Steve Ballmer does not think 3rd party OEMs will work for Microsoft phone business, regrets not doing 1st party hardware sooner

by Surur
November 4, 2016

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Ex-Microsoft CEO Steve Ballmer still disagrees with Microsoft’s current direction around their mobile business.

As the outgoing CEO of Microsoft he forced the purchase of Nokia’s handset division in 2012, a deal which was rapidly reversed by Satya Nadella when he took over, who wrote off most of the $9.5 billion purchase price of the phone OEM.

In a Bloomberg interview Steve Ballmer said he still did not feel Microsoft’s current strategy of relying on 3rd party OEMs was viable, saying Microsoft’s usual strategy of “a separation of chips, systems and software, wasn’t largely gonna reproduce itself in the mobile world.

There was a fundamental disagreement about how important it was to be in the hardware business,” Ballmer said. “I had pushed Surface. The board had been a little — little reluctant in supporting it. And then things came to a climax around what to do about the phone business.”

He noted that disagreement around Microsoft’s direction in mobile damaged his relationship with Bill Gates, saying they “drifted apart” due to this.

It was definitely not a simple thing for either one of us,” he said. There was a “little bit of a difference in opinion on the strategic direction of the company.”

He said his only regret was being too slow, saying “I would have moved into the hardware business faster.

He took credit for the Microsoft Surface range, noting the board was not greatly supportive of this, and also of initiating Microsoft’s currently very successful cloud business.

Towards the end, that was a bit more difficult than not, particularly with the strategic direction change and you know, the stock price isn’t going anywhere, so the rest of the board felt pressure — despite the fact that profits were going up — so I think you had kind of a combustible situation,” he recalled.

While Steve Ballmer may portray himself somewhat as a visionary who battled opposition from a short-sighted board, others may remember that Microsoft was actually in the mobile business since 1999 and had in fact starved that division of resources while Microsoft fixed their Vista mess, and in addition had suffered from Blackberry envy and was concentrating on keyboard-based smartphones rather than the touch screen keyboardless form factor that currently dominates, and that Microsoft’s reversal and later purchase of Nokia’s phone division may have simply been another case of Apple envy.

While there is no doubt there could have been a route for Microsoft to dominate mobile, the truth is that Steve Ballmer himself should take much of the blame for fumbling the execution during the 2002 to 2006 range when Windows Mobile was doing particularly well.

Ballmer noted that he is of course currently very happy with the near doubling of Microsoft’s share price under Nadella’s stewardship, saying the market agreed with the direction he was taking the company, and he was excited about that.

Is Steve Ballmer the hero or villain in Microsoft’s mobile tragedy? Let us know below.

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