Microsoft's Biggest Mistake: Missing The 'Mobile' Boat

by CXOtoday News Desk    Jul 16, 2015


The PC market has been declining - quarter by quarter -  so much that some day personal computers will cease to exist. Companies that have missed the boat in embracing ‘Mobile’ early on have been clearly suffering. Unfortunately one of the global tech majors suffering that earlier adopted a PC-only strategy is Microsoft. That was past, but the mistake continues to haunt the global giant.

The “One big mistake”

The mobile-focused CEO Satya Nadella acknowledged that “one big mistake” the company made in the past was to think the personal computer will reign supreme forever and failing to anticipate the technological transformation of the mobile phone.

“If anything, one big mistake we made in our past was to think of the PC as the hub for everything for all time to come. And today, of course, the high volume device is the six-inch phone,” he said, as he recalled that when he had joined the company in 1992, the focus and ambition was to take the personal computer in every home and on every desk. 

“But to think that that’s what the future is for all time to come would be to make the same mistake we made in the past without even having the share position of the past. So that would be madness,” Nadella said in an interview to technology news website ZDNet.

According to The India-born CEO, the company has to be on the “hunt for what is the next bend in the curve“.

Missing on the ‘mobile’ boat

The changing of the tide for PCs for the last 3-4 years and a full on crash in the market by end-2012, when sales suddenly plummeted drastically was a caution signal for PC makers. PCs were very much the core of Microsoft’s strategy. Traditional PC vendors such as Dell, HP and Lenovo as well as Intel have moved to tablets and smartphones and mobility services, in the last 2-3 years, Microsoft’s Nokia purchase came to be yet another blunder. 

Nokia, which remained world’s number two mobile phone maker behind Samsung but was increasingly being dominated by the likes of Apple and Samsung, and the acquisition was seen as a positive thing for Microsoft. 

However, Microsoft’s mobile failure stems from a lack of understanding of the iPhone’s success, believe experts. The result was that Microsoft announced cutting 7,800 jobs and write off USD 7.6 billion, all related to its Nokia business.

As tech analyst Yoni Heisler notes in a BGR blog, Microsoft repeatedly goes back to productivity as a key selling point for Windows Phones and Windows RT tablets. Microsoft became the giant it is today on the back of the Windows platform and its productivity suite, so it’s not exactly surprising that the company would continue to beat the same old drum.

Making a difference?

However Nadella is upbeat on his forthcoming ventures. Elaborating the outlook for the Windows phone, which would not be any other phone operating system or device. “We’re doing that with features like Continuum. Even the phone, I just don’t want to build another phone, a copycat phone operating system, even,” he said.

The Microsoft chief had spelled out personal computing, reinvention of productivity and business process and building an intelligent cloud platform as the company’s three “bold ambitions” going forward at the Microsoft Worldwide Partner Conference 2015.

Meanwhile, Gartner does anticipate sales of PCs picking for a quarter when Microsoft unleashes Windows 10, but all in all this will probably not be a year that computer makers ever refer to as the good old days — and this signals that companies still clinging to PCs and missing out on mobile may be prepared to face tremendous challenges in the coming days.