Fast Charge: Why Bill Gates wasn’t the only loser with the Windows Phone

Windows lost out to Android in the early days of smartphones and Bill Gates is right to feel regret, but it wasn’t just Microsoft who lost out.

It’s estimated that Bill Gates is worth over $100 billion (£79 billion) and he is widely admired as much for his prolific philanthropy as for the technological innovations that made Windows a staple of every household. So if he’s ever gone wrong somewhere it’s hard to see how.

Despite this apparent infallibility, he made a revealing confession in a recent interview. Gates expressed that his main regret during his time at Microsoft was missing the boat on dominating the mobile phone landscape, leading to Microsoft abdicated its natural place to Google’s Android.

In retrospect, it’s hard to see how Microsoft blew this opportunity. Windows was familiar to almost everyone on the planet and the company was well-versed at working with multiple manufacturers in the way Android does today. Microsoft had a natural advantage in a market where, as Gates acknowledges, there’s only room for “one standard non-Apple platform.” So how did the software giant lose a lucrative potential market to a search engine company?

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Despite Microsoft’s relative success with what we’d now describe as simple mobile phones, the launch of the iPhone in 2007 shook up the mobiles industry irreversibly. Looking back, we can recognise that it was a critical juncture – a revolution in personal tech, but that wasn’t obvious to everyone at the time – as can be seen clearly by the reaction of two different men to news of the iPhone.

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Steve Ballmer dismissed the innovation out of hand, saying, “there’s no chance that the iPhone is going to get any significant market share.” In an infamous interview that has aged like warm milk, the former Microsoft CEO smirks when asked for his opinion on the new iPhone, saying that at $500 it was too expensive and would not appeal because – in what’s now the most laughable part of the video – it “doesn’t have a keyboard which makes it not a very good email machine.” Smartphones evolved far beyond ‘email machines’ and Microsoft’s mobile division succumbed to the same fate as all creatures who don’t evolve.

The second man is Andy Rubin, then Vice President of Google, tasked with developing the Android operating system. As the iPhone was unveiled via webcast, he asked his driver to pull over so he could finish watching. When the presentation was over, Rubin decided to scrap the phone Android was developing and to rethink the software all over again, in what proved to be a watershed moment. After some years of competition, Android established itself as the go-to Apple alternative while Microsoft was left behind in the dust.

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While Windows ploughed on with Windows Mobile, and then switched to Windows Phone in 2010, the damage done by early decision-making had already taken hold. It was imperative to make a big first impression on the industry, in order to survive the vast, fragmented market that included Nokia’s Symbian, BlackBerry’s BBS and Palm’s webOS all competing for the same space — as Apple’s competitors. As Gates said in his recent interview: “It really is winner take all. If you’re there with half as many apps or 90 percent as many apps, you’re on your way to complete doom.”

It’s easy now to laugh at Ballmer’s misreading of the iPhone launch but there’s also reason to be sad that Windows Phone never quite worked out, because competition often results in an improved experience for all tech users. Take just some of the innovations Windows Phone pioneered for the mobile interface:

• Dark Mode: This year has been the year of dark mode, with the black-and-grey interface arriving in iOS 13 and Android Q later this year. But Windows beat both Apple and Android to the punch and they’re both still slowly catching up with this popular feature.
• Swipe-to-write keyboard: The feature present in some third-party Android keyboards will finally to be rolling out to iPhones in the next big software update. Microsoft enabled this on its operating system far earlier.
• Quick-launch camera button: The lock-screen camera button has allowed us to quickly capture spontaneous moments — and it was Windows who brought it to us first of all.

Bill Gates estimated that missing out on the mobile operating system market cost Microsoft $400 billion (£315 billion). But stifled innovation costs all consumers, who benefit from dynamic competition between innovative rivals.

The next chapter in this story is Huawei’s attempt to build its own operating system, HongMeng OS, in the wake of the Android ban. It may also prove to be only a few pages long but here’s hoping that the pressure to innovate once again pays dividends for the general consumer and not just for companies with a market stranglehold.