Today’s smartphones fall into two basic categories. Apple’s iConic iPhone, and Google’s Android OS on a plethora of smartphones and manufacturers. Whatever happened to Microsoft? Two words: Steve Ballmer.
The iPhone was introduced in early 2007. Why didn’t Microsoft realize what was about to happen to the industry? Even the thieves at Google’s Android project could see the future during Steve Jobs’ presentation, and immediately headed back to the drawing board to copy Apple. What happened at Microsoft?
Blind As A Bat
My father once told me that ‘for every inch of hubris you’ll need a foot of humility to balance.’ Everything then Microsoft CEO Steve Ballmer said while dissing Apple’s iPhone smacks of hubris and arrogance and is missing the humility needed to say of a competitor’s product, ‘Damn, this thing is cool.’
In a series of interviews recently Ballmer tried to rewrite some of his own history and that of the smartphone that destroyed Microsoft’s presence in the then nascent smartphone industry.
I wish I’d thought about the model of subsidizing phones through the operators. You know, people like to point to this quote where I said iPhones will never sell, because the price at $600 or $700 was too high. And there was business model innovation by Apple to get it essentially built into the monthly cellphone bill.
The so-called subsidy market was there already. Apple merely made it more commonplace, dropped the iPhone’s price to become more competitive, and stopped taking a share of the subsidized price from AT&T to make the subsidized price more attractive. iPhone sales skyrocketed within a few years.
What was Microsoft doing?
The company found itself stuck between a rock and a hard spot far faster than it could turn around a soon-to-be moribund smartphone business. A year later, Google dropped Android OS onto the market, made it free for manufacturers who had been paying Microsoft for the privilege of using an anemic and underpowered Windows Phone OS, and the handwriting hit the wall.
Microsoft’s Windows Phone was dead.
The difference between Ballmer’s excuses and reality are distinct. Microsoft’s Windows product sucked relative to the iPhone and future iPhones. Microsoft’s pricing model was devastated when the iPhone-like Android OS was given to cellphone makers for free. The $7-billion purchase of Nokia was just another expense in a long line of attempts to diversify Microsoft which ended in abysmal failure.
Every leader can have one of both of two kinds of power. Personal power and position power. Jobs had both and he was able to discern which way many markets would move, use his personal power to motivate designers and engineers to get on and stay on the right path, and apply his position power as an icon and CEO to persuade the board of directors and other executives to move forward, and that also meant project leaders would get the resources needed to make the next great thing.
Microsoft’s Ballmer only had position power. He was the boss and completely unable to see the future, unable to persuade Microsoft’s board to authorize the company to move in the right direction because he himself didn’t know what to do or which direction Microsoft needed to go.
My worry these days is that Apple doesn’t have that position and personal power leader to see the future and make it happen. Some say Apple’s CEO Tim Cook is the new Steve Ballmer; both were good at extracting profits from a product line, but where’s the vision for new and revolutionary products? Microsoft never found it under Ballmer who remained reactionary until he was fired. What about Tim Cook?
With apologies to Clara Peller, “Where’s the beef?“