5 ms·

Steve Ballmer Says Smartphones Broke His Relationship with Bill Gates

79 points by denis1 10y ago

serg_chernata 10y ago
Does anyone know if Bill Gates also opposes Microsoft's manufacturing of other hardware such as Surface products or was it just the mobile phones?
- ComputerGuru 10y ago
  I never detected that Gates was less than genuine in his zeal for the Zune (the few times he spoke about it, that is).
almata 10y ago
I actually think Ballmer really was the perfect finance-oriented CEO between tech-oriented Gates and Nadella. Except instead of 14 years it'd probably have been better a 5-8 years period or so. Sadly, 14 years was a too long period and maybe Microsoft lost some good trains along that time.
intrasight 10y ago
Hindsight is 20/20 More important decision would have been "consumer" vs "business". Even if they invested in phones earlier, it would have made no difference if the company was still run by salespeople focused on business seat sales.
the_duke 10y ago
So Apple invented carrier subsidies for cell phone purchases just for the iPhone, and that's why the iPhone worked? Yeah. Solid reasoning there, Ballmer... They were a thing long before the iPhone. But then again, hugely successful people almost never say: "yeah, I was an idiot who just didn't see it". And he was very successful in terms of increasing revenue and working the markets.
- syntheticnature 10y ago
  Came here to say exactly this -- of course, at his level of wealth, he probably never noticed that the phones were subsidized as a matter of course (unless you broke your phone) in the US.
- legitster 10y ago
  They did not line item phones into monthly bills to the extent they do now. And they especially did not for smart phones. I remembered freeby phones, and high end phones you purchased with rebates attached. But the high end consumer phones were certainly not being attached like this.
  - jalfresi 10y ago
    In the states maybe but in the rest of the entire freakin world, thats how we paid for phones.
- kohanz 10y ago
  That said, it still blows me away when I see my friends taking these "subsidies" without understanding that they are basically paying full price for the phone, if not more.
  - croon 10y ago
    This. It's in the same way that I don't understand people living pay check to pay check. Live really poor for 3 months, then keep your income/costs above 1, and you'll be able to plan better and never pay for anything through the nose. It got me through college without any help from parents nor loans, and it worked when I was unemployed, and obviously works now that I make a lot more.
  - knd775 10y ago
    Carrier subsidies are all but dead nowadays. Carriers are mostly just offering phone leasing or payment plans now.
    - 10y ago
legitster 10y ago
The point they made about mobile carrier subsidies is surprisingly big. A $600 phone even today languishes without carrier support (though I believe on a carrier subsidy, the total cost of the phone ends up being something like a grand to the customer). But Apple kind of invented the concept of "phone-as a-service"?
Joeboy 10y ago
Warning: This page autoplays video (/audio).
macspoofing 10y ago
>"There was a fundamental disagreement about how important it was to be in the hardware business," And that's not a settled answer. The two giants in mobile, Apple and Google, have diametrically opposite approaches. Apple has the entire verticle, from SOC to the OS. Google controls primarily the OS and application stack. Both are incredibly successful. Microsoft could never have been an Apple. But they could have been a Google. They could have had Android, and I don't think they would have complained if that was the case. >Ballmer said the mistake was getting into handsets and tablets too late. What is he talking about? Microsoft was in the handset and tablet business since the 90s. Their offering didn't resonate. They were also always afraid of cannibalizing their Office and Windows business. Their actions in the 90s and early 2000s also built up a lot of ill-will, so nobody was rooting for them. >Apple Inc.'s iPhone would never sell because it cost too much? He now wishes he'd realized how Apple was going to make it work -- through mobile carrier subsidies. That's also part of the problem. Ballmer was obsessed with Apple and while he focused on Apple, Android took over the market.
- ableal 10y ago
  > What is he talking about? Microsoft was in the handset and tablet business since the 90s. But not manufacturing hardware under their own brand. MS had software for Dell and HP hardware - I have a couple of Windows CE Pocket PCs in a bin somewhere ...
  - macspoofing 10y ago
    Again, who says that was the only path to success? Microsoft made billions by letting others handle the hardware. If Microsoft was in Google's position and controlled a dominant mobile OS, I think they would be very happy. Microsoft could never have pulled off Apple's mobile strategy of controlling the entire verticle. It's not in their DNA.
- mc32 10y ago
  I remember when the Courier[1] demo came out. I was excited about it... Then deeply disappointed when it was unceremoniously shelved. It's speculation whether it would have been a successful product, but I think the idea back then had potential but Ballmer was unwilling to gamble on it. [PS] On the other hand, he did gamble on long-term things like Azure, so it's not like he made all the wrong bets --but it seemed like an obvious bet to go with something like a Courier, specially after all the buzz it created. [1]https://en.wikipedia.org/wiki/Microsoft_Courier https://en.wikipedia.org/wiki/Microsoft_Courier
ktRolster 10y ago
This quote tho: "I wish I'd thought about the model of subsidizing phones through the operators," he said. "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 cell phone bill." Apparently he didn't realize cell phone companies had been doing that for nearly a decade before the iPhone.
- cma 10y ago
  And it was subsidized on top of the $600 price. I'm sure many of the high-end Windows phones were subsidized too.
  - selectodude 10y ago
    The first iPhone was actually being sold unsubsidized. That's why you could pop in and buy one from the Apple Store in cash. It was one of Apple's concessions to AT&T. iPhone 3G was subsidized and sold for $200.
    - altano 10y ago
      Define subsidized. You had to get a two year contract. You couldn't walk into the Apple Store and buy an unlocked iPhone. AT&T may not have been handing Apple cash as part of the deal, but the contract made it more expensive than the price of the phone.
    - deleted 10y ago
      [deleted]
- elorant 10y ago
  I can understand why he didn't realize that. He's a super rich individual and chances are he doesn't personally pay his bills. What I find shocking is that no one in the chain of command bothered to mentioned to him that you know we could subsidize the price. Which tells me that something in high management around that era should be quite rotten.
sharemywin 10y ago
The stars aligned(aka Jobs was brilliant) with the iphone. $199 cheap enough for consumer(with subsidy). leverage people's current ipod music investment into the iphone. no buttons. slick design. "felt like phone as an app on my new ipod." really easy to use for non-tech people.
- xenobioticants 10y ago
  > leverage people's current ipod music investment into the iphone. Yeah, no. Before streaming by and far the most amount of people didn't buy music in iTunes. They either torrented it or (if technically challenged) simply bought it physically and then ripped it to iTunes.
  - jonnathanson 10y ago
    "(if technically challenged) simply bought it physically and then ripped it to iTunes." Minor nitpick, but ripping from CD to iTunes in the early days was a nontrivial process for the technically challenged. I'd argue that audiophiles were the group most likely to have done this, i.e., to get lossless music files. (The resulting file sizes were monstrous, of course, and this eventually led to some storage issues. But I digress.) I'd argue that the technically challenged were the vanguard of buying music files on iTunes. The tech-savvy were torrenting, and everyone else found the iTunes store a really easy way to click and download music. In fact, I distinctly remember snarky comments back in the day about how paying $0.99 per track on iTunes was "a tax on technical illiteracy."
    - xenobioticants 10y ago
      If you inserted a CD, iTunes instantly offered to rip it for you, fully automatically. Didn't even need to fiddle with settings, it was literally just pressing 'ok'. I'd say of the technically challenged there was a subset that used iTunes to buy maybe a few tracks or albums, and certainly not enough to keep them 'trapped' in the Apple ecosystem.
      - 10y ago
d3ckard 10y ago
People seem to be too rash to bash him about subsidies. Yes, they were standard before. No, phones at the time did not cost nearly as much. Prices of modern top-notch smartphones are insane. The trick was in hiding the price and Ballmer just did not expect how much people are willing to pay monthly. I wouldn't guess it either.
Nokinside 10y ago
Gates-Ballmer era in Microsoft was incredibly successful, but not because they had technological insight or creativity. It's hard to come up with any technological innovations from inside Microsoft in 80's and 90's. Microsoft strategy was to buy out companies that seemed to build something new and either integrate the software or bury it. Gates and Ballmer were both smart and ultra-aregressive ruthless businessmen. Technology was always secondary to business. Few examples of their failures and corrective measures: The internet and the browser, Java and Smartphones. In each case they were hopelessly late and their reaction was buying spree, failure and repeat until success.
- kyberias 10y ago
  "any technological innovations ... in 80's and 90's" What? Ok, first, do you think they've ever innovated anything? During the 2000's? What exactly? Wasn't Windows NT, for example, innovative? The kernel is still powering the Windows operating system. Internet Explorer was a hugely successful browser dominating the market. Innovation isn't only creating something from scratch. One can also create innovative products by acquiring the basis for that and developing until it is successful. Of course they're approach has been to "repeat until success". And they quite often get there.
  - Nokinside 10y ago
    >Wasn't Windows NT, for example, innovative? MS hired VAX VMS team to write their second system. It was basic engineering and basically next better version of VMS from scratch. >Internet Explorer was a hugely successful browser dominating the market. Only because monopoly power. IE6 delayed new innovations from emerging.
  - gizmodo59 10y ago
    > Internet Explorer was a hugely successful browser dominating the market. Mostly because it was shipped with Windows and many people wont change it (Non tech). Furthermore, setting aside the anti-trust case, I would rather say they did not capitalize on that start they got IMHO.
treebeard901 10y ago
It may be true Microsoft didn't want to get into mobile initially but this quote from Ballmer in 2007 about the iPhone says everything: "it doesn't have a keyboard, which makes it not a very good email machine." The [old] Microsoft was not able to see mobile as anything other than another way to sell outlook.
- snerbles 10y ago
  > The [old] Microsoft was not able to see mobile as anything other than another way to sell outlook. This is best evidenced by their pre-iPhone smartphones, most of which were little more than PocketPCs with keyboards and cellular hardware tacked on.
- marssaxman 10y ago
  Hmm. I'll give him that, since I still think phones without keyboards are not very good email machines. How can you touch-type with nothing to touch?
MarkMMullin 10y ago
As a person who used to make their living completely off the msft stack and now is completely off it - I'd redo that headline to say every action of Ballmer's probably helped break his relationship with Gates - yes, Gate's Microsoft was very predatory and could be a very bad actor, but Ballmer's entire achievement was to help drive non-msft solutions to dominance and leave Nadella in a Sisyphean role -

79 points by denis1 10y ago

Does anyone know if Bill Gates also opposes Microsoft's manufacturing of other hardware such as Surface products or was it just the mobile phones?

ComputerGuru 10y ago
I never detected that Gates was less than genuine in his zeal for the Zune (the few times he spoke about it, that is).

almata 10y ago

I actually think Ballmer really was the perfect finance-oriented CEO between tech-oriented Gates and Nadella. Except instead of 14 years it'd probably have been better a 5-8 years period or so. Sadly, 14 years was a too long period and maybe Microsoft lost some good trains along that time.

intrasight 10y ago

Hindsight is 20/20 More important decision would have been "consumer" vs "business". Even if they invested in phones earlier, it would have made no difference if the company was still run by salespeople focused on business seat sales.

the_duke 10y ago

So Apple invented carrier subsidies for cell phone purchases just for the iPhone, and that's why the iPhone worked? Yeah. Solid reasoning there, Ballmer... They were a thing long before the iPhone. But then again, hugely successful people almost never say: "yeah, I was an idiot who just didn't see it". And he was very successful in terms of increasing revenue and working the markets.

syntheticnature 10y ago
Came here to say exactly this -- of course, at his level of wealth, he probably never noticed that the phones were subsidized as a matter of course (unless you broke your phone) in the US.
legitster 10y ago
They did not line item phones into monthly bills to the extent they do now. And they especially did not for smart phones. I remembered freeby phones, and high end phones you purchased with rebates attached. But the high end consumer phones were certainly not being attached like this.
- jalfresi 10y ago
  In the states maybe but in the rest of the entire freakin world, thats how we paid for phones.
kohanz 10y ago
That said, it still blows me away when I see my friends taking these "subsidies" without understanding that they are basically paying full price for the phone, if not more.
- croon 10y ago
  This. It's in the same way that I don't understand people living pay check to pay check. Live really poor for 3 months, then keep your income/costs above 1, and you'll be able to plan better and never pay for anything through the nose. It got me through college without any help from parents nor loans, and it worked when I was unemployed, and obviously works now that I make a lot more.
- knd775 10y ago
  Carrier subsidies are all but dead nowadays. Carriers are mostly just offering phone leasing or payment plans now.
  - 10y ago

legitster 10y ago

The point they made about mobile carrier subsidies is surprisingly big. A $600 phone even today languishes without carrier support (though I believe on a carrier subsidy, the total cost of the phone ends up being something like a grand to the customer). But Apple kind of invented the concept of "phone-as a-service"?

Joeboy 10y ago

Warning: This page autoplays video (/audio).

macspoofing 10y ago

>"There was a fundamental disagreement about how important it was to be in the hardware business," And that's not a settled answer. The two giants in mobile, Apple and Google, have diametrically opposite approaches. Apple has the entire verticle, from SOC to the OS. Google controls primarily the OS and application stack. Both are incredibly successful. Microsoft could never have been an Apple. But they could have been a Google. They could have had Android, and I don't think they would have complained if that was the case. >Ballmer said the mistake was getting into handsets and tablets too late. What is he talking about? Microsoft was in the handset and tablet business since the 90s. Their offering didn't resonate. They were also always afraid of cannibalizing their Office and Windows business. Their actions in the 90s and early 2000s also built up a lot of ill-will, so nobody was rooting for them. >Apple Inc.'s iPhone would never sell because it cost too much? He now wishes he'd realized how Apple was going to make it work -- through mobile carrier subsidies. That's also part of the problem. Ballmer was obsessed with Apple and while he focused on Apple, Android took over the market.

ableal 10y ago
> What is he talking about? Microsoft was in the handset and tablet business since the 90s. But not manufacturing hardware under their own brand. MS had software for Dell and HP hardware - I have a couple of Windows CE Pocket PCs in a bin somewhere ...
- macspoofing 10y ago
  Again, who says that was the only path to success? Microsoft made billions by letting others handle the hardware. If Microsoft was in Google's position and controlled a dominant mobile OS, I think they would be very happy. Microsoft could never have pulled off Apple's mobile strategy of controlling the entire verticle. It's not in their DNA.
mc32 10y ago
I remember when the Courier[1] demo came out. I was excited about it... Then deeply disappointed when it was unceremoniously shelved. It's speculation whether it would have been a successful product, but I think the idea back then had potential but Ballmer was unwilling to gamble on it. [PS] On the other hand, he did gamble on long-term things like Azure, so it's not like he made all the wrong bets --but it seemed like an obvious bet to go with something like a Courier, specially after all the buzz it created. [1]https://en.wikipedia.org/wiki/Microsoft_Courier https://en.wikipedia.org/wiki/Microsoft_Courier

ktRolster 10y ago

This quote tho: "I wish I'd thought about the model of subsidizing phones through the operators," he said. "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 cell phone bill." Apparently he didn't realize cell phone companies had been doing that for nearly a decade before the iPhone.

cma 10y ago
And it was subsidized on top of the $600 price. I'm sure many of the high-end Windows phones were subsidized too.
- selectodude 10y ago
  The first iPhone was actually being sold unsubsidized. That's why you could pop in and buy one from the Apple Store in cash. It was one of Apple's concessions to AT&T. iPhone 3G was subsidized and sold for $200.
  - altano 10y ago
    Define subsidized. You had to get a two year contract. You couldn't walk into the Apple Store and buy an unlocked iPhone. AT&T may not have been handing Apple cash as part of the deal, but the contract made it more expensive than the price of the phone.
  - deleted 10y ago
    [deleted]
elorant 10y ago
I can understand why he didn't realize that. He's a super rich individual and chances are he doesn't personally pay his bills. What I find shocking is that no one in the chain of command bothered to mentioned to him that you know we could subsidize the price. Which tells me that something in high management around that era should be quite rotten.

sharemywin 10y ago

The stars aligned(aka Jobs was brilliant) with the iphone. $199 cheap enough for consumer(with subsidy). leverage people's current ipod music investment into the iphone. no buttons. slick design. "felt like phone as an app on my new ipod." really easy to use for non-tech people.

xenobioticants 10y ago
> leverage people's current ipod music investment into the iphone. Yeah, no. Before streaming by and far the most amount of people didn't buy music in iTunes. They either torrented it or (if technically challenged) simply bought it physically and then ripped it to iTunes.
- jonnathanson 10y ago
  "(if technically challenged) simply bought it physically and then ripped it to iTunes." Minor nitpick, but ripping from CD to iTunes in the early days was a nontrivial process for the technically challenged. I'd argue that audiophiles were the group most likely to have done this, i.e., to get lossless music files. (The resulting file sizes were monstrous, of course, and this eventually led to some storage issues. But I digress.) I'd argue that the technically challenged were the vanguard of buying music files on iTunes. The tech-savvy were torrenting, and everyone else found the iTunes store a really easy way to click and download music. In fact, I distinctly remember snarky comments back in the day about how paying $0.99 per track on iTunes was "a tax on technical illiteracy."
  - xenobioticants 10y ago
    If you inserted a CD, iTunes instantly offered to rip it for you, fully automatically. Didn't even need to fiddle with settings, it was literally just pressing 'ok'. I'd say of the technically challenged there was a subset that used iTunes to buy maybe a few tracks or albums, and certainly not enough to keep them 'trapped' in the Apple ecosystem.
    - 10y ago

d3ckard 10y ago

People seem to be too rash to bash him about subsidies. Yes, they were standard before. No, phones at the time did not cost nearly as much. Prices of modern top-notch smartphones are insane. The trick was in hiding the price and Ballmer just did not expect how much people are willing to pay monthly. I wouldn't guess it either.

Nokinside 10y ago

Gates-Ballmer era in Microsoft was incredibly successful, but not because they had technological insight or creativity. It's hard to come up with any technological innovations from inside Microsoft in 80's and 90's. Microsoft strategy was to buy out companies that seemed to build something new and either integrate the software or bury it. Gates and Ballmer were both smart and ultra-aregressive ruthless businessmen. Technology was always secondary to business. Few examples of their failures and corrective measures: The internet and the browser, Java and Smartphones. In each case they were hopelessly late and their reaction was buying spree, failure and repeat until success.

kyberias 10y ago
"any technological innovations ... in 80's and 90's" What? Ok, first, do you think they've ever innovated anything? During the 2000's? What exactly? Wasn't Windows NT, for example, innovative? The kernel is still powering the Windows operating system. Internet Explorer was a hugely successful browser dominating the market. Innovation isn't only creating something from scratch. One can also create innovative products by acquiring the basis for that and developing until it is successful. Of course they're approach has been to "repeat until success". And they quite often get there.
- Nokinside 10y ago
  >Wasn't Windows NT, for example, innovative? MS hired VAX VMS team to write their second system. It was basic engineering and basically next better version of VMS from scratch. >Internet Explorer was a hugely successful browser dominating the market. Only because monopoly power. IE6 delayed new innovations from emerging.
- gizmodo59 10y ago
  > Internet Explorer was a hugely successful browser dominating the market. Mostly because it was shipped with Windows and many people wont change it (Non tech). Furthermore, setting aside the anti-trust case, I would rather say they did not capitalize on that start they got IMHO.

treebeard901 10y ago

It may be true Microsoft didn't want to get into mobile initially but this quote from Ballmer in 2007 about the iPhone says everything: "it doesn't have a keyboard, which makes it not a very good email machine." The [old] Microsoft was not able to see mobile as anything other than another way to sell outlook.

snerbles 10y ago
> The [old] Microsoft was not able to see mobile as anything other than another way to sell outlook. This is best evidenced by their pre-iPhone smartphones, most of which were little more than PocketPCs with keyboards and cellular hardware tacked on.
marssaxman 10y ago
Hmm. I'll give him that, since I still think phones without keyboards are not very good email machines. How can you touch-type with nothing to touch?

MarkMMullin 10y ago

As a person who used to make their living completely off the msft stack and now is completely off it - I'd redo that headline to say every action of Ballmer's probably helped break his relationship with Gates - yes, Gate's Microsoft was very predatory and could be a very bad actor, but Ballmer's entire achievement was to help drive non-msft solutions to dominance and leave Nadella in a Sisyphean role -