Speaking at Microsoft's financial analysts meeting today, CEO Steve Ballmer was refreshingly realistic about the company's struggles in smartphones and tablets. "Mobile devices. We have almost no share," he admitted on stage, before noting he didn't know whether to be enthusiastic over his admission or uncomfortably tense. "But I'm an optimistic guy, any time we have low market share sounds like upside opportunity to me." That upside opportunity is the key reason Microsoft moved to secure Nokia's phone business.

"The Nokia deal is a lot of things," said Ballmer. "One of the things it is, is a way to make sure we can capture the gross margin upside because we're making most of the investment today, that we need to make even owning Nokia." It's clear Microsoft wants to take some of the smartphone profits away from giants like Apple and Samsung, and Nokia is a key part of that plan.

Ballmer also admitted he regrets not focusing on phone earlier. "I regret there was a period in the early 2000s when we were so focused on what we had to do around Windows [Vista] that we weren't able to redeploy talent to the new device called the phone," explained Ballmer. "That is thing I regret the most." Ballmer has previously admitted that Windows Vista was his biggest regret at Microsoft, especially the code reset that the company performed mid-development.

"We know that we've gotta do a great job."

There was no further insight today on the future of Windows Phone, nor any additional details on the Nokia deal. However, Ballmer did reiterate his focus on the Windows brand during his talk. "Our device brand more than anything is brand windows," said Ballmer. "Windows Phones, Windows PCs, Windows tablets. And we have to make absolutely clear to people what the value proposition is." As part of Microsoft's reorganization, Joe Belfiore — who previously worked on Windows Phone exclusively — is now focused on phones, tablets, and PCs. As always, execution will be key to see where Microsoft heads with its mobile plans. "We know that we've gotta do a great job," admits Ballmer. "We're going to have to put time and energy not only into Windows PCs but brand Windows overall."