Bill Gates admits Microsoft made "a mistake" in the smartphone business

Microsoft Chairman Bill Gates is continuing his media blitz that is primarily about generating awareness of his work with the Bill and Melinda Gates Foundation. Today, in a new interview that was shown on the CBS This Morning program, Gates not only talked about his massive charity work but Microsoft-related themes as well.

Gates admitted to interviewer Charlie Rose that in terms of the smartphone industry, Microsoft did not "get out in the lead very early." When asked why this was the case by Rose, Gates dodged the question, saying that the question was too complicated to answer. He did admit, "We didn't miss cell phones, but the way that we went about it didn't allow us to get the leadership. So it's clearly a mistake."

When asked by Rose if he has been satisfied with the leadership of Microsoft's CEO Steve Ballmer, Gates says that both he and Ballmer are highly critical of themselves. While Gates said that Ballmer's leadership of the company has lead Microsoft to launch products such as Windows 8, the Surface and more, he said, "But is -- is it enough? No, he and I are not satisfied that in terms of, you know, breakthrough things, that we're doing everything possible."

Gates also admits that he likes his sleep, and said he's not one of these people who can get by with four hours of sleep, but still has a tendency to stay up at night reading, which can be an issue if his has a morning appointment.

Source: CBS This Morning

Report a problem with article
Previous Story

5.5 inch LG Optimus G Pro announced; coming to US in Q2 2013

Next Story

128 GB Microsoft Surface Pro is fourth in tablet sales on Best Buy

46 Comments

Commenting is disabled on this article.

I have a Windows Mobile Phone, made before android and iOS to appear. It was perfect, but later they ruined it especially with 6.5 and 7 versions. It's funny to see that Windows Phoen 8 comes back with some "new" functions wich were already available in Windows Mobile 6.0 and 6.1 but removed later. just as example - SD card support.

I think the mistake they made was to go from one extreme to the next, they went from apple -50 to apple +100, plus they screwed their customers 2 times just like in the saying "if I go with you once shame on you if I go with you again shame on me" and if I go with you again then I'm crazy. They could have gone the happy middle like Android and be where android is now.

Admitting a mistake is the first step in the healing/correction process. Now, Microsoft needs to admit they make several big mistakes with Windows-8 and its Metro Interface with NO option for users to not use it. [Remember, non touch-centric devices are still, by far, the most form factor for personal computers.]

TsarNikky said,
Admitting a mistake is the first step in the healing/correction process. Now, Microsoft needs to admit they make several big mistakes with Windows-8 and its Metro Interface with NO option for users to not use it. [Remember, non touch-centric devices are still, by far, the most form factor for personal computers.]

Some of the design principles of Metro translate nicely to the desktop environment. Outlook (hotmail) for example looks very nice in modern UI.

I think Microsoft needs to add a switch to the option menu that resizes the UI to fit large non-touch screens. But I dont think Microsoft needs to see Metro as a big mistake. It is the first time there is a design philosophy behind Microsoft's products. Best yet, its the exact opposite of how Apple is designing their products.

I love that these two big companies are trying out too very different designs. While Android is now looking like a mix of both. It started out as an iOS copy but the current icons and typography is looking a lot like Windows Phone. Especially when Sense5 skin on top of it.

Let see, MS let Windows Mobile go on for FAR to long. Then they tried the KIN phone, which bombed soon after release. Then they released WP7 phones and shortly after announced WP8 and that all/most of the existing WP7 devices will not be able to have Windows 8 installed.

So yea, MS is late to the game, had/have issues, but I wouldnt count them out.

The answer to why MS didn't get "in the lead" early was that Microsoft simply had a different idea than what ended up being the most popular form of smartphones. Microsoft certainly wasn't late to the game - they were actually pretty early with Windows Mobile. Reorganizing this mobile effort took time though, and that's why they ended up competing only pretty "late".

Northgrove said,
The answer to why MS didn't get "in the lead" early was that Microsoft simply had a different idea than what ended up being the most popular form of smartphones. Microsoft certainly wasn't late to the game - they were actually pretty early with Windows Mobile. Reorganizing this mobile effort took time though, and that's why they ended up competing only pretty "late".

They were late to see Smartphones are true computers. They thought it was nice to have a mobile version of Windows but they never considered it an important market and they neve r felt they had to compete with BlackBerry. As a result Windows Mobile 5 and 6 were very outdated.

And that was exactly the time when consumers were ready to embrace smartphones and when Apple took over. For many people their smartphone is their primary computer. They do 90% of all their computer activities on it. Which makes their Windows computer used rarely. They've now invested in another ecosystem, resulting into a customer that might be lost forever.

So I compleetly understand why Microsoft is now focussing on touch and giving Windows a marketplace. They've made huge mistakes and this is the minimum they need to do in order to make sure there is a future for them on the consumer market. And if their failure does lead to them losing the consumer market then the business market will quickly follow (especially with webapps making iPads useful for productivity).

Ronnet said,

They were late to see Smartphones are true computers. They thought it was nice to have a mobile version of Windows but they never considered it an important market and they neve r felt they had to compete with BlackBerry. As a result Windows Mobile 5 and 6 were very outdated.

And that was exactly the time when consumers were ready to embrace smartphones and when Apple took over. For many people their smartphone is their primary computer. They do 90% of all their computer activities on it. Which makes their Windows computer used rarely. They've now invested in another ecosystem, resulting into a customer that might be lost forever.

So I compleetly understand why Microsoft is now focussing on touch and giving Windows a marketplace. They've made huge mistakes and this is the minimum they need to do in order to make sure there is a future for them on the consumer market. And if their failure does lead to them losing the consumer market then the business market will quickly follow (especially with webapps making iPads useful for productivity).

I completely disagree: MS was the first company to envision a device,that,was a phone and a computer. I have used MS powered smartphone since the Motorola MPX 200 and they were great devices. Where MS failed was because, and I would add incredibly, they made the same mistake Palm did, btw a mistake that allowed MS to dethrone Palm and becomes the King of the PDA market; with WM they achieved almost 50% of the market.... and then stopped pushing and innovating. WM 5 successor, code named Photon, was under development before,the iPhone was released, MS failed to understand the disruptive potential and the change in consumer habits that the Apple device brought on the market, when they did they decided,to abandon Photon and start from,scratch. If you want a move similar to what they did with Longhorn. Unfortunately for MS the dynamics behind the mobile market are different than the ones behind regular PCs, or at least the differences were more accentuated years ago, and the gambit backfired.
As for WM 6/6.5 the OS, as Ballmer himself admitted, was a stopgap while the next OS was developed. Personally I always found MS " honeycomb" paradigm more intriguing that Apple one but this is a matter of personal preferences. I also believe that the functionalities, the power and the flexibility of WM 6.5 are still unbeaten both by WP8 devices and iPhone; I never owned an Android device therefore I cannot compare or comment about it. Right now I have a Lumia 920 and I plan to wait and see what Blue will bring on the table but, being an agnostic, I will also check what the competition will have when in October I plan to replace my actual device.

i like how everyone blames microsoft when certain apps are missing and not the app devs themselves. also Unity shall be coming to windows phone in an upcoming update which will open up many game oppurtunities

logicwin said,
i like how everyone blames microsoft when certain apps are missing and not the app devs themselves.

I like how everyone blames app devs when microsoft has no marketshare for Windows Phail 8

bguy_1986 said,
I blame them because they said it was coming....

Those apps are comming as the developers committed to them. They are however painfully slow because they dont really care for Windows Phone. I'm sure many of them want to see it fail. Most developers prefer iOS and they do Android simply because it is the major OS.

Ronnet said,

Those apps are comming as the developers committed to them. They are however painfully slow because they dont really care for Windows Phone. I'm sure many of them want to see it fail. Most developers prefer iOS and they do Android simply because it is the major OS.

Developers, the intelligent ones at least, go where the money is.....
I,do not see a conspiracy to kill WP honestly.

bguy_1986 said,
They continue to make mistakes... no update for the terrible xbox music app?! No pandora and others for windows phone!?

I agree. Apple and Google did a good job on focusing on whats important to users:

1. Apps: Its interesting to see Microsoft is a software company and have problem Collecting critical applications. (there shouldn't be more than 100). Pandora or Instagram are not heavy duty apps (at least doesn't seem to be) but after 2 years introducing the first set of Windows Phone they are still missing. WTF.
2. Fast and flawless browser (They could at least re-brand IE avoiding its bad reputation)
3. Playing Music on your phone on the go. (This is where just re-branding doesn't work) I like the way they got rid of Zune software which was a pain in the neck but XBoX Music App even on Windows 8 is slow and clunky
4. Games: Its interesting that Microsoft with XBoX name and all they software resources and power is falling behing Apple and even Android with Linux kernel which was never meant to be for games.
5. Navigation: Using Nokia Maps was a good move, still there are performance issues which I am sure for Microsoft with all their resources is an easy thing to fix.
6. Improving Services: Just like Google the big selling point for them is to make people dependent on their services. Microsoft Can easily address that. I think they already made a good move for Outlook and Skydrive Service. but there are few services that Microsoft Simply doesn't offer such as Google Reader, Books and Magazines ...
7. Voice Command: Its funny again to see the Microsoft was the creator of Voice Command and NUI on mobile devices and falling behind everybody else with a large gap. Apple's Siri and Google now have a way better experience than TellMe.

I Hope Microsoft Lisen to these feedbacks

bguy_1986 said,
They continue to make mistakes... no update the terrible xbox music app?! No pandora and others for windows phone!?

You're spot on, unfortunately I gave up with my windows 8 phone as much a I didn't want to

bguy_1986 said,
They continue to make mistakes... no update for the terrible xbox music app?! No pandora and others for windows phone!?

The Xbox Music app on the phone is great.. it's the Windows 8 version that sucks. Also, they can't force companies to make apps. Pandora is already on it's way. But other apps your referring to, blame those companies.

Unfortunately, I don't know how Windows Phone has differentiated itself in any way from the competition except with its UI. Android is open and cheap. iPhone has a huge app library from it being the first. Blackberry has business appeal. What does Windows Phone have?

As soon as they figure that out, they'll be good to go.

Well.. they have business appeal. WP7 and 8 comes with Office + OneNote. WP8 supports 128-bit bitlocker encryption and secure boot. Skype is deeply integrated. There's of course exchange support, integrated skydrive, office 365 and sharepoint support. As a big bonus, MSR releases some great apps too.. And I'm sure I've seen a SQL server, my server and some server monitoring apps.

billyea said,
Unfortunately, I don't know how Windows Phone has differentiated itself in any way from the competition except with its UI. Android is open and cheap. iPhone has a huge app library from it being the first. Blackberry has business appeal. What does Windows Phone have?

As soon as they figure that out, they'll be good to go.

Personally I think the best thing they could do is make a phone with similar specs to the Galaxy, iPhone, and other top-end phones, and simply undercut the price by half or something. To most people, a phone is a phone, but money definitely talks.

The question would be whether it's financially possible, which it probably is not.

billyea said,
Unfortunately, I don't know how Windows Phone has differentiated itself in any way from the competition except with its UI. Android is open and cheap. iPhone has a huge app library from it being the first. Blackberry has business appeal. What does Windows Phone have?

As soon as they figure that out, they'll be good to go.

- A function-based UI (instead of app-based)
- Easier to understand (partly due to it being function-based)
- Faster to use (partly due to it being function-based)
- Live tiles (making the interface come alive like never before)
- Cheap devices that remain fast and smooth (the sweatspot between crapdroid and iFortune)
- Same core as Windows 8 (great for apps and businesses)
- In the same ecosystem as Windows 8

They made a mistake in mobile, they didn't see touch computing becoming the defacto standard and felt stylus would be the preferred method. Then when the iphone came out they felt it would never gain traction without seeing how easy it was to use; only looking at initial price point and not considering that over time prices come down. It took them years to build a proper mobile OS, had they come to market before android they would be the top mobile provider right now, they simply waited too long. However things change rapidly and if they can get their act together (which they haven't yet) then they can get back on the mobile as top dog - that requires them to release updates more frequently. Some basic things in windows phone 8 are still missing - vpn, a missing game api for entry level developers (xna is pretty much dead), volume profiles, application management. I have a lumia 920 and love it but I don't see the rapid releases that they need - they should be releasing updates once per month not once every 4-5 months. Also they were supposed to have some program in place allowing end-users to get updates without carrier approval - would void warranty but would still allow users to get the updates - what happened with that?

First, iPhone was not even close to the first pure touch based phone.

Secondly VPN isn't a basic thing for a phone. Not for a basic user at least.

alwaysonacoffebreak said,
First, iPhone was not even close to the first pure touch based phone.

Secondly VPN isn't a basic thing for a phone. Not for a basic user at least.

For the average user no - but for the business user it is; windows is typically a business oriented operating system on the desktop; so it would be understandable that windows phone os would be too.....

iphone is ****, I'm not here to tout it as the pinnacle of anything, however it was the first touch based OS that became really popular. I used windows mobile from 5-6.5 and there were a few touch implementations but they were very crude.

the point is wp8 should be excelling at features that other OS's don't have, whereas they still are not feature competitive with android or ios. It's going to take more time to catch up, the OS is really fluid and works great today that's for sure - I use it but they need to surpass the competition not keep trying to catch up if they want to gain any traction.

Things like kids corner is a really great feature, the live tiles - great feature, the fluidity of the OS, stability, performance - all great.

Things like xbox music - garbage, xbox videos cant be downloaded - garbage, Skype app - still garbage. they need to update many of their own apps as well - the weather app is very basic, the stocks app - basic, the phone app - should be able to block calls/blocking list (not added yet or if even will).

Only thing is MS isn't pushing for the corporate market.

First touch based OS that became popular? I'm sorry what are you on about? iOS came in 7 years later than Symbian with it's lineup of full touch based phones and if you're going to tell me that Symbian wasn't an "popular" OS then don't expect an reply from me anymore. Back then Symbian was ahead of everything, in some ways it's ahead of others even this day.

I'm glad he knows this. They have an EXCELLENT and unique phone OS, but because they were late to the game, they have to make a MAJOR impact in order for it to succeed. It's difficult in an industry where people are brainwashed with iEverything and Andrones.

j2006 said,
It's difficult in an industry where people are brainwashed with iEverything and Andrones.

Since when does liking a particular OS mean the user is brainwashed?
Care to provide us with a witty Windows Phone persona?

j2006 said,
I'm glad he knows this. They have an EXCELLENT and unique phone OS, but because they were late to the game, they have to make a MAJOR impact in order for it to succeed. It's difficult in an industry where people are brainwashed with iEverything and Andrones.

Everyone is stupid but you right?

Astra.Xtreme said,

Since when does liking a particular OS mean the user is brainwashed?
Care to provide us with a witty Windows Phone persona?


Majesticmerc said,

Everyone is stupid but you right?


That's the thing... many of those users DON'T 'like' that particular OS (and trust me I know lots). They just give in to it because everyone else is. Hence why I said 'brainwashed'. I'm not saying they are stupid, I'm saying that's how our society has become (i.e. many people have something, so I must get that too... rather than doing research and comparing themselves). People are afraid to do their own things. It's becoming increasingly difficult for companies to get into industries, because no matter how much marketing they do, people tend to do what the majority do.

Astra.Xtreme said,

Since when does liking a particular OS mean the user is brainwashed?
Care to provide us with a witty Windows Phone persona?

The moment they become 'fans' or worse 'fanboys' is the moment they are brainwashed. At that point they'll start to defend or worse promote their OS of choice. They refuse to even consider another OS. There are a lot of people like this.

So there is a certain point where the market is saturated and there are few opportunities to make fans that hordes of brainwashed fans are making it hard to breakthrough something new even if its a fresh functional take on an old concept.

j2006 said,
I'm glad he knows this. They have an EXCELLENT and unique phone OS, but because they were late to the game, they have to make a MAJOR impact in order for it to succeed. It's difficult in an industry where people are brainwashed with iEverything and Andrones.

Sounds like somebody's mad bcuz NO APPS

Waaaahhhhhh

j2006 said,

That's the thing... many of those users DON'T 'like' that particular OS (and trust me I know lots). They just give in to it because everyone else is. Hence why I said 'brainwashed'. I'm not saying they are stupid, I'm saying that's how our society has become (i.e. many people have something, so I must get that too... rather than doing research and comparing themselves). People are afraid to do their own things. It's becoming increasingly difficult for companies to get into industries, because no matter how much marketing they do, people tend to do what the majority do.

Not really. People just generally don't like change. If somebody already has all their contacts setup on an Android phone, already bought a bunch of apps, and is used to navigating the OS, then why would they want to jump over to something else?

The only people that "follow the crowd", as you claim, are kids in high school or younger. Once you get to the college age, you start to not give a damn what anybody else thinks. That group is only a small portion of the whole.

j2006 said,

That's the thing... many of those users DON'T 'like' that particular OS (and trust me I know lots). They just give in to it because everyone else is. Hence why I said 'brainwashed'. I'm not saying they are stupid, I'm saying that's how our society has become (i.e. many people have something, so I must get that too... rather than doing research and comparing themselves). People are afraid to do their own things. It's becoming increasingly difficult for companies to get into industries, because no matter how much marketing they do, people tend to do what the majority do.

So since they give in, they are brain washed? Sounds to be that if they give in, they are week and do not know what the hell is going on. I have seen people from all ages follow the crowd, but again...not brainwashing. With all the info available on all the different platforms, if users cannot read what each is about and make their own decision, then again...its not brainwashing. Its users ignorance on what is out there...or peer pressure.

Ronnet said,

The moment they become 'fans' or worse 'fanboys' is the moment they are brainwashed. At that point they'll start to defend or worse promote their OS of choice. They refuse to even consider another OS. There are a lot of people like this.

So there is a certain point where the market is saturated and there are few opportunities to make fans that hordes of brainwashed fans are making it hard to breakthrough something new even if its a fresh functional take on an old concept.

There's nothing wrong with having a preference for one product over another...
People that label them "fanboys" are just butthurt that they prefer the competitor and are actually more severe of a "fanboy" themselves due to their vocal insecurity. People just need to stop whining when they talk to somebody that contracts their preferences.

Astra.Xtreme said,

The only people that "follow the crowd", as you claim, are kids in high school or younger. Once you get to the college age, you start to not give a damn what anybody else thinks. That group is only a small portion of the whole.

You would be surprised the amount of adults out there that act the same way as kids. They either do not know what else is out there, or they choose something be cause thats what their friend has or what their friend recommended...they do no research of their own.

Astra.Xtreme said,

There's nothing wrong with having a preference for one product over another...
People that label them "fanboys" are just butthurt that they prefer the competitor and are actually more severe of a "fanboy" themselves due to their vocal insecurity. People just need to stop whining when they talk to somebody that contracts their preferences.

Of course there is nothing wrong with having a preference. But when they refuse to even consider another option and blindly go for the next version of the same OS then I think the term 'brainwashed' holds true.

But it's something you see on many markets, it even benefits Microsoft on the desktop and console market. In the case of Windows Phone it just makes it very hard for Microsoft to have a breakthrough because the same fans are high-level employees of OEMs, carriers and other businesses.

A phone is just a gadget that people fall in love with. And now Microsoft is too late and many people refuse to even consider it.

Astra.Xtreme said,
Since when does liking a particular OS mean the user is brainwashed?
Care to provide us with a witty Windows Phone persona?
I'll agree that not everybody who uses an iPhone is brainwashed. But many people I know think that only an iPhone can do certain things or the only smart phone is an iPhone. Their marketing and fad generation team at Apple does a fantastic job of making it seem like you're a douche w/o Apple.

Ronnet said,

The moment they become 'fans' or worse 'fanboys' is the moment they are brainwashed. At that point they'll start to defend or worse promote their OS of choice. They refuse to even consider another OS. There are a lot of people like this.
.


So true.... It is the Amiga complex....

j2006 said,
I'm glad he knows this. They have an EXCELLENT and unique phone OS, but because they were late to the game, they have to make a MAJOR impact in order for it to succeed. It's difficult in an industry where people are brainwashed with iEverything and Andrones.

I don't know who is the brainwashed one. I currently have a Windows Phone and after the initial "wow" factor wears off you start to realize all the deficiencies in the platform. I'm personally not looking at another Windows Phone device and it isn't because of the hardware that is out there or coming soon. Next device will be back to Android for me without a doubt.

j2006 said,
I'm glad he knows this. They have an EXCELLENT and unique phone OS, but because they were late to the game, they have to make a MAJOR impact in order for it to succeed. It's difficult in an industry where people are brainwashed with iEverything and Andrones.

Look, a Microsoft integrist

Microsoft was absolutely not late to the game. I had a Motorola Q in my pocket when the iPhone was announced, and Microsoft had a rather sizable portion of the smartphone market. I had a blast with that phone, running all manner of third-party apps, emulators, and interface extensions. It kicked the pants off of any BlackBerry for capability, had a sharper screen than most desktop LCDs, and the only thing I felt the iPhone had on it for features was WiFi and a better browser. Android effectively did not exist at this time, and the RAZR was just losing its cool.

Windows Mobile 5 also had one of the most obtuse user interfaces I have ever used, there were severe stability problems, and the battery life was poor. Security and enterprise integration was not up to what BlackBerry could provide, although it was clear they were at least trying (ActiveSync has been pretty solid). These are all problems that could have been fixed with software, but I'll be damned if there was ever a single OS update. I recall there being a patch for DST changes, and maybe an SSL root store update, and that was it. Future versions of the OS for newer Windows Mobile phones provided phenomenally few changes. It was a full three years before a proper answer to the iPhone would see the light of day, and even then (and even now!) it still has large amounts of features absent that their competitors have.

What Microsoft did was bigger than a mistake. Google beat them out the door while starting from scratch and played Microsoft's own game and won. Flooding the market with pervasive systems that are easy to develop for and extend with low OS costs is how Windows got onto nearly every desktop in the first place. Microsoft failed to learn from their past, failed to play to their strengths, and failed to quickly respond to changes in the market.

It's almost as if their smartphone department were under the watchful eye of nobody.

But we know that's not true.