Microsoft (NASDAQ: MSFT) Needs Improvement in Integration

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According to Silicon Alley Insider, Microsoft Corporation (NASDAQ: MSFT) finally admitted that its mobile business needs some work.

At Microsoft's analyst day in Seattle, Robbie Bach acknowledged in his finest business school jargon that the company hasn't "done as good a job as I would like building relationships and getting the right integration with our hardware partners," and vowed to improve: "You’re going to see dramatic improvement in integration." He added, "You’ll see our execution rhythm pick up and the quality of our execution improve."

But the reality of the situation is that Apple is running away with the Smartphone mindshare in the U.S., and none of the handful of mobile software companies has expressed any excitement about developing for Windows Mobile. It has been long thought Microsoft could easily become a Smartphone platform leader because it controlled Windows, which is on the vast majority of the world's PCs. It was thought, that would be a huge advantage, the same way Apple's iPhone's ability to sync with PC software -- iTunes -- is a huge bonus. But that advantage will slip over time as people put more of their electronic stuff in various Web services, and less of it on their home computer. Now Microsoft needs to master syncing to Web services and PCs. The good news is that Microsoft has the money to fund as many iterations of Windows Mobile as it wants. The bad news is that Microsoft -- beyond the Xbox -- has never been able to ship an impressive consumer product. And as the Smartphone market shifts from corporate buyers to consumers -- even the majority of RIM's BlackBerry growth is to consumers -- that's going to become a required hurdle for Microsoft to clear.  The Smartphone market can support about two or three leading platforms. Apple will probably be one of them, and RIM could be another, with Nokia's strength mostly overseas. Time for Microsoft to prove it deserves to be there, too.

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