Terminal Surgery For Microsoft Entertainment As Google And Apple Put The Boot In

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A major shakeup at Microsoft is looming as the company struggles to compete in the mobile and home entertainment markets. Last week, Google revealed a new TV offering with major TV manufacturers now queuing to partner with Google after rejecting Windows and Media Centre.

 
Since posting this story, Microsoft has announced major changes, with Robbie Bach, who leads the division, and chief technology officer, J Allard, departing the company. Microsoft said that Bach is retiring and his position will be eliminated. “Robbie’s an amazing business person and close personal friend, which makes his departure a point of sadness for me,” said Microsoft CEO, Steve Ballmer.
 
“However, given the strong leadership team he has built, the business performance of E&D this year and the launches of Windows Phone 7 and ‘Project Natal’ this fall, we are set up well for success as we continue to drive our mobile and entertainment businesses forward.”
 
The entertainment and devices division will now be run by SVP Don Mattrick, head of the company’s interactive entertainment business, and SVP Andy Lees, head of the company’s mobile communications business — who will report directly to Ballmer. 

Also impacting Microsoft is a rapid decline in demand for their Windows Mobile offering. Google with their Android operating system and Apple with their iPhone have steadily stripped mobile phone market share away from Microsoft, who recently renamed their Windows Mobile OS, Windows Phone 7.

In the Windows consumer market, Microsoft Australia has done little to deliver entertainment content or applications for their Media Centre offering, with Australia being one of the few countries where Microsoft failed to deliver an electronic program guide for TV content.

Back in 2007 Jeff Putt, Windows Consumer Lead for Microsoft Australia, promised movies and music content as well as automation applications that could be accessed via Windows Media Centre. When asked why the services had not been delivered in 2008 he said, “Watch this space”.

Two years later at the launch of Windows 7 he said the same thing – we are still waiting.

Last night, Microsoft admitted that they now planning a major overhaul of their Entertainment and Devices group in an effort to become competitive against a surging Google, Apple and Samsung.

It is not known yet what is involved in the restructure or the extent of the cuts, but Xbox pioneer J Allard’s decision to quit over the Courier’s end would be one part of a “broader” move meant to stave off gains by Apple’s iPhone and Google’s Android platform.

The Entertainment and Devices division is responsible for Windows Mobile, the Xbox, and the Zune music player, which was never launched in Australia.

New research from Gartner has revealed that the Windows Mobile market share has plunged during 2009 to just 6.8 percent. One of their most successful products, HTC HD2, has received complaints about poor battery life “because of the inefficiency of the Windows Mobile software”.

According to Gartner, during the same period, Google’s Android operating system jumped to 9.6 percent from 1.6 percent, while Apple’s iPhone rose to 15.4 percent from 10.5 percent.

 
In the Xbox market Microsoft has lost billions selling consoles and games with analysts predicting that there is little chance for the division to recover lost profits.

Highly successful for Microsoft is the Xbox Live game service, which last week signed a major deal with Foxtel to deliver content for Xbox Live Premium customers. 

Shortly the company will launch a new Xbox accessory, code-named Project Natal, in Australia. The device is a sophisticated three-dimensional camera that will allow Xbox players to control games with the movement of their bodies without holding a game controller in their hands. The device is expected to go on sale by Christmas.

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