Microsoft officially pulled the plug on its mobile operating system in 2017, when it made a quiet admission that there was no room in the market for a third option alongside iOS and Android. During an interview at The New York Times' Dealbook Conference, Bill Gates has expressed his thoughts on why Windows Phone failed. He explained that if he hadn't been busy fighting in a Microsoft antitrust case in the early 2000s, the company would have been in a better position to build the ultimate mobile operating system for phones.
Gates seems convinced that one of the biggest reasons Microsoft missed the mobile boat was the amount of antitrust scrutiny coming from the US Department of Justice, which also made him retire sooner than he would have liked. He seemed to hint at the current wave of regulatory probes and how they could act as a distraction for companies that are looking to build the next big thing.
He noted "I didn’t think Microsoft should be broken up, I argued against it, and I wouldn’t wish that on anyone." Then he explained that Microsoft missed an important opportunity to release an operating system for a Motorola phone, possibly referring to the Droid lineup that became very popular a decade ago.
Of course, the reality may be more complicated than that. The general consensus among ex-Microsoft employees and pundits seems to be that the company tried to replicate the traditional Windows licensing model that worked well for desktop PCs but was otherwise inadequate for mobile devices. Then it alienated app developers and hardware partners with platform reboots, eventually sealing the fate of Windows on phones.
Earlier this year, Gates said losing in mobile to Android was the biggest mistake he has made as an entrepreneur. However, he didn't seem that concerned about the loss of $400 billion worth of business. During the interview with New York Times columnist Andrew Ross Sorkin, he said "now nobody here has ever heard of Windows Mobile. But oh, well. That’s a few hundred billion here or there."
Microsoft has indeed weathered the mobile storm by focusing on cloud and productivity software, as well as building the Surface family of aspirational hardware.
The company surprised everyone this year when it announced Surface Duo, a dual-screen phone that's powered by Android. In a world that's dominated by Android and iOS, Microsoft has simply chosen to build its vision for mobile computing using Google's operating system, and it's going to be interesting to see how this effort will pan out.