There is the rather pervasive idea that the DoJ’s antitrust action against Microsoft was a failure, and that the company was on the road to irrelevance in any case at the hands of Apple and Google.

I have long argued that having anti-trust supervisors installed at all high-level meetings at Microsoft seriously curtailed the company’s competitive edge, resulting in a stalling of development in products such as Internet Explorer and Windows Mobile.

The case started in 1998 and concluded in 2001, and ended in a consent decree which placed constraints on Microsoft’s Windows business and regular review until 2009, with some elements only expiring in 2012.

Now in an interview with CNBC Bill Gates admitted as much, saying:

“There’s no doubt the antitrust lawsuit was bad for Microsoft, and we would have been more focused on creating the phone operating system, and so instead of using Android today, you would be using Windows Mobile if it hadn’t been for the antitrust case,”

Bill Gates said the case distracted him, and the company was only 3 months late in closing a deal with Motorola to use the operating system on their phones.

“Oh, we were so close,” Gates said “I was just too distracted. I screwed that up because of the distraction.”

It is important to note that we are talking about Windows Mobile, which stretched from 1999 to 2009, and which was a rather dynamic operating system with a robust ecosystem of hardware and software. Users of smartphones of that era will forever be annoyed when told Apple invented the smartphone, but that perception underlines Microsoft’s failure to grasp the opportunity, with Microsoft, in particular, treating Windows Mobile as a toy operating system which was an extension of Windows, with extremely slow development.

Of course, contemporaneous watchers at the time would have blamed terrible execution as the reason for the failure, but one of the major reasons for this was that Microsoft did not offer their Windows Mobile division enough resources, mainly because Bill Gates was focusing on other parts of the company. This also led to other issues, such as not releasing products such as Courier.

See the video below:

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