Microsoft's Windows Phone 7: A Step Forward, but a Long Way to Go

The release of Windows Phone 7 marks a significant improvement over its predecessor, but it may not be enough to reverse Microsoft's slipping market share in the smartphone market. Analysts are questioning whether the software giant can compete with the likes of Apple and Google, and some are speculating that Microsoft may need to acquire a Nokia or BlackBerry maker to get back in the game.

Key Takeaways:

• Microsoft's Windows Phone 7 software is an improvement over its predecessor, but may not be enough to reverse market share losses.
• Analysts believe Microsoft needs to get into the hardware business to compete with Apple and Google.
• Microsoft has considered buying Nokia or Research in Motion (RIM), but such talks are met with skepticism.
• The company's focus should be on making its services accessible to as many mobile users as possible, rather than trying to compete in the hardware space.
• Microsoft's market share in the smartphone market fell to 8.8 percent last year from 13.9 percent the year before, while Apple's share jumped to 15.1 percent from 9.6 percent.

Statistics:

• Microsoft's market share in the smartphone market fell to 8.8 percent last year from 13.9 percent the year before.
• Apple's market share jumped to 15.1 percent from 9.6 percent in the same time period.
• Microsoft pledged to work more closely with handset makers, such as HTC, Samsung, and Sony Ericsson, to ensure consistency across many phone models.
• Microsoft has $9.4 billion in cash and equivalents and $26.7 billion in short-term investments.

Sources:

• Reuters: "Microsoft's Ballmer says no big acquisitions planned" (no date specified)
• Canalys: "Smartphone Market Shares" (no date specified)
• unknown: "Microsoft's $47.5 billion bid for Yahoo" was reported in 2008.