Microsoft risks becoming mobile market also-ran

Today's reports of a managerial shakeup at Microsoft -- specifically the departure of two key executives from the company's entertainment division that makes mobile phone software, Xbox game consoles, and Zune media players -- is a yet another strong indication of Redmond's internal turmoil. Robbie Bach is retiring as chief of Microsoft's entertainment group, and J. Allard, seen as one of the visionaries behind the successful Xbox platform, is also leaving the company.

Redmond has its share of problems in the rapidly evolving consumer tech market. While Microsoft continues to dominate in its two core, and highly profitable, software markets with Windows (desktop operating systems) and Office (productivity software), it has failed thus far to match the success of key rivals Apple and Google in the mobile arena.

In fact, recent developments indicate that Redmond is losing both market share and industry influence in the mobile space. Here are five examples:

• The market share for Windows Mobile OS is dwindling fast: According to the most recent comScore estimates on U.S. smartphone usage, Microsoft's market share fell to 15.7 percent in January 2010 from 19.7 percent in October 2009. Conversely, Google's share rose significant during that period--to 7.1 percent from 2.8 percent--a solid indication of the growing popularity of Android-based mobile devices.

• Windows Phone 7 is coming...but what's taking so long? Microsoft's upcoming mobile software, a dramatic iPhone-like overhaul of the company's smartphone OS, has garnered mostly positive buzz from pundits thus far. Problem is, Phone 7 devices aren't slated to appear until later this year, long after the expected release of the next-generation iPhone, as well as countless rollouts of new, cutting-edge Android handsets. Even if Phone 7 lives up to its pre-release hype, will it be too late to reclaim mobile market share for Microsoft?

• Tablets won't use Windows 7: The latest version of Windows is very good--but only for desktop and laptop PCs. It's not built for touchscreen-controlled devices, however, nor was it ever designed to be, regardless of whatever touch-friendly layers Microsoft may add to it. Redmond's PC industry pals know this, which is why they're passing on Windows 7 for their tablets. Dell's upcoming Streak slate, for instance, will run Android. And HP reportedly bought Palm for its WebOS software, a sophisticated mobile OS that's nicely suited to tablets and other portable devices.

• Microsoft's Courier tablet looked fantastic as a conceptual gadget, but a slickly produced video does not a shipping product make. The dual-screen device, which unfolded like a book and featured both touch and stylus input, could have been a contender. Then again, it's unclear whether Redmond was really ever serious about bringing Courier to market.

• Zune is a dead duck: As a handheld media player, Zune was quite good. But it never stood a chance against the iPod touch, primarily because it couldn't compete with Apple's App Store bonanza -- 200,000-plus apps and counting. Which media player would you buy?

Will managerial reshuffling help Microsoft become a player in the mobile market? If Redmond's Windows Phone 7's efforts don't pay off, the company will face yet another setback in its battle to catch up with Apple and Google.

Contact Jeff Bertolucci via Twitter (@jbertolucci) or at jbertolucci.blogspot.com.