3 Steve Ballmer Quotes That Explain Why Microsoft's Mobile Effort Failed

There's a reason Microsoft's (NASDAQ: MSFT  ) CEO Steve Ballmer is stepping down. The tech giant, once quite possibly the most powerful company on the planet, has fallen by the wayside -- still relevant, but increasingly less so. The rise of mobile devices, tablets, and smartphones powered by Google's (NASDAQ: GOOGL  ) Android and Apple's (NASDAQ: AAPL  ) iOS have weighed on the demand for traditional Windows PCs.

Ballmer has made a fair amount of gaffes over the years, but three in particular stand out. Taken in context, they explain exactly why Microsoft lost its operating system monopoly.

Ballmer on the iPhone: 

$500, fully subsidized with a plan?!... That is the most expensive phone in the world, and it doesn't appeal to business customers because it doesn't have a keyboard.

Perhaps nothing was more detrimental to Microsoft's mobile effort than Ballmer's lack of vision. At launch, the iPhone was expensive, and its lack of physical keyboard broke with the industry norm. Yet that didn't stop it from catching on -- including among business users, much to the chagrin of rival BlackBerry.

Ultimately, Microsoft would go on to copy Apple's iPhone operating system with Windows Phone 7, and then 8, but by then, it was too late. Today, Microsoft has about 4% of the worldwide smartphone market -- and that's up significantly from last year. Meanwhile, Apple has 13% of the market, but the iPhone accounts for more than 40% of the smartphones sold in the U.S.

Microsoft isn't giving up on smartphones. In fact, by buying Nokia's handset business, Microsoft is taking its Apple mimicry to the next level, moving to make its handsets in-house. Perhaps Microsoft will catch up, but I doubt it -- now six years behind Apple, the company lacks the robust ecosystem  and market momentum enjoyed by its competitor.

Ballmer on Google's Android:  

It is very hard to be excited... about the Android phones. Apple is a good competitor, different kind of competitor.

Ballmer's take on Android was equally as dismissive. By this point, he was forced to recognize Apple as a legitimate threat, but chose to deride Android as a confusing mess. During that interview, Ballmer asserted that you had to be a "computer scientist" to use a phone running Google's operating system.

Evidently, there are lot of computer scientists out there. Android now accounts for 79% of the smartphones sold worldwide, and it's particularly popular in emerging markets like China and India.

Ironically, it was Google that took a page out of Microsoft's playbook -- like Windows and the traditional PC, Google lets a variety of hardware manufacturers produce Android devices. That's resulted in Android handsets of every shape and size, available at nearly any price point. Along with that variety has come market share dominance.

Ballmer on who's important: 

Developers! Developers! Developers!

Perhaps Ballmer's most famous quote of all helps to explain precisely why Windows Phone is struggling: It has no developers.

As Ballmer understood when he uttered those words years ago, an operating system is only as good as the applications that run on it -- for so many years, Windows was dominant because it had all the developer support in the world. A given application might not run on a Mac or Linux machine, but it almost assuredly would work on a Windows computer.

The reverse can be said for Windows Phone. Microsoft's handset operating system continues to lack many major apps, including Instagram, Flipboard, and HBO Go. In time, these apps may see a Windows Phone release, but the companies behind them aren't likely to spend too much time supporting Microsoft's platform.

Moreover, any new hit apps that happen to emerge -- like a new game or social network -- probably won't see a Windows Phone release for months, if ever. Prospective Windows Phone buyers must accept that the apps available to them will be very limited, which is likely why not many people buy Windows Phones.

Microsoft's Windows business is slipping away
PC sales data has been terrible all year. Most recently, research firm Gartner reported that PC shipments fell 8.6% in the third quarter -- the sixth consecutive drop on record. While traditional Windows PCs won't disappear overnight, it's clear that mobile devices are taking a toll on them.

Microsoft's failure to capitalize on these trends can be traced back to Steve Ballmer. His inability to appreciate Apple's iPhone, understand the appeal of Google's Android, or remember the importance of developers doomed Microsoft's mobile phone effort.

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Read/Post Comments (8) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 12, 2013, at 12:31 AM, nudnyk wrote:

    I guess you could not find a quote by Ballmer admitting that Windows is chicken droppings, MS is still trying to get it right, MS should go back to dos the one thing they had right.

  • Report this Comment On October 12, 2013, at 1:28 AM, sniperboy wrote:

    I don't know who's articles are worse BGR or these MFers. All they produce are worthless click articles which yahoo pushes as news.

  • Report this Comment On October 12, 2013, at 1:51 AM, whsteffan wrote:

    Sam Mattera ?

    nuther one of the fools clowns pontificating about Microsoft mistakes as tho he knows more about Microsoft than Steve Balmer--

    If you think that Microsoft is sitting on their duff and not preparing to steal the entire mobile market just like they did with the desktop, the cloud, gaming, Office, etc etc then you can claim the title of fool as well as clown

  • Report this Comment On October 12, 2013, at 2:04 AM, ihussaini wrote:

    Ballmer is an awesome salesman. They should have made him head up marketing. The man had energy and a drivel to sell. Microsoft is failing because they are putting the right people in the wrong places.

  • Report this Comment On October 12, 2013, at 3:09 AM, ryanchandler25 wrote:

    Normally I don't agree with many fool articles, but this one is spot on. Ballmer would be the perfect CEO for a mature industry that rarely changes, like a food company.

    He is basically a yes man, lacking any sort of vision about the future. In every segment that they operate, with the exception of their desktop operating system, they lag the competition and are playing a desperate game of catch up.

  • Report this Comment On October 12, 2013, at 4:48 AM, fpl1954 wrote:

    I have owned all three.

    Apple is the worst performer in all categories and most costly to buy, but APPs are almost free and the phone integrates with laptops and other phones almost automatically and is very easy to use.

    Android outperforms Apple and you can find a phone price to fit your budget. APPs are as cheap as Apple but integration with laptops and other phones takes some tech knowledge and effort. Also, the APPs tend to have widely varying interface models, making it harder to use.

    Windows far outperforms Apple and Android, four times the battery life of Apple, the phones are mostly affordable, and APPs are very cheap, both of them. Although very easy to use, you better like whatever APPs you get with it, and typical of Microsoft the phone doesn't work well with anything else, not even stuff made by Microsoft.

    Bottom line, Microsoft makes the best phone and software, and I'll take an IPHONE please.

  • Report this Comment On October 12, 2013, at 9:17 AM, bhart2408 wrote:

    Love my windows phone

  • Report this Comment On October 16, 2013, at 8:53 AM, LeeGriffithsUoS wrote:

    Poor article and exactly the reason why people think ios and android are better - i.e because there's an unqualified opinion at work.

    Popularity of the various devices and platforms has little do with the technology but more to do with being in vogue. Nokia were on top of the world in Matrix times, but fell victim of better marketing elsewhere.

    Microsoft were late to the game with a iPhone competitor (remember they made smartphone tech long before Apple) and their marketing is lousy but they have a big hill to climb. I think Apple is running out of ideas - they seem to just stick different badges on their kit these days and claim it to be a new product.

    BTW, if you have ever developed for the mobile platforms you would find that Windows Phone with Visual Studio is by far the best over all, most powerful (now) native API, easiest, quickest, etc. Shame no-one bought the phone.

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