'One of the most difficult decisions I made': Microsoft CEO Satya Nadella admits to one wrong decision he regrets

Microsoft CEO Satya Nadella recently admitted in an interview with Business Insider that the company’s exit from the mobile phone business could have been handled better. He becomes the third Microsoft chief to have admitted that the company could have done better by focusing on the phone category.

When asked if there was a wrong decision that he regrets, Microsoft CEO Satya Nadella said, “The decision I think a lot of people talk about – and one of the most difficult decisions I made when I became CEO — was our exit of what I’ll call the mobile phone as defined then. 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.”

This statement comes after a series of missteps in Microsoft’s mobile strategy. The company wrote off $7.6 billion related to its acquisition of Nokia’s phone business just over a year after Nadella took over from former CEO Steve Ballmer in 2014. A few years later, Microsoft confirmed that Windows Phone was dead.

Former Microsoft CEO Bill Gates had previously admitted that his “greatest mistake ever” was Microsoft losing to Android. Similarly, former CEO Steve Ballmer regretted not focusing on phones much earlier, stating in 2013, “I regret there was a period in the early 2000s when we were so focused on what we had to do around Windows [Vista] that we weren’t able to redeploy talent to the new device called the phone.”

Despite these setbacks, Microsoft has shifted its focus towards developing apps for Android and iOS over the past decade. The company continues to update its Phone Link app to connect Android and iPhone handsets to Windows and maintains a close relationship with Samsung to ensure its mobile Office apps are preinstalled on Samsung’s Android handsets.

Timeline of Microsoft's Attempt at Smartphones aka Windows Phones

1. The first iteration of Windows Phone as we know it was announced at MWC 2010 in Barcelona. 2. Windows Phone 7 was widely regarded as a great base for an OS platform, featuring a 4 x 2 layout of solid-coloured live tiles. 3. The first Lumia device running Windows was launched in November 2011-- Lumia 800 3. In 2012, Windows Phone 8 succeeded it, replacing the Windows CE-based kernel of Windows Phone 7 with the Windows NT kernel used by the PC versions of Windows. 4. In 2014, Microsoft released the Windows Phone 8.1 update, which introduced the Cortana virtual assistant, and Windows Runtime platform support to create cross-platform apps between Windows PCs and Windows Phone. 5. In 2015, Microsoft released Windows 10 Mobile, which promoted increased integration and unification with its PC counterpart. 6. Despite these efforts, interest in Windows Phone from app developers began to diminish by mid-decade. 7. Windows Phone was officially discontinued in October 2017 when Microsoft’s corporate vice president, Joe Belfiore, confirmed that Microsoft would no longer sell or manufacture new Windows 10 Mobile devices. The existing devices received bug fixes and security updates only, ending for the latest devices in December 2019.