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Here’s what Steve Ballmer didn’t get about the tablet revolution

Steve Ballmer
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Microsoft CEO Steve Ballmer is retiring after 13 years at the helm. Yesterday I argued that Microsoft's declining fortunes weren't his fault. The company's core PC business was being cannibalized by the mobile OS revolution, and companies have historically been bad at responding to disruptive innovations.

But Ballmer wasn't completely blameless. He does seem to have been hobbled by a limited understanding of the technological revolution that was destroying his empire. In 2010, Ballmer and Steve Jobs appeared at an All Things D conference hosted by Walt Mossberg. At that conference, held a few months after the introduction of the iPad, Jobs told Mossberg that he expected the PC to decline as people increasingly shifted to tablets. Mossberg asked Ballmer for his reaction.

"I think people are going to be using PCs in greater and greater numbers for many years to come," Ballmer said. "I think PCs are going to continue to shift in form factor. The real question is: What's a PC?"

Ballmer allowed that there's a "fundamental difference" between devices that are "small enough to be in a pocket" and those that are not. But, he said, "nothing people do on a PC today is going to get less relevant tomorrow." He predicted that "there will exist a general purpose device that does everything you want," because most households can't afford to own "five devices per person."

This was more than a semantic disagreement. Jobs thought tablets and smartphones represented a fundamentally new kind of computing platform, and he had his engineers design a new user interface from scratch optimized for small, cheap touchscreen devices. Ballmer saw the tablet as just another kind of PC, and so he built a single OS designed to work both on tablets and on desktop PCs.

Today, the results speak for themselves. Apple sold 14 million iPads in its most recent quarter. In contrast, estimates suggest that only about 2 million Windows-based tablets were sold last quarter.

Obviously, the causes of the iPad's success and Surface's failure are complex. But the philosophical disagreement between Jobs and Ballmer surely played a role in their products' divergent fortunes. Ballmer tried to build a device that could be all things for all people. That philosophy was echoed in May by Microsoft founder Bill Gates, who said that "a lot of [iPad] users are frustrated, they can't type, they can't create documents. They don't have Office there."

But the reality is that many consumers don't particularly want to do a lot of typing and document-creation on their tablets. And an operating system optimized to work well with a keyboard and Microsoft Office may not be optimized for the distinctive capabilities of a touchscreen interface.

In contrast, Steve Jobs recognized that building a great touchscreen interface required starting with a clean slate. And that's what Apple did: First it designed an entirely new interface for the iPhone, then it scaled it up for the iPad. Apple didn't try to make iOS compatible with legacy Mac OS X applications. The result was a clean, simple interface that was easy for new users to learn and worked well on large and small screens alike.

To be fair, Ballmer wasn't the only one who didn't understand what Jobs was doing with the iPad. "I don’t understand who this product is marketed for," I wrote the day the iPad was released. There are millions of people like me who need the full capabilities of a desktop PC. But I failed to appreciate that there are hundreds of millions of people who don't. And for them, the simplicity and low cost of a "pure" mobile OS is a better choice.