Microsoft Mobile Division ‘All Shook Up’ Over Apple, Google Success

Microsoft is expected to overhaul its entertainment and devices group as the desktop software giant finds itself out-muscled in a bruising battle between Apple and Google. The division – responsible for the Windows Phone, Zune and Xbox – will likely lose its chief technology officer, reports say.

Although the division made $1.67 billion in sales for the first quarter of this year, Microsoft is being outmaneuvered as technology increasingly goes mobile. J. Allard, the division’s chief experience officer and chief technology officer, is expected to leave the company in the wake of Microsoft’s decision to kill his dual-screen Courier tablet.

What the Wall Street Journal describes as “major organizational changes” could also impact Microsoft’s Windows Phone 7, the company’s smartphone software expected to start selling this fall. Microsoft’s handset-related business has shrunk in the wake of growing success by Apple’s iPhone and multiple Android-based phones.

“Although it was an early player in the market for sophisticated wireless phones known as smartphones, Microsoft has stumbled badly in recent years with its Windows Mobile operating system for handsets,” Wall Street Journal reporter Nick Wingfield writes.

Along with tablets and phones, the reported shakeup would come as Microsoft also experiences trouble competing with Apple’s iPod touch. The Zune HD failed to counteract Apple’s iPod touch, increasingly being marketed as a game machine. The touch, along with the iPhone, grabbed 19 percent of the gaming market, according to a report earlier this year.

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[via AppleInsider and WSJ]

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