Microsoft CEO Satya Nadella has confessed that one of his biggest regrets as the leader of the software giant was giving up on the mobile phone market.
In an interview with Business Insider, Nadella said that exiting the smartphone industry was one of the most difficult decisions he made when he became CEO in 2014.
Microsoft had acquired Nokia’s phone business in 2013 for $7.6 billion, hoping to compete with Apple and Google in the booming smartphone market.
However, the deal proved to be a disaster, as Microsoft failed to gain significant market share and popularity with its Windows Phone operating system.
In 2015, Microsoft announced a massive write-off of $7.6 billion related to the Nokia acquisition and cut 7,800 jobs, mostly in the phone division.
In 2017, Microsoft officially confirmed that it would no longer develop new features or hardware for Windows 10 Mobile, effectively ending its smartphone ambitions.
Nadella admitted that he made a mistake by abandoning the mobile phone business, and said that he could have done things differently by reinventing the category of computing between PCs, tablets, and phones.
“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,” he said.
Nadella’s admission echoes the sentiments of his predecessors, Bill Gates and Steve Ballmer, who also expressed regret over Microsoft’s failure to capture the smartphone market.
Gates called losing to Android his “greatest mistake ever”, while Ballmer admitted that he was too focused on Windows and missed the opportunity to innovate in the phone space.
Microsoft has not given up on mobile devices entirely, as it has launched several Android-powered products under its Surface brand, such as the Surface Duo and Surface Duo 2.
However, these devices have not been very successful either, and it is unclear if Microsoft has any plans to launch a new phone in the future.
Microsoft has shifted its focus to other areas of growth, such as cloud computing, gaming, artificial intelligence, and mixed reality.
The company recently announced a $69 billion deal to acquire Activision Blizzard, one of the largest game publishers in the world. The deal is expected to boost Microsoft’s gaming revenue and expand its Xbox Game Pass subscription service.
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