Combined with a separate report showing that consumer interest also is waning, it appears that Microsoft's phone platform is losing steam.
Microsoft started rolling out software updates to users of the Samsung Focus and LG Quantum, following more than a month of delays.
Office 365 works to an extent from virtually any mobile device, but Microsoft could dominate if it developed native Office 2010 Mobile apps for iOS and Android.
Microsoft's latest explanation of its Windows Phone 7 update fiasco gets an A for effort, but a B+ for its timing, a crisis communications expert said Friday.
Microsoft did not realize how different smartphones are from PCs until recent software updates broke new Windows Phone 7 devices.
How Windows Phone 7 will be improved in the coming months.