There's a reason Microsoft's CEO Steve Ballmer is stepping down. The tech giant, once quite possibly the most powerful company on the planet, has fallen by the wayside -- still relevant, but increasingly less so. The rise of mobile devices, tablets, and smartphones powered by Google's Android and Apple's iOS have weighed on the demand for traditional Windows PCs.

Ballmer has made a fair amount of gaffes over the years, but three in particular stand out. Taken in context, they explain exactly why Microsoft lost its operating system monopoly.

Ballmer on the iPhone: 

$500, fully subsidized with a plan?!... That is the most expensive phone in the world, and it doesn't appeal to business customers because it doesn't have a keyboard.

Perhaps nothing was more detrimental to Microsoft's mobile effort than Ballmer's lack of vision. At launch, the iPhone was expensive, and its lack of physical keyboard broke with the industry norm. Yet that didn't stop it from catching on -- including among business users, much to the chagrin of rival BlackBerry.

Ultimately, Microsoft would go on to copy Apple's iPhone operating system with Windows Phone 7, and then 8, but by then, it was too late. Today, Microsoft has about 4% of the worldwide smartphone market -- and that's up significantly from last year. Meanwhile, Apple has 13% of the market, but the iPhone accounts for more than 40% of the smartphones sold in the U.S.

Microsoft isn't giving up on smartphones. In fact, by buying Nokia's handset business, Microsoft is taking its Apple mimicry to the next level, moving to make its handsets in-house. Perhaps Microsoft will catch up, but I doubt it -- now six years behind Apple, the company lacks the robust ecosystem  and market momentum enjoyed by its competitor.

Ballmer on Google's Android:  

It is very hard to be excited... about the Android phones. Apple is a good competitor, different kind of competitor.

Ballmer's take on Android was equally as dismissive. By this point, he was forced to recognize Apple as a legitimate threat, but chose to deride Android as a confusing mess. During that interview, Ballmer asserted that you had to be a "computer scientist" to use a phone running Google's operating system.

Evidently, there are lot of computer scientists out there. Android now accounts for 79% of the smartphones sold worldwide, and it's particularly popular in emerging markets like China and India.

Ironically, it was Google that took a page out of Microsoft's playbook -- like Windows and the traditional PC, Google lets a variety of hardware manufacturers produce Android devices. That's resulted in Android handsets of every shape and size, available at nearly any price point. Along with that variety has come market share dominance.

Ballmer on who's important: 

Developers! Developers! Developers!

Perhaps Ballmer's most famous quote of all helps to explain precisely why Windows Phone is struggling: It has no developers.

As Ballmer understood when he uttered those words years ago, an operating system is only as good as the applications that run on it -- for so many years, Windows was dominant because it had all the developer support in the world. A given application might not run on a Mac or Linux machine, but it almost assuredly would work on a Windows computer.

The reverse can be said for Windows Phone. Microsoft's handset operating system continues to lack many major apps, including Instagram, Flipboard, and HBO Go. In time, these apps may see a Windows Phone release, but the companies behind them aren't likely to spend too much time supporting Microsoft's platform.

Moreover, any new hit apps that happen to emerge -- like a new game or social network -- probably won't see a Windows Phone release for months, if ever. Prospective Windows Phone buyers must accept that the apps available to them will be very limited, which is likely why not many people buy Windows Phones.

Microsoft's Windows business is slipping away
PC sales data has been terrible all year. Most recently, research firm Gartner reported that PC shipments fell 8.6% in the third quarter -- the sixth consecutive drop on record. While traditional Windows PCs won't disappear overnight, it's clear that mobile devices are taking a toll on them.

Microsoft's failure to capitalize on these trends can be traced back to Steve Ballmer. His inability to appreciate Apple's iPhone, understand the appeal of Google's Android, or remember the importance of developers doomed Microsoft's mobile phone effort.

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The article 3 Steve Ballmer Quotes That Explain Why Microsoft's Mobile Effort Failed originally appeared on

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google. It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Out goes Steve Ballmer after buying mismanaged Nokia with a history of bungling CEOs & BoDs, with a possibility of Stephen Elop dropping into a power seat. Bill Gates baled out at the right time. With the high IQ of Bill Gates, did he envisage the downhill run of Microsoft?

October 18 2013 at 12:13 PM Report abuse rate up rate down Reply

Unfortunately, I purchased one of Balmer's failures, an Xbox HD Player.

October 17 2013 at 11:22 AM Report abuse rate up rate down Reply

Never failed, huh? Can you say Zune?

October 16 2013 at 7:10 PM Report abuse rate up rate down Reply
Michael Gentry

Microsoft and Mr. Ballmer has never failed and they never will. The only thing I liked about your article was the very end of it which made it more then worth reading.

October 16 2013 at 3:17 PM Report abuse rate up rate down Reply

My job interview at Microsoft yesterday can tell you exactly why Microsoft is failing. As I said on previous posts, I was rejected by a dufus without a college degree who was really interested in the Video Game I published in 2004, Viking Raider. He also rejected me because I did not know everything about a \"static\" keyword, as 15% of the interview was spent grilling me about this irrelevant subject. How much time in the 4 years of development of Viking Raider was spent worrying about \"static\" keywords? None! The fact is, there were no technical issues that were not solved. The problem with Viking Raider had nothing to do with technology, it was sales and marketing. The dufus at Microsoft, who will only ever play other peoples games, is totally clueless. To reject an Electrical Engineer with 30 years of experience and a game title under his belt was yet another blunder, as I will never work at Microsoft again.

October 16 2013 at 10:39 AM Report abuse rate up rate down Reply

As a Software Quality Assurance Engineer with 30 years of experience who has worked at Microsoft, I always said that running around like an idiot and sweating up a $1000 silk shirt does not improve the quality of your software. Balmer is moron in a sea of morons!

October 16 2013 at 10:23 AM Report abuse rate up rate down Reply
Marius Bancila

Of course developers are important. Great apps sell the platform. Who's writing the great apps? Sales people? The marketing department? I don't think so.

October 16 2013 at 6:08 AM Report abuse rate up rate down Reply
Sathish Natarajan

I don't see the limited number of apps as problem. I have both android (tablet) and windows (phone), My problem in android is that “which app I should use?”, for a given purpose there are hundreds of apps and most of them are junk. The android system of review and suggested apps was not good enough. So, I had buy tech magazines to see reviews of the app. If Microsoft concentrate the top developer in android and give add on to their tools just to make development of apps for all the OS. There one cannot try to monopolize, they need to contribute to the open source project and integrate the windows 8 and phone OS with open source development tools. As hobby developer I don’t like to pay for development tools, I prefer free ones (open source). I have my worries about windows phone getting virus or blue screen error than having limited number of apps. Too many apps makes the life harder in differentiating between good and junk ones. My guess is that Microsoft is heading for right direction, with Azure cloud and surface tablets and Nokia mobiles. Personally I would like to have all my computing power resides in some place and I can use it through tablet or mobile. In that case I can use as much as computing power i want (off course depends on how much money I have). I can have whole wiki, freebase, Google books or digital library at my fingertip. I hope in future better search algorithms evolve and makes our life easier and help to improve the human productivity.

October 16 2013 at 5:06 AM Report abuse rate up rate down Reply
RK Tor

Because you can't polish a turd.

October 16 2013 at 3:23 AM Report abuse rate up rate down Reply
Ajay Babu

Despite of its(microsoft) high brand value microsoft failed to re-position itself in the global market(especially in India and China) whereas Apple could.
Apple created excitement (branded) among people in such a way that those who where able to get new version of apple are very lucky(despite of the its new applications and other features). Which is very clear that releasing/supplying less number of phone\'s(goods/products/services) would create more brand value(only after proper positioning in market initially) @ higher price.

October 16 2013 at 2:19 AM Report abuse rate up rate down Reply