Microsoft CEO Satya Nadella has admitted that the firm's mobile efforts have all but flopped, in the first major admission that its efforts in this area are all but over.
Speaking at the opening dinner of Wall Street Journal Live, Mr Nadella said, "We clearly missed the mobile phone, there's no question," adding. "Our goal now is to make sure we grow new categories."
"The lesson learned for us, was thinking of PC as the hub for all things for all time to come. It was perhaps one for the bigger mistakes we made."
The company’s Windows Mobile 10 platform continues, but currently there are no new phones in production using it. A phone under the Surface moniker is expected, possibly soon, as part of a glut on announcements tomorrow in an attempt to rescue it.
In the meantime, the operating system, beset by delays, has just one percent of the mobile market.
Nadella explained that he saw the future in creating a niche using Continuum as the company’s secret weapon, in the hope that people would buy devices that would turn into full PCs when connected to a monitor and keyboard.
The focus, as he sees it, is on virtual reality, citing the soon-to-launch Hololens as the beginning of the “Ultimate Computer”, emphasising the importance of going beyond the shrinking desktop market.
It’s not completely clear what Microsoft is planning to offer at its event in New York tomorrow, but there is speculation that the Surface Phone and Surface Mini may be on ice while the company prioritises profitable areas like XBox and the burgeoning Hololens.
While Microsoft missing the mobile market was a big blow to the company's long term amibition, one area where the business is performing much better is the cloud, with its Azure platform seeing strong interest, boosting revenues and its share price.
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