Microsoft is feeling the heat over the foray of both Apple and Google into the consumer devices market, and is expected to reshuffle the management of its mobile phones and videogames divisions, according to sources quoted by the Wall Street Journal.
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The iPhone, the iPad, and Android devices are becoming very popular with consumers, largely at the expense of Microsoft, which is losing customers to Apple and Google's smartphone and tablet offerings.
The Journal's report says that Microsoft will announce major organizational changes at its Entertainment & Devices Division as early as this week, especially in the Windows Phone area, where Microsoft has seen sharp declines in market share over the past two years.
Microsoft's entertainment and devices group is currently headed by Robert J. Bach, who was in charge of products such as the successful Xbox 360, the less successful Zune music player, and the Windows Mobile operating system.
Google and Apple have stolen the thunder from Microsoft in the smartphones business with the iPhone and Android. Most market statistics agree that the battle for the top spot is between Apple, Google, and BlackBerry-maker Research In Motion, despite Microsoft's latest attempts with the upcoming Windows Phone 7 OS.
Tablet computers, whose emerging popularity has led to sales of more than one million iPads for Apple, is becoming another weak spot for Microsoft. First, the Redmond company ditched the Courier tablet concept without even showing a prototype, and then HP killed Windows off its upcoming Slate tablet, in exchange for Palm's WebOS, after purchasing the company. Dell has also opted for Android on its Streak tablets.
It's unclear how this Microsoft shake-up would affect the company's current mobile strategy. Microsoft just introduced its new line of Kin devices, high-end feature phones aimed at teenagers; and later this year, new Windows 7 Phones are expected from both Dell and HTC.