Ben Gilbert: evaluation

Transcript context

…But it wasn’t the original. The original iPhone didn’t have it. It was then later, I think the 3G? The mobile industry to this point had been how do I make the cheapest possible phone? Certainly not a scaled down version of a Mac, which is what the iPhone was. That was a completely different paradigm. This is a tiny computer, not a crappy embedded system that is optimizing for pennies. Apple basically said, we don’t care if it’s really expensive. We just think this is the user experience bar and we will figure the business model out. Eventually, my God, did they figure the business model out and the carrier subsidies were that innovation. But Windows Mobile was that old paradigm—embedded systems, cheap as possible hardware where a couple of cents either way determines whether your phone’s going to sell or not, so it was pretty shocking. iPhones start selling. They’re selling well. It’s 2008. Apps start coming out. It’s 2009. Sales start really picking up. Finally, Microsoft decides, hey, what we’re going to do is we have this old asset, Windows Mobile. We can repurpose some of that to make this new thing called Windows Phone. Unfortunately, everything we’re optimizing for is different. The new ecosystem expectation is a super high quality user experience. There’s this way that we used to work with all of our hardware partners, which basically said, we will make the software work on whatever. You can come up with the crappiest hardware you can think of and we’ll make it work. It’s like the Roku strategy, the way that they work with all the embedded TV makers. The new strategy had to be, we will dictate really intense hardware requirements because now with Windows Phone, we are making a promise to users to compete with the iPhone where Microsoft is backing that up. The Microsoft brand is first. We’re defining a really breakthrough new user interface called Metro that actually came from the Zune, which is funny that that’s its lineage. Now, how did it actually play out? Microsoft tried to use their existing business model. We will sell you an operating system, we will charge you a royalty. We will sell you OEM manufacturer an operating system.…

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