Now that Gates is advising Nadella, I can imagine the conversations revolve around that fact that Microsoft never made the actual platform that ran Windows. Phones are a bit different, but logically is Android really so different from IBM, Phoenix, AMI, Award, etc., BIOS? Gates and Nadella probably think of Azure as Windows, sitting on top of Android or iOS instead of whatever BIOS, with Office 365 and every other cloud app being the equivalent of desktop apps in the PC era. I doubt they really care if Microsoft services are running on a Windows Phone in the long term.
Another observation: I have a Nexus, iPhone and Windows phone. My observation is that the iPhone has the best app implementation, the Nexus / Lollipop is close and "good enough", and that the Windows Phone is obviously second fiddle in the app world. Windows Phone has most of the apps I need, but not all, and the other problem is that even if Windows Phone has the apps I want, they are not maintained as well as the iOS and Android versions. That said, I am somewhat surprised to say how much better I find the Windows Phone UI to be over Android and iOS. I am guessing individually downloaded apps will matter less and less and integrated services more and more in the future, so Microsoft may very well achieve the same thing in the mobile world as they did in the PC world.