While talking to ZDNet's Mary Jo Foley, Nadella stressed that despite recent announcements the company is still focused on its mobile-first strategy, and in fact, the Windows 10 free upgrade offer was meant to boost the Windows Phone platform.
"The free upgrade for Windows 10 is meant to improve our phone position. That is the reason why I made that decision. If somebody wants to know whether I'm committed to Windows Phone, they should think about what I just did with the free upgrade to Windows," he said.
Nadella explained that if developers make apps for Windows 10 desktop, considering it is a free upgrade for consumers, it could very easily be turned into a Windows Phone apps, thanks to Microsoft's Universal Windows app platform.
(Also see: Microsoft Says Premium Lumia Smartphones With Windows 10 Coming Soon)
"Universal Windows apps are going to be written because you want to have those apps used on the desktop. The reason why anybody would want to write universal apps is not because of our three percent share in phones. It's because a billion consumers are going to have a Start Menu, which is going to have your app. You start the journey there and take them to multiple places. Their app can go to the phone. They can go to HoloLens. They can go to Xbox. You talk to somebody like Airbnb. It might be more attractive, given our three percent share on phone, for them to actually build something for the desktop and for the Xbox," he said.
Nadella also repeated what he announced last week in his email to employees, the company will launch one or at most two models each year in three different categories catering to affordable segment, business customers, and premium end or the flagship segment. Explaining further about the three segments, Nadella said, "Those three segments, I picked them because we have something unique to contribute. For people who love Windows, we'll have a flagship device. It's not just a flagship device, but it also supports things like Continuum. For business customers, it's about custom apps they want to deploy onto those endpoints with management and security. For the value smart phone segment, I want to focus on where we can put Office and our communications and Skype."
(Also see: Microsoft to Cut 7,800 Jobs, Reorganise Phone Division)
He also spoke about how the company intends to sell Windows 10 Mobile smartphones, with or without manufacturer partnerships. "If there are a lot of OEMs, we'll have one strategy. If there are no OEMs, we'll have one strategy. We are committed to having the phones in these three segments. And I think the operational details will become clear to people as they see it," he added. Nadella also pointed to Terry Myerson's recent announcement, where he revealed Microsoft will soon launch "premium Lumias designed for Windows 10."
While talking about Windows Phone, Nadella also compared Microsoft to Apple just before the company "regeneration started with colorful iMacs". He said, "You've got to remember even the Apple regeneration started with colorful iMacs. So let us first get the colorful iMacs. I think with what we're doing with Lumia, we're at that stage. I want to do good devices that people like, and then we will go on to doing the next thing and the next thing."
He also talked about how Windows 8 missed to push the Store and how with Windows 10, the Redmond giant believes it can change how people discover Store. "Why then make all these changes to the Start Menu with Windows 10? It's not because I just want to bring back the old. It's because that's the best way to improve the liquidity our store. Windows 8 was great except that nobody discovered the store. In Windows 10, the store is right there and done in a tasteful way," he said.
(Also see: Microsoft to Now Launch Only Up to 6 Smartphones Each Year: Report)
Talking about Microsoft's HoloLens augmented-reality technology, Nadella stressed that the company wanted to push the device's boundaries. "I did buy Minecraft to create a new genre of gaming for mixed reality. We bought Minecraft for many reasons: because it's the number one PC app; it's the number one console app; it's the number one paid mobile app on iOS and Android. I wanted a hit game even for the new medium of mixed reality. And we will have that. Gaming will always be a scenario and there will be other entertainment broadly. But, with the V.1 of HoloLens, I want us to push a lot more of the enterprise usage," said Nadella.
While discussing plans about a partnership with Google, Nadella said that Microsoft would love if YouTube app was built for the Windows Phone.
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