If you thought life at Apple was a soap opera, take a look inside Microsoft. Jay Yarow covers the details for Business Insider:
Earlier today, Microsoft CEO Steve Ballmer announced a major shake-up in the company’s mobile and gaming ranks.
I wonder if the five year stagnant stock price, dropping market share for Windows smart phone OS (whatever it’s called these days), and billions in losses at XBox had anything to do with it.
Robbie Bach, a 22-year Microsoft veteran who oversaw the company’s mobile and gaming division, announced that he was retiring.
The day Microsoft CEO Steve Ballmer retires is the day Microsoft begins to recuperate. Microsoft lifer Bach is out. Probably because Microsoft lost HP, which dumped the Slate, and bought Palm and webOS instead. They wouldn’t replace him with another Microsoft lifer, would they?
Microsoft Under Seige
For Microsoft these are huge changes. J Allard is out. Bach plans to retire.
Microsoft decided not to replace him. Instead, Andy Lees, who was already overseeing mobile, will report directly to Steve Ballmer from now on.
Sure, having Steve Ballmer’s fingerprints on Microsoft’s mobile devices will turn things around.
Of the two jobs, the mobile position is more interesting. Xbox, while facing challenges, is in decent shape. It is second to Nintendo, it has Project Natal coming out this year, and it turns in a profit for the company.
That’s almost laughable. Wait. I am laughing. XBox has lost billions. Billions. Apple’s iPod touch is more profitable and may have sold more units.
Mobile, on the other hand, is withering at Microsoft.
Jay, you’re too kind.
As Google and Apple’s mobile operating systems grow, they present the biggest threat yet to Microsoft’s Windows hegemony. These operating systems are forming the basis of the next wave of computing—mobile and tablets. If Microsoft doesn’t have a viable mobile operating system, it faces big challenges in the next ten years.
Actually, Microsoft faces those challenges now. RIM, Apple, and Google Android have a huge head start. Microsoft’s mobile model is flawed. Smart phone makers can get Android for free. RIM and Apple make their own OS for their own products. Even HP is dumping Windows for mobile devices. Who will buy Microsoft’s Windows Phone?
Steve Ballmer has taken an extreme interest in the company’s mobile efforts.
That will surely inspire the troops (to duck for cover from flying chairs). Andy Lees has headed Microsoft’s mobile division for two years. How’s that working out?
The biggest projects Andy’s mobile team have worked on are the Kin and Windows Phone 7 operating system. The Kin launched to much fanfare, but seems to be a flop. We haven’t heard much about it since launch, and we have yet to spot them “in the wild.” Microsoft is not providing sales figures.
Not so good, huh? What seems to be the problem?
The problem with the Kin is that consumers pay the price of a full data plan but only get half a smartphone. This is something Andy should have seen coming when he was preparing to release the phone. The fact that he didn’t adjust Kin’s strategy is perplexing to us.
Any iPhone user would have told Microsoft that they have a flop on their hands. Oh, wait. iPhones are persona non grata at Microsoft. What else is he working on?
As for his other project, Windows Phone 7 sure looks promising, but by the time it hits the market later this year, it could look very old. Apple’s fourth iPhone will be on the market and Google will have the newest version of Android out, which will surely be stuffed with all sorts of goodies.
How can Microsoft catch up?
It’s up to Andy to make Windows Phone 7 amazing when it drops this holiday season. Can he do it? Andy has been exhorting his employees to “aim for the moon.” Sounds like a good advice. Microsoft is at the bottom looking up.
The problem with that perspective is that from the gutter a street light can look like the moon. Steve Jobs once said it was important for Apple to skate to where the puck will be, not to where it is. I don’t think Microsoft even knows what the game is, let alone know where the puck is.