When Steve Jobs took to the stage at MacWorld and announced the very first iPhone, heads around the world turned at just how innovative and consumer-friendly the product was. Microsoft’s initial reaction was dismissal, a decision that has hurt the company ever since.
Microsoft top dog Steve Ballmer’s reaction to the iPhone was typical. Dismissive, competitive, combative… His words have since come back to haunt him:
“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidised item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
But after years of development, Microsoft has now admitted that the iPhone was the catalyst it needed to develop change in its stagnating Windows Mobile platform. Talking to the New York Times, Corporate VP of Windows Phone Joe Belfiore admits that the iPhone was at the forefront of their thinking.
“Apple created a sea change in the industry in terms of the kinds of things they did that were unique and highly appealing to consumers,” Mr. Belfiore said in an interview at Microsoft’s campus here. “We wanted to respond with something that would be competitive, but not the same.”
But what’s even more interesting are the events that led to the development of the Windows Phone we know today. After seeing the iPhone explode out the gates and change smartphones forever, MS engineer Terry Myerson called a management meeting for the Windows Phone group that lasted seven hours. With a new prototype build of Windows Mobile, Myerson demanded they decide whether anything could be salvaged from the mobile OS. The answer was, for the most part, a resounding no.
Consequently, that led to the decision that Microsoft would start from scratch with its mobile operating system. It was a tough decision that allowed Android to grab massive amounts of market share as Microsoft was busy building its new platform.
Or as an ex-manager at Microsoft, Charlie Kindel described it in the Times piece, similar to the boulder that saw hiker Aron Ralston amputate his own arm:
“This boulder comprised of Apple and Blackberry rolled on our arm,” said Mr. Kindel, who left Microsoft last summer. “Microsoft sat there for three or four years struggling to get out.”
2012 is a big year for Microsoft. It needs to succeed with Windows Phone this year in a big way. With its hopes pinned on its partnership with Nokia and a huge marketing budget, 2012 is going to need to be huge for the up and coming mobile OS.