We"? (2)

hedwards (940851) | about a year ago | (#44903859)

The workers, and they must be punished with layoffs and having their bonuses suspended until they fix the problem of leadership.

What I dont get... (1)

jonwil (467024) | about a year ago | (#44903601)

Is why it makes business sense for Microsoft to be in a market where they have single digit market share and zero prospects of ever being more than a blip compared to Android and iOS.

Microsoft should focus on the things where it is successful including XBOX and Windows and Office.

Re:What I dont get... (2)

DogDude (805747) | about a year ago | (#44903667)

It makes sense because their offering is excellent (most who have used it say "superior", and it's just a matter of time, now. It would be silly for them to walk away at this point.

Re:What I dont get... (1)

Valdrax (32670) | about a year ago | (#44904063)

It makes sense because their offering is excellent (most who have used it say "superior"[).]

This is the first I've heard of that since I don't know anyone with a Windows phone. While I'm unlikely to switch, I'd like to know more. Why is their offering superior?

Re:What I dont get... (1)

ragefan (267937) | about a year ago | (#44904103)

It makes sense because their offering is excellent (most who have used it say "superior", and it's just a matter of time, now. It would be silly for them to walk away at this point.

You know who else thought that... Sony with their BetaMAX product line.

Re:What I dont get... (2)

MightyMartian (840721) | about a year ago | (#44904309)

You're not serious, right? The overwhelming majority of the market has completely ignored it, and from what I can tell, most of its alleged users are paid shills.

Re:What I dont get... (2)

alen (225700) | about a year ago | (#44903681)

because for most people smartphones are taking over the job of windows PC's and more. you can buy a cheapo PC and keep it for many years now where as before you had to upgrade every few years.

same with ipads. you can do almost everything on an ipad that a PC does short of some games and programming.

and they are a threat to the MS Office cash cow.

Re:What I dont get... (1)

somersault (912633) | about a year ago | (#44903835)

Well, I'm not usually one to defend Microsoft, but let's play devil's advocate. If that department is profitable (doubtful right now), then that's a reason to keep it. Even if they're not profitable, MS forced themselves into the games console market, and eventually it started being profitable. I wouldn't say they have zero prospects in the phone business if they actually made a product that stood out as being good. Things can change very quickly in the gadget/tech world. I do kind of wish they'd just become irrelevant and disappear already, but at the same time, competition helps to stop things becoming stale.

Re:What I dont get... (2)

MightyMartian (840721) | about a year ago | (#44904325)

The XBox division is only profitable in the sense that it no longer needs massive cash injections to keep it alive. It is a long ways from paying off the huge outlay of cash that Microsoft made to push it into the market.

Re:What I dont get... (1)

Karlt1 (231423) | about a year ago | (#44904573)

The XBox division is only profitable in the sense that it no longer needs massive cash injections to keep it alive. It is a long ways from paying off the huge outlay of cash that Microsoft made to push it into the market.

And the Entertainment & Devices division includes the Mac Business Unit which is profitable and helps props up the E&D.

Re:What I dont get... (1)

hedwards (940851) | about a year ago | (#44903881)

It makes sense because they previously had a fairly good mobile OS. I had it on my PDA about 10 years back, and it wasn't bad. The problem is that they failed to see the iPhone and Android coming and get a piece of the action.

Also, realize that they had 0% marketshare before the XBox was released, and now they're doing OK. They just missed one of those crucial moments in time with the mobile market and now they might never catch up.

Re:What I dont get... (0)

Anonymous Coward | about a year ago | (#44903883)

Is why it makes business sense for Microsoft to be in a market where they have single digit market share and zero prospects of ever being more than a blip compared to Android and iOS.

Microsoft should focus on the things where it is successful including XBOX and Windows and Office.

Because mobile devices are eating the PC market from the bottom up.

And the PC market is the only place Microsoft makes money.

In other words, without the PC market Microsoft becomes just like whoever the hell it was that made WorkPerfect and Lotus. Roadkill.

Re:What I dont get... (2)

dunezone (899268) | about a year ago | (#44903891)

> Microsoft should focus on the things where it is successful including XBOX and Windows and Office.

Microsoft still focuses on those markets, but it has the resources to step out of the box and try to capitalize in other markets. The problem is that they have failed more than succeeded when trying to enter a new market. They were successful with the Xbox but failed with the Zune and on course to fail with the Windows Phone, and Microsoft Surface.

Now you can enter markets and lose as long as your cash cows (Windows/Office) maintain control and continue to sell. The problem and in my opinion the reason why Ballmer is on his way out is not because of his failure with the Zune/Windows Phone/Microsoft Surface but the failure of Windows Vista and Windows 8. Microsoft has flopped on two of the last three releases of their biggest cash cow.

Re:What I dont get... (0)

Anonymous Coward | about a year ago | (#44904179)

Except that they don't need their own Phone OS to do just this. They could port apps which are the bread and butter profit makers and never touch the OS.

Re:What I dont get... (1)

unixisc (2429386) | about a year ago | (#44903937)

Precisely!!! I've never gotten why they need to be in this market in the first place. And now, to compound things, they're acquiring Nokia, and have more to lose when Windows Phone tanks.

If anything, they could have built a new model around Windows & Office based services - it would seem that there's a lot of cash to be made there.

Re:What I dont get... (4, Insightful)

MightyMartian (840721) | about a year ago | (#44904293)

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.

Don't care (0)

Anonymous Coward | about a year ago | (#44903619)

Irrelevant and on his way out.

Early 2000s (3, Interesting)

kingduct (144865) | about a year ago | (#44903641)

'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."

He referring to the early 2000s when there wasn't a new version of Windows for 6 years?

Re:Early 2000s (1)

jbolden (176878) | about a year ago | (#44904077)

Yes. They were focused on their huge push into the server space extending their OS / Office products way up the value chain.

Re:Early 2000s (1)

asmkm22 (1902712) | about a year ago | (#44904121)

Yeah, that struck me as odd as well. He's trying to make it sound like he's actually owning up to his mistakes by acting like all of their woes stem from decisions made a decade ago. The truth is that his poor decisions were basically made non-stop the entire time.

Re:Early 2000s (1)

jones_supa (887896) | about a year ago | (#44904409)

The modern Windows 6.x core was a big change and improvement over XP. I wouldn't be surprised if it actually took a lot of development resources to build that foundation.

Re:Early 2000s (3, Insightful)

Blakey Rat (99501) | about a year ago | (#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".

I am just tired of Microsoft... (3, Insightful)

bogaboga (793279) | about a year ago | (#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?

Re:I am just tired of Microsoft... (0)

Anonymous Coward | about a year ago | (#44903747)

If "Microsoft" is making you yawn, what is "IBM" or "Apple" doing to you then?

Re:I am just tired of Microsoft... (1)

asmkm22 (1902712) | about a year ago | (#44904165)

I couldn't care less about the name or brand. I just want products that work well. In the IT industry, Microsoft's ecosystem fits that bill, even if they are quite expensive. I'd love for someone else to come along and actually offer competitive products, but that has less to do with not liking Microsoft and more to do with simply wanting competition in the market. I'm really excited about a few Linux options but those are years away from being viable for my clients, based on my testing.

Fundamental differences (4, Insightful)

Todd Knarr (15451) | about a year ago | (#44903649)

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:Fundamental differences (1)

unique_parrot (1964434) | about a year ago | (#44903897)

Exactly.
Apple said we make a new os for a phone, lightwight, battery saving and touch oriented, google said we make something new, lightwight and for slow devices, etc. and finally microsoft says we want to be in the market aswell. but we don't make something new, we use our old base and make it somehow useable on a phone. AND we force our loyal desktop users to use the same s**t."

Anybody ever enjoyed windows8 updates on telephones? no?? let me explain: downloading update (a few minutes, even over wlan), preparing for update (some minutes), restarting and installing (again a few minutes), restarting and making "after updates cleanups"! argh, i am so glad it wasn't my phone! the best thing was: after the hole proccess there was another update, but then i left the tragedy.

Re:Fundamental differences (0)

Anonymous Coward | about a year ago | (#44903913)

I suspect they thought the selling feature would be native PC app integration, however all this did was poison both wells (see Win 8)

Re:Fundamental differences (1)

gl4ss (559668) | about a year ago | (#44904393)

I suspect they thought the selling feature would be native PC app integration, however all this did was poison both wells (see Win 8)

huh? windows phone does no such thing.

in fact, you could port+compile putty over to windows mobile quite easily. but not for windows phone!

Re:Fundamental differences (2)

Todd Knarr (15451) | about a year ago | (#44904407)

That's their latest attempt to dig themselves out of the hole. But it's the same mistake they made at the beginning, only reversed: instead of making a phone that works like a desktop, they're trying to make desktops work like phones. At this point they can't fail to get the idea that people don't use phones the same way they use desktops, so I can't write this one off to just them being clueless.

The big whiff is another 25 million for Elop (0)

dbIII (701233) | about a year ago | (#44903659)

Smells like corruption.

Re:The big whiff is another 25 million for Elop (0)

Anonymous Coward | about a year ago | (#44903739)

There ain't nothin' more powerful than the odor of mendacity!

Even the great ones whiff (2)

themushroom (197365) | about a year ago | (#44903763)

There's a long history of businesses saying "nah, not going that way" then finding out they made the wrong choice and missed the boat. Good that Ballmer admits what everyone has known for a long time regarding being late to the smartphone party, how can he not?

Funny he should take a poke at Google since Bing is... uh, Bing... but to MSFT's credit they took up the mantle to challenge Google at search engine technology. They could have very well said "nah, it's been done, look Yahoo and Alta Vista, ad infinitum, there's no meat on the bone" and left it alone. Which, in many opinions, wouldn't have been that bad a thing to pass on since, well, Bing -- but it's still a revenue stream despite quality. MSFT can't always buy a winner when they can't make a winner.

He who smelt it (0)

Anonymous Coward | about a year ago | (#44903777)

Instead of the pot calling the kettle black, maybe it is "takes one to know one"?

Regrets? He's had a few (0)

Anonymous Coward | about a year ago | (#44903807)

But then again, too numerous to mention.

wrooooong (1)

slashmydots (2189826) | about a year ago | (#44903827)

Stay the **** off my phone, it's Windows 8 that should be his biggest regret. As for Windows on my phone, didn't want it, don't need it.

The iPhone has never had majority market share (1)

tuppe666 (904118) | about a year ago | (#44903889)

Memories fade, but the comments Steve made about the iPhone, where about his misunderstanding that the iPhone as a "consumer product" at stupidly high prices. The iPhone only flourished through the high subsidy model in America (to maintain lock-in to carriers) and some parts of Europe. Leaving them with a model that gives them 40% in America, a third of Europe and no sales anywhere else (A kind description).

He also overestimated the importance of a keyboard...because of email (in business) on a phone, without understanding the trade-off. The trade-off against apps was something that did not exist, and was not planned by Apple, in fact looked down upon by Jobs.

The real irony of the interview is his inability to reflect on his mistakes, decided to chase Apple in the American market with a keyboard-less tasteless clone. Rather have a every price range; optional keyboard; world phone. It was a strategy which cost Microsoft 10% market share and Nokia 40%. The sad fact is the limited success with the windows phone is on its bottom end phones, out of America.

This is bullshit (5, Interesting)

TheSkepticalOptimist (898384) | about a year ago | (#44903929)

This is a cop out statement if I ever heard of one.

Just Wiki http://en.wikipedia.org/wiki/Windows_Mobile#Windows_Mobile_2003 [wikipedia.org]

And you will see that at one point Microsoft had 41% of the "smartphone" market at the time. Their only major competitor was RIM.

I mean Microsoft defined "smartphone", their phones allowed you to run apps, games and multimedia and was the natural evolution of Windows Pocket PC which was also a major player in the early 2000's.

To say that Microsoft did not invest talent into mobile devices and phones in the early 2000 is pure, unadulterated bullshit.

Yes, iPhone was a disruptor in the market, but Ballmer simply turned over and gave up on Windows Mobile products. It was 100% his own incompetence as a CEO to maintain a product that had, at one time, a major segment of the market.

Its like Ballmer is trying to make it sound like he just didn't see the potential for Microsoft to capitalize on phones and was too focused on desktops, and not the bigger reality that Ballmer is just incompetent as a CEO for letting a product that once defined the market at the time slip into irrelevance.

Ballmer the Blamer, this is going to define him as he wraps up his days at Microsoft.

Re:This is bullshit (1)

MightyMartian (840721) | about a year ago | (#44904421)

When MS was any kind of notable player in the smartphone/smart device marketplace, it was an incredibly small marketplace. Honestly, other than perhaps acting as some sort of inspiration for Apple, I don't think it had substantial influence on what came later. And frankly, I think the Blackberry was probably a much larger inspiration.

Ultimately, Apple learned a lot of useful lessons from the monster success that was the original iPod, and then saw how those lessons could be applied to a smartphone. RIM and Microsoft released mobile offerings that were functional, could run a wide variety of software, and certainly had some penetration in the enterprise, but Apple made sure iOS wasn't just a business workhorse (in fact, I see little evidence that it gave a damn about the enterprise at all), but rather a very consumer friendly device and then marketed it with astonishing brilliance. But at the end of the day, Apple's success with iOS is down to the original iPod. It gained its killer product, and built the iPhone and the iPad on the same premise.

other reasons (1)

stenvar (2789879) | about a year ago | (#44904439)

Windows Mobile failed for other reasons too, reasons that are typical of Microsoft. Windows Mobile had good technology, but the user interface was iffy and software quality was spotty. APIs and strategies kept changing as different groups inside Microsoft jostled for dominance. Windows Mobile tried to tie people to the Microsoft "ecosystem" and integrate with their desktop, but that integration was poor. And third party developers could fix none of this for them because they kept large parts proprietary and closed. I think you even had to get special permission from Microsoft to sync with their devices. Even if you sacrificed your kids to Ballmer, gave up any sense of self-respect, and bought an all Microsoft solution (desktop, phone, Outlook), you still ended up with a slow and crappy solution. That's why Windows Mobile failed.

what this really means (1)

goffster (1104287) | about a year ago | (#44903931)

"and expressed regret over his company's inability to capitalize on burgeoning interest in mobile devices"

should read

"and expressed regret over his inability to capitalize on burgeoning interest in mobile devices"

or perhaps even

"and expressed regret over his inability to capitalize on burgeoning interest in anything"

Re:what this really means (1)

stenvar (2789879) | about a year ago | (#44904453)

Why so windy? Why not

"and expressed regret over his own incompetence"

Destroy Google+Search (1)

tuppe666 (904118) | about a year ago | (#44904025)

I have always found it astonishing about Microsofts Hard on for search, maybe that incident involving "Destroy Google"; chair throwing is understated, Maybe Ballmer never recovered. Google clearly are aware that search is just one portal on the internet, and real threats are Facebook and Amazon, and has strategies against them, and (limited?) success against them has been hard won. Yet Microsoft have *nothing* in these spaces,

It's exactly where they should be (4, Insightful)

transporter_ii (986545) | about a year ago | (#44904039)

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.

Flushing billions away... (0)

Anonymous Coward | about a year ago | (#44904281)

The phone market is another segment where Microsoft dropped the ball. Rather than truly innovating---which they were in a position to do---they rested on their butts and watched the market take off.

Ever since their peak in the 90s Microsoft has just been reacting to new technologies and markets---never have they been a leader or innovator even though they have the resources to be one.

XBox, Windows Phone, Bing, Zune---all situations where Microsoft was behind the curve and ended up flushing billions away trying to catch up or simply compete...

Something tells me there will be other projects that will meet the same fate as Zune...

Re:Flushing billions away... (1)

erroneus (253617) | about a year ago | (#44904621)

Yes, they always thought they could buy their way into a market. Someone has a great idea? "Hey, be a Microsoft 'Partner!' and get cheated out of what you created." There are way too many examples of that crap happening... and I can't believe Orange is STILL working with Microsoft after getting screwed so hard.

Branding problem (3, Interesting)

Larry_Dillon (20347) | about a year ago | (#44904331)

I think a huge part of their problem is with branding. Apple and Android are seen as cool and sexy whereas Microsoft is perceived as uncool and business-oriented. XBox is the only exception I can think of. The exact same hardware, delivered by a cool, edgy start-up, could have done much better.

To be fair, I haven't even touched a Windows phone, but my perception is that it's going to try to lock you into MS offerings (Apple does this too) and it will try and keep you from doing cool things if that doesn't somehow make money for MS.

Is this really true, is this just my perception, or is this the general perception? Bear in mind that first-hand experience (reality) has nothing to do with the perception of those that haven't touched it.

Re:Branding problem (0)

Anonymous Coward | about a year ago | (#44904455)

You have to remember that Microsoft has a bad reputation in addition to being "business oriented". Consumers think Viruses, patch problems, reloading Operating systems, random crashes and failures, etc.. when they think of Microsoft. Compared to Apple which just works all the time and very easy at a price, or Google with their "works most of the time very well" with less cost and it's an easy decision for consumers.

whiffed? More than just smartphones... (1)

geekprime (969454) | about a year ago | (#44904473)

Mp3 players,
Smartphones,
tablets.

Three strikes and you are out Balmer...

Re:whiffed? More than just smartphones... (1)

geekprime (969454) | about a year ago | (#44904507)

And I totally forgot about bing, so that's 4 strikes.

Maybe they just don't know? (5, Interesting)

erroneus (253617) | about a year ago | (#44904571)

The world basically hates Microsoft. There are tons of reasons for it, but when it comes to new computing devices (that is to say, non-PCs) they do NOT want Microsoft running it because of their horrible experience with Microsoft stuff. It's a discussion which would last until the end of time as to what and who is to blame if the people's experiences were caused by others people and that it's not Microsoft's fault or even if it's just perception which is no longer valid. It doesn't matter. It's like the stock market -- it is what people believe it is and that's the end of the story.

So when given a choice, people choose "not Microsoft." Not so much that they choose Android or Apple of whatever. It's that they voted "not Microsoft." And I think that says more than enough in a completely clear and understandable way. However, has Microsoft paid any mind to this problem? Have they worked to reverse those problems at all? Once again, opinions will vary, but I'm saying NO. No visible effort at attempting to win the hearts and minds of the users. They already have dominance and all their effort was, in my opinion, coasting and doing just enough to maintain and take advantage of their dominance.

To this day, one example of Microsoft hubris sticks in my mind the strongest and I just can't get beyond it. Microsoft one day changed their volume licenses of Windows to "upgrade only." This enabled them to sell two copies of Windows for each computer sold. A business who wanted to save money on licensing used to buy enough seats for their users and that was it. But Microsoft just changed the license terms and said "you have to have Windows in order to qualify to use your volume licensed images." When I learned about that, I was just furious. No longer can we save money by telling Dell, "no OS... we'll take care of it." Sell it twice and use it once. Come on!!!

Not only did they lose the good will of the end users who hate Microsoft for speed, usability and stability reasons, they started taking advantage of the businesses who are their primary source of money.

So when people have a choice, choosing "not Microsoft" seems like a rational choice.

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