The headlines coming out of Microsoft’s annual shareholders meeting this morning focused on Steve Ballmer’s comment that Microsoft and its partners are selling four times more Windows Phones than at the same point last year.

However, the company isn’t giving actual numbers — a public relations homage, of sorts, to’s preferred approach.

The more interesting comment, in my view, was Ballmer’s response to the shareholder who asked what Microsoft is doing to create an atmosphere that encourages and supports real innovation. The shareholder cited the example of Bill Gates, many years ago, standing in front of an audience and declaring tablets the future of computing, only to see Apple come along and realize far bigger success with the iPad.

Ballmer’s response showed just how much things have changed for the company. Here’s an excerpt.

Not because we don’t have good hardware partners, but sometimes getting the innovation right across the seam between hardware and software is difficult unless you do both of them … which is what we really did with Surface. We’re innovating on the seam between hardware and software. Maybe we should have done that earlier, maybe that tablet would have shipped sooner, but we were also building a good business, working with those partners and serving a lot of needs. What we said to ourselves now is there’s no boundary between hardware and software that we will let build up as an innovation barrier. You see it with Kinect, and you see it with Surface. We’ve done this a little differently in the phone case, where we actually specified a pretty complete set of subsystems in the phone, and then our partners have innovated on top of that. So we’re doing this from a number of different ways from a hardware perspective. If you look from a pure software perspective, I feel pretty good about our level of innovation stacked up against anybody, and from a hardware-software perspective, we’re really pushing forward aggressively on that boundary.

His comments won’t be a surprise to anyone who has been watching the company over the past year, but it’s a gigantic change from the Microsoft of a few years ago, when the company was more content to leave hardware development exclusively to its partners.

Even though Ballmer was careful to say that Microsoft is doing things a little differently with Windows Phone, the model is there with the Surface tablet, and the nature of Ballmer’s comments overall make me more inclined to believe that the company will come out with its own phone.

Previously: Ballmer says Windows 8 users ‘get it, and like it’

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  • B_Sack

    Damn right. OEM’s have been lazy over the last couple decades. Time to light a fire under their arse.

    • rob hammond

      the dell ubuntu laptop looks pretty sick.

  • AG

    BillG waved around a piece of shiny plastic with a mockup UI pasted on the front of it. It was nothing more than that. Afterwards the company went about its usual strategy of twiddling its thumbs depending on tired partners while opportunity and technology passed it by.

  • Richard A McAllister

    windows 8 pro big mistake by microsoft

  • Aaron Evans

    Microsoft sold a Windows Phone last year?

    Amazon doesn’t release Kindle sales because they are abysmal.

    If Ballmer were as passionate as Bezos, in about 4 more years he might be stuck in the same position of having spent billions on a product that is starting to succeed as a marketplace app on other mobile devices after sinking more than a billion dollars into hardware over 5 years, but unable to talk about the numbers because he lied about them for so long before actually finding a product after a pivot.

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