Microsoft CEO Satya Nadella has become the third chief executive of the technology giant to openly admit to the company’s significant missteps in the mobile industry.
Nadella, who succeeded former CEO Steve Ballmer in 2014, recently discussed Microsoft’s challenges in the mobile sector, particularly the handling of the acquisition of the Nokia phone business.
In an interview with Business Insider, Nadella admitted that Microsoft’s exit from the mobile phone business could have been managed more effectively.
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When asked about a strategic mistake or regrettable decision during his tenure, Nadella responded: “The decision I think a lot of people talk about — and one of the most difficult decisions I made when I became CEO — was our exit from what I’ll call the mobile phone business as it was defined back then. In retrospect, I think there could have been ways we could have made it work by perhaps reinventing the category of computing between PCs, tablets, and phones.”
Microsoft’s foray into the mobile industry faced numerous challenges, including the ill-fated acquisition of Nokia’s phone business, which resulted in a $7.6 billion write-off a little over a year after Nadella took the helm.
Microsoft officially declared the end of Windows Phone a few years after the Nokia write-off. Despite subsequent attempts with products like the Android-powered Surface Duo and Surface Duo 2 handsets, the company has not outlined a clear mobile strategy. The lack of software updates and a successor for the Surface Duo have left questions about Microsoft’s future in the mobile space.
Satya Nadella is not the first Microsoft CEO to acknowledge the company’s mobile missteps. Bill Gates, Microsoft’s co-founder and former CEO, referred to losing to Android as his “greatest mistake ever.” Google acquired Android in 2005 for $50 million. Former Google CEO Eric Schmidt admitted in 2012 that their initial focus was competing with Microsoft’s early Windows Mobile efforts.
Former Microsoft CEO Steve Ballmer also recognized the company’s slow response to the Android and iPhone threat. Ballmer initially focused on Windows Mobile and famously dismissed the iPhone as the “most expensive phone in the world” that didn’t appeal to business customers due to its lack of a physical keyboard.
In 2013, Ballmer expressed regret about not prioritizing the development of mobile devices earlier, stating, “I regret there was a period in the early 2000s when we were so focused on what we had to do around Windows [Vista] that we weren’t able to redeploy talent to the new device called the phone. That is the thing I regret the most.”
In recent years, Microsoft has shifted its focus to developing apps for Android and iOS platforms, including Microsoft Office suites. The company has been continually updating its Phone Link app to connect Android and iPhone devices with Windows.
Moreover, Microsoft has established close partnerships, such as with Samsung, to preinstall mobile Office apps on Android handsets, showcasing the company’s evolving strategy in the mobile landscape.
It’s been a tough week for the “Magnificent Seven” — Apple, Meta, Amazon, Alphabet, Nvidia, Tesla and LinkedIn parent Microsoft — as lower-than-expected quarterly earnings took $200 billion from their market value. Amid conflict in the Middle East and higher interest rates at home, the AI-fueled optimism of earlier in the year has cooled, says Bloomberg, pushing the S&P 500 down 8.8% from its 2023 peak and raising the specter of a correction. Alphabet alone saw its “biggest single-session market value wipeout” on Wednesday, losing about $180 billion in value after reporting smaller-than-expected profit for its cloud division.