"Google doesn't exactly bubble to the top of the list of the top competitors we've got going in mobile. They might someday. But right now..." he said.
In other words, Microsoft doesn't bother trying to compete with someone until they're already beaten. It worked when they created Windows after they'd been beaten by the MacOS, but since then it's been far less successful (IE, Vista, search, Zune, etc).
Perhaps they should try competing with something while it's still new and weak? Maybe they could finally win again? Like when the 360 beat the PS3 by attacking it before it was ready?
Just a thought.