The tech giant's co-founder has reflected on how "mismanagement" and bad decisions over its mobile operating system meant that Google was able to become Apple's main competitor in the market.
Speaking at Village Global, he said: "In the software world, particularly for platforms, these are winner-take-all markets. So the greatest mistake ever is whatever mismanagement I engaged in that caused Microsoft not to be what Android is.
"That is, Android is the standard non-Apple phone platform. That was a natural thing for Microsoft to win. It really is winner take all. If you're there with half as many apps or 90 percent as many apps, you're on your way to complete doom.
"There's room for exactly one non-Apple operating system and what's that worth? $400 billion that would be transferred from company G to company M."
Google bought Android in 2005 for $50 million, and the initial focus for the company was beating Microsoft's effots with Windows Mobile, which was killed off along with Windows Phone.
Gates has now added: "It's amazing to me that having made one of the greatest mistakes of all time, and there was this antitrust lawsuit and various things, that our other assets like Windows and Office are still very strong, so we are a leading company.
"If we had gotten that one right, we would be the leading company, but oh well."