Way back in 1996, I got my hot little hands on what most pundits thought would be the future of computing: a Microsoft-designed handheld computer.

Back then, many laptop computers still weighed as much ten pounds--heavy as full daypack. My gorgeous little handheld weighed less than a pound, and at 4" x 8" x 1" (with clamshell closed) could be easily and safely carried in a suitcoat pocket.

The device ran the Windows CE, the first in a long line of Microsoft operating systems designed to run on small devices. When it was released in 1996, industry buzz was that Microsoft had got it right where Apple (with the Newton) had got it wrong.

For a couple of months, owning a Windows CE device was a true status symbol. I remember using my brand-new device on an airplane when the stewardess, passing by, took one look at it in my lap and said, loud enough for the entire cabin to hear: "Wow, that's the smallest one I've ever seen!"

Anyway, Windows CE never quite caught on. Microsoft renamed it, renamed it again, recoded it, renamed it, dithering with dead-ends like the Pocket PC and the Zune. Meanwhile, Apple released the iPod and iPhone and Google released Android.

Microsoft soldiered on.

As recently as 2014, Microsoft was touting that Windows Phone (as it was then called) was achieving double-digit market share in Europe. That was the year that Microsoft purchased Nokia for $7.2 billion, a sum that the company was eventually forced to write off as a bad investment.

Microsoft soldiered on.

As recently as Spring of 2017, Microsoft believed, based on public announcements at the time, that Window 10 Mobile (as it was now called, having been renamed once again) would someday become, if not the dominant OS, at least a significant player in the lucrative smartphone market.

Microsoft soldiered on.

By mid 2017, Microsoft's market share in smartphones had plummeted to only .03%, meaning that only 3 phones out of each 10,000 sold were running Microsoft's mobile operating system.

Then disaster struck. No less a personage than Bill Gates himself publicly admitted that he used an Android phone rather than a Windows one. The writing was on the wallpaper.

Now today and at long last, according to the BBC, the executive in charge of Microsoft's Windows 10 business announced that he, like Bill, had also switched to Android and that "developing new features and hardware for the Mobile version of the OS was no longer a focus."

And finally the war was over.

How did the once-unassailable Microsoft fail so utterly in what was clearly a strategic market? Why did Microsoft continue to flog a horse that had been dead for a long time and a zombie for long before that?

The most popular explanation for Microsoft's failure is the "chicken and egg" dilemma. Without sufficient market share to attract application developers, Microsoft's mobile devices could never gain enough customers to create the market share that would attract application developers.

However, Microsoft had the same problem with the Xbox game machine, released only five years after Windows CE. With the Xbox, Microsoft solved the "chicken and egg" dilemma by throwing money at it, using its ample cash reserves to provide incentives and acquire game developers, resulting in genre-setting software like the award-winning Halo. Today, there are about 30 million installed Xboxes, a market share second only to Sony's PlayStation.

Why didn't Microsoft do the same with its mobile operating system.

The answer is probably corporate politics.

If I recall correctly, Windows CE was developed and launched within Microsoft's core Windows business, making it prey to constant sniping. By contrast, the Xbox was launched in Microsoft's hardware division, an organizational outlier responsible for the company's relatively tiny but profitable keyboard and mouse business.

Thus, while Windows CE was forced to constantly fight a rearguard action against its political foes, the Xbox group enjoyed enough organizational freedom to do what was necessary to make the product successful.

It's sobering to note that the Xbox--launched 16 years ago--was Microsoft's last success in a new market. Despite mountains of cash and dozens of acquisitions, Microsoft has failed to expand beyond its core software businesses: Windows (for PC) and Microsoft Office.

But that's another issue. For now it's farewell to Windows CE and all its subsequent manifestations. Alas, we hardly knew ye.

Published on: Oct 9, 2017
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