Microsoft’s troubles in the Smartphone space didn’t start with Google Android, another attractive, user-friendly operating system for mobile devices.
Google is just another competitor – in a market dominated by established players.
Apple has raised the bar higher concerning usability and the quality of its intuitive user interface, RIM with Blackberry still has probably the most business-user-centric device and Nokia is pushing hard to position their all-in-one, powerful N-series gadgets.
Microsoft has lost ground in the past 18 months, in particular regarding user attractiveness.
OEM partners have started to put non-Microsoft software on Windows Mobile devices, e.g. the Opera (!) web browser on the HTC Touch.
They have also started to ship their own user interface to overcome the slow and cumbersome standard UI of Windows Mobile 6.1.
The recently announced Windows Mobile 6.5 will probably not be enough to close the gap. Windows Mobile 7 is only in the roadmap.
A big, sustained effort is required by the software giant not to fall too far behind in the Smartphone market.