Microsoft didn't tune into the importance of mobile phones early enough, contributing to Windows Phone's tiny market share, which sits under 1%. CEO Satya Nadella spoke with the Wall Street Journal and admitted there's "no question" Microsoft missed the rise of smartphones.

Given the latter part of that statement, it appears Microsoft recognizes it'll never be a major smartphone company, so it will instead focus on other kinds of products and specialized smartphones that fill niches.

We have devices which are phones today but the place where we are focused on, given where the market is, is what is the unique thing that our phone can do. We have a phone that in fact can replace your PC, the same way we have a tablet that can replace your laptop. Those are the categories that we want to go create.

Microsoft has turned its attention to other industries, like AR, to make sure it doesn't miss another big opportunity.

If anything, the lesson learned for us was thinking of PC as the hub for all things for all time to come. [That] was one of the bigger mistakes we made.