Bill Gates' $400 billlion mistake involves Windows Phone and Android

Bill Gates started Microsoft in 1975 along with Paul Allen and the rest is history. You don't get to be one of the wealthiest people in the world and build a trillion dollar company without making some great decisions over the years. At an event held by venture capital firm Villiage Global (via TechCrunch) Gates said that there is still one thing that bothers him to this day, and that is allowing Google to develop Android. He calls it the "standard non-Apple phone form platform." According to the entrepreneur, "That was a natural thing for Microsoft to win."

Gates put a value of $400 billion on Android and admits that "we did screw up a super important one." After all, Windows Mobile was running on smartphones for years before Android was developed. And the reaction made by Microsoft's then CEO Steve Ballmer to the introduction of the iPhone revealed how Microsoft missed a golden opportunity. Ballmer said that the iPhone wouldn't appeal to business customers because it doesn't have a keyboard. "We have our strategy. We have great Windows Mobile devices," the executive said in 2007 after Steve Jobs unveiled Apple's touchscreen handset. While Microsoft saw the iPhone as a goofy phone that required users to type on glass, Andy Rubin's team inside Google reportedly did a quick 180-degree turn and changed Android into an operating system for touchscreen phones. By the way, Ballmer admitted his mistake in November 2016.

The "app gap" kills Windows Phone

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"You know, in the software world, in particular for platforms, these are winner-take-all markets. So, you know, the greatest mistake ever is the whatever mismanagement I engaged in that caused Microsoft not to be what Android is, [meaning] Android is the standard non-Apple phone form platform. That was a natural thing for Microsoft to win.

It really is winner take all. If you’re there with half as many apps or 90% as many apps, you’re on your way to complete doom. There’s room for exactly one non-Apple operating system, and what’s that worth? $400 billion that would be transferred from company G [Google] to company M [Microsoft].

And it’s amazing to me, having made one of the greatest mistakes of all time — and there was this antitrust lawsuit and various things that, you know, our other assets, Windows, Office, are still very strong. So we are a leading company. If we got that one right, we would be the company. But oh well.

So this idea that just small differences can magnify themselves doesn’t exist for a lot of businesses. You know, if you’re a service business, it doesn’t exist. But for software platforms, it’s absolutely gigantic. And so that’s partly where you have the mentality of every night you think, ‘Am I screwing this up?’ And eventually, we did screw up a super important one."-Bill Gates, co-founder, Microsoft

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Windows Phone was launched in January 2010 to replace Windows Mobile and was used to power the Nokia Lumia line of smartphones. Despite being "buttery smooth," developers failed to support the platform and the so-called "app gap" meant that consumers had to stick with iOS or Android to keep their favorite apps. Microsoft took a swing at the hardware by buying Nokia's Devices and Services businesses for more than $7 billion back in 2013. This led the company to release its own Lumia devices, but they sold just as poorly. Earlier this year, Microsoft announced that support for Windows 10 Mobile will end on December 10th of this year, and urged users to switch to iOS or Android.

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The Microsoft Lumia 950XL, powered by Windows Phone

The Android operating system is believed to have an 85% share worldwide with Apple's iOS second.