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Microsoft CEO Satya Nadella speaks at the company's annual shareholders meeting. (GeekWire Photo.)
Microsoft CEO Satya Nadella speaks at the company’s annual shareholders meeting. (GeekWire Photo.)

“That won’t work.”

That’s what former Microsoft CEO Steve Ballmer said while listening to current Microsoft CEO Satya Nadella describe the company’s strategy for getting more apps onto Windows Phone. Ballmer, who is still the company’s largest individual shareholder, made the comment to Bloomberg reporter Dina Bass in the audience at the company’s shareholder meeting yesterday.

Ballmer’s comment has been widely reported, along with his criticism of Microsoft’s cloud revenue reporting practices. So what exactly did Nadella say about apps to prompt such a critical observation from his former boss? We went back to our recording of the meeting to get it down verbatim. Here is Nadella’s exchange with a shareholder on the issue.

Shareholder: With applications on the Windows Phone, I find it strange that things like the Starbucks app is not available on the Microsoft phone, and I would think that investing some development money into making the apps available that everybody sees with the Apple store and the other store, it’s like, why would I get the Windows Phone when I can’t do all this stuff?

Nadella: On the application side, the goal we have is, look, we don’t think of our phones to PCs to consoles and even to HoloLens as all these separate platforms with separate marketplaces with separate applications, because the powerful concept of Windows and Windows 10 is that it’s one application platform, one store for developers, that then should attract developers to build once and then have them run across all of Windows. That’s the value proposition: for Starbucks, or for anyone else, to be able to write it and get the returns for that investment on the Windows platform.

This is new. We’ve had different efforts in the past but we now have one store and one app platform. Give us time to keep focused on it. We are seeing, for example, for the first time on the core of Windows desktop, with 100-plus million users, active engagement, the fact that they can find these Windows applications in the store, some of the developers like Netflix are seeing more engagement for the Netflix app vs. the web. So that’s an early indicator of data that I think will entice more of these developers to build more of these applications.

But we are very focused on that challenge. We recognize how the challenge influences choice on the phone. But we do need to think of the unified platform and make sure organically — instead of doing one-off deals to get one app — we’ve got to organically build momentum for the platform and that’s what we plan to do.

Ballmer’s contention, according to Bloomberg, is that Microsoft should allow Windows Phones “to run Android apps” in order to attract more developers. A plan to do just that has reportedly stalled inside the company. Microsoft has significantly scaled back its Windows Phone ambitions under Nadella.

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