Bill Gates

Embedded systems, cheap as possible hardware were a couple cents either way determines whether your phone's going to sell or not. And so it was pretty shocking. So iPhones start selling. They're selling well. It's 2008. Apps start coming out. It's 2009. Sales start really picking up. And finally, Microsoft decides, hey, what we're going to do is we have this old asset, Windows Mobile.

Embedded systems, cheap as possible hardware were a couple cents either way determines whether your phone's going to sell or not. And so it was pretty shocking. So iPhones start selling. They're selling well. It's 2008. Apps start coming out. It's 2009. Sales start really picking up. And finally, Microsoft decides, hey, what we're going to do is we have this old asset, Windows Mobile.

We can repurpose some of that to make this new thing called Windows Phone. But unfortunately, everything we're optimizing for is different. The new ecosystem expectation is a super high quality user experience. Yeah. And so there's this way that we used to work with all of our hardware partners, which basically said, we will make the software work on whatever.

We can repurpose some of that to make this new thing called Windows Phone. But unfortunately, everything we're optimizing for is different. The new ecosystem expectation is a super high quality user experience. Yeah. And so there's this way that we used to work with all of our hardware partners, which basically said, we will make the software work on whatever.

You can come up with the crappiest hardware you can think of and we'll make it work. It's kind of like the Roku strategy, the way that they work with all the embedded TV makers. And the new strategy had to be, we will dictate really intense hardware requirements because now with Windows Phone, we are making a promise to users to compete with the iPhone where Microsoft is backing that up.

You can come up with the crappiest hardware you can think of and we'll make it work. It's kind of like the Roku strategy, the way that they work with all the embedded TV makers. And the new strategy had to be, we will dictate really intense hardware requirements because now with Windows Phone, we are making a promise to users to compete with the iPhone where Microsoft is backing that up.

The Microsoft brand is first, and we're defining a really breakthrough new user interface called Metro that actually came from the Zune, which is funny that that's its lineage. Now, how did it actually play out? Microsoft tried to use their existing business model. We will sell you an operating system. We will charge you a royalty.

The Microsoft brand is first, and we're defining a really breakthrough new user interface called Metro that actually came from the Zune, which is funny that that's its lineage. Now, how did it actually play out? Microsoft tried to use their existing business model. We will sell you an operating system. We will charge you a royalty.

Correct. And you sell that phone. People want good phones now, so you can probably generate some nice margins on that good phone because the iPhone really set the bar. There's just one problem with trying to maintain your old business model, and It's that you don't have the same competitive set that you used to. You now have Google. Google has acquired Android.

Correct. And you sell that phone. People want good phones now, so you can probably generate some nice margins on that good phone because the iPhone really set the bar. There's just one problem with trying to maintain your old business model, and It's that you don't have the same competitive set that you used to. You now have Google. Google has acquired Android.

Google has transformed Android from a BlackBerry clone into an iPhone clone. The software is open source. And so Google's value proposition is they go to all those same manufacturers that Microsoft used to work with, HTC, Motorola.

Google has transformed Android from a BlackBerry clone into an iPhone clone. The software is open source. And so Google's value proposition is they go to all those same manufacturers that Microsoft used to work with, HTC, Motorola.

Deal point number one, here you go. It's free. Deal point number two, you can even have the source code. Deal point number three, we aren't Microsoft. Look at what they did to the PC makers. Do not let them do that to you. You know those PC makers? They make no money. Zero the profit dollars in the value chain accrue to these PC makers. They all accrue to the software vendor.

Deal point number one, here you go. It's free. Deal point number two, you can even have the source code. Deal point number three, we aren't Microsoft. Look at what they did to the PC makers. Do not let them do that to you. You know those PC makers? They make no money. Zero the profit dollars in the value chain accrue to these PC makers. They all accrue to the software vendor.

It's literally the same people who did that to the PC makers. Why would you let them do that to you? And remember, in this mobile world, every cent matters. And so Microsoft is trying to ask for, you know, whatever it is, some single digit number of dollars for a licensing fee to the U.S. I mean, I think I'm undershooting, but let's even say it's five bucks.

It's literally the same people who did that to the PC makers. Why would you let them do that to you? And remember, in this mobile world, every cent matters. And so Microsoft is trying to ask for, you know, whatever it is, some single digit number of dollars for a licensing fee to the U.S. I mean, I think I'm undershooting, but let's even say it's five bucks.

That is a mountain of difference between zero dollars and five dollars.

That is a mountain of difference between zero dollars and five dollars.

In the total bill of materials of these things. Exactly. Exactly.

In the total bill of materials of these things. Exactly. Exactly.