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The Windows Mobile era took a heavy toll on Microsoft's mobile efforts

In a new candid interview with CBS Corp.'s (CBS) titular station, Microsoft Corp. (MSFT) co-founder and famed philanthropist Bill Gates discusses his former company's struggles in the mobile era.  Microsoft today accounts for less than 5 percent of the smartphone market, according to most estimates.

For a time, Microsoft held nearly a quarter of the fledgling smartphone market (circa 2004).  But it failed to keep up with rivals like Google Inc. (GOOG) and Apple, Inc. (AAPL), sticking for years with the increasingly dated Windows Mobile platform.  In November 2010, Microsoft launched a new operating system, Windows Phone, which was ambitious but lacked strong third-party hardware support.  Today Microsoft is still struggling to sell the market on its latest mobile OS -- Windows Phone 8.

Bill Gates in the interview calls Microsoft's former cellphone strategy "clearly a mistake", remarking, "There's a lot of things like cellphones where we didn't get out in the lead early.  We didn't miss cellphones, but the way that we went about it didn't allow us to get the leadership."

The tech icon says that both he and current CEO (and close friend) Steve Ballmer are both incredibly "self-critical".  He comments, "He [Ballmer] and I are not satisfied that in terms of breakthrough things that we're doing everything possible."

Steve Ballmer
Steve Ballmer's company has struggled in the mobile era, since Mr. Gates' retirement.
[Image Source: SFGate]

Mr. Gates expressed confidence, though, that it's not too late for Microsoft to claw its way to a significant mobile market share.  He's a big fan of Windows 8 and Microsoft's Surface tablet.

Microsoft is reportedly aiming to unify the Windows and Windows Phone platforms under one consistent set of mostly overlapping APIs and user interface themes, to allow users to feel more comfortable with both form factors, and to help developers save time deploying cross-platform apps.  The first unified release, Windows Blue, may land late this summer.

The revisions are also accompanied with some big leadership change.  Windows President Steven Sinofsky was driven out and new rising stars are taking his place at the company.  Some investors have called on CEO Ballmer to step down, but for now Mr. Ballmer is hanging tight in the top spot, vocal as ever.

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RE: Windows 8 Phone is great
By Tony Swash on 2/19/2013 1:14:14 PM , Rating: 0
The reasons for this are unimportant here (e.g. pirating, lots of third-world Android user with low-end phones etc.)

But the delta between the Android installed base and the iOS installed base gets bigger (452 Million Android phones vs. 136 Million iPhones sold in 2012).

So, as this delta gets bigger, obviously the delta regarding App Store revenue gets smaller.

So as long as Android outgrows iOS, it gets more and more interesting for developers.

OK. So lets take the generally agreed current figure of four time developer revenue for iOS than Android and convert that into revenue per user (actually it's more than that because there are already more Android users than iOS users but let's be conservative). So it takes four Android users on average to equal one iOS for developers.

Android is increasing in total unit sales and iOS is increasing in units sales, albeit at a slower pace. At what point does Android achieve four times the installed base of iOS? I'm not sure - I just don't have the data - but iOS unit sales will probably double again before Android reaches four times it's installed base. So Apple as a business will probably double in size before Android even just reaches parity in developer revenue.

In order for Android to become a significantly better sales target to developers, so much better that there is a discernible advantage in software for Android over iOS, it would probable have to be pulling in double the revenues of iOS so it would need eight times the number of users and quite a bit more time to reach that ratio, and of course iOS would keep on growing in the meantime. iOS is at 400 million users right now and within 18 to 24 months will probably be getting towards a billion users. That means in order to generate just twice as much developer revenue Android would have to have an installed base of 8 billion users.

I think you can see the mountain that Android has to climb in order to be a significantly more attractive platform for developers than iOS.

As I said there are other metrics of platform performance beyond software developers, web commerce rates are currently nine to one in iOS favour for example meaning that Android would have to outsell iOS by tens times just to be an equal web commerce platform.

The mobile device market is not the PC market :)

RE: Windows 8 Phone is great
By karlostomy on 2/20/2013 4:07:44 AM , Rating: 3

So, all I did was point out that ios is getting pummelled by Android in marketshare growth and installed userbase.

1 day later, Tony has provided us with 1100 words carefully concocting a story about how and why this is a bad thing for the Android ecosystem.


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