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.
Apparently, much of that market share increase came at Microsoft's expense. Microsoft finally unveiled the next generation Windows Phone 7 platform, but that hasn't helped stop the bleeding for the current Windows Mobile devices. In fact, the lack of a path to upgrade current devices to the new Windows Phone 7 operating system when it arrives, and the lack of backward compatibility to run current Windows Mobile apps probably mean Microsoft can expect sharp losses in the next quarter as well.
Analysts have generally praised Windows Phone 7, which is a completely new platform from the ground up rather than an incremental evolution of the waning Windows Mobile operating system. The market is hungry for the next generation mobile operating system from Microsoft, and hopefully Microsoft will rebound and reclaim some of its lost smartphone market share once the new platform arrives.
Microsoft Windows Phone 7 devices are not expected to be available until later this year--probably just in time for the holidays. That means the next quarter will once again be a battle between Android and iPhone, and Android will most likely continue to be the benefactor of Microsoft's plummeting market share.
If Google and Microsoft both have another quarter like this one again, Android could actually jump past Windows Mobile to take third place when the next comScore results come out.
Yesterday's reports of a managerial shakeup at Microsoft - specifically the departure of two key executives from the company's entertainment division that makes windows mobile phone software, Xbox game consoles, and Zune media players - is a yet another strong indication of Redmond's internal turmoil.