Analysis: Microsoft’s Mobile Strategy is About Moving Past the Smartphone Defeat (Premium)

Microsoft CEO Satya Nadella has been on a whirlwind worldwide tour promoting his book, Hit Refresh. And an interview this week at the GeekWire Summit shed some new light on Microsoft's evolving mobile strategy in the wake of its Windows phone defeat.

You have to jump past the softball questions about cricket and the book, but at about 52:30 in the video version of the interview, we finally get to some meat. And a lot of words, often delivered in a very contorted way.

Which is of course why I exist. Let's dive in and get some clarity.

"How much of a disadvantage is it that you don't have [] on the smartphone right now?" GeekWire's Todd Bishop asks. "And how will you overcome it?"

"There are 300 million PCs sold [in a year], and a billion smartphones," he answers, framing the situation quite inaccurately: Actually, PC makers sell well under 300 million units per year now, with less than 270 million sold in 2016 and sales falling again this year. Meanwhile, hardware makers sold about 1.5 billion smartphones last year.

"Therein lies the math," he says. Therein lies the corrected math.

"I take inspiration, quite frankly, from our own history," he continues. "There was a time when the only hub for all things was the PC ... until it was not."

Sure. This view, of course, echoes what I've been writing and saying for a few years now.

"Today, of course, the convention wisdom is that, that's it, this is it, the last device [presumably the smartphone] that you will ever need and want and have. And if you [Microsoft] don't participate in it [the smartphone market] this second, there is no way. Except, the two companies you mentioned [Apple and Google] were born after ... or, the rebirth, at least, of Apple [with the return of Steve Jobs in late 1996] came not because of their PC share going up, it was mostly because of what they did with the iPod and then the iPhone later."

[Apple was founded on April 1, 1976, almost exactly one year after Microsoft was itself founded.]

"So the question really is, for us [Microsoft], how do we meet the reality of today and then invent our own future?" he says, finally getting to the point. "The way I think of that is, first, let's make sure our software and applications are used on iOS and Android. So we want to be first class. Most people don't remember this, but Office was there first on the Mac before Windows was even a platform. And so this is not new to us."

OK. That is a bit of a contortion since the "us" there is a company that bears zero relation to the one that brought Excel and then Office to the Mac 30 years ago. History is what it is. I think the better way to articulate this is that Microsoft has always done what is pragmatic. When the Mac was the only forward-leaning PC platform, it put new products on the Mac. When Windows was dominant, it focused mostly on Windows. And now that mobile is taking off, it is focusing there. This is the real consistency for the company: Going...