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Microsoft Unfazed by Windows Mobile Flop

Microsoft (MSFT - Get Report) announced some disappointing news this morning concerning its cellphone software -- and also had some "fighting words" for Apple (AAPL - Get Report) iPhone fans.

Even though Microsoft fell short of its highly publicized brag that it would sell 20 million Windows Mobile software licenses in the past year, the company was able to put a good spin on things.

Microsoft wrote to me to say that it was "excited to announce that Windows Mobile had yet another year of high growth, closing out the fiscal year by nearly doubling the overall expansion of the market."

In particular, Microsoft says that despite the recent hubbub over the release of the iPhone 3G, that cellphones based on the Microsoft mobile operating system are still doing very well.

"IDC expects Windows Mobile phones to continue to outsell iPhones in both consumer and enterprise shipments, and by 2012, Windows Mobile is expected to double sales over the iPhone in the consumer space, and have nearly nine times the amount of enterprise deployments."

With the new iPhone 3G being able to connect to Microsoft Exchange servers, allowing users to keep track of e-mail, contacts and appointments, I wonder whether those numbers can and will be challenged in the future. And that doesn't take into account any of the new phones rumored to be released in the next few months possibly including a Google (GOOG)/Android phone, a Garmin (GRMN - Get Report) nuviphone and, of course, a bunch of new Research In Motion (RIMM) Blackberrys.

Microsoft ticked off the following points in today's news release:

  • Windows Mobile sold more than 18 million licenses (20 million projected) in fiscal year 2008, seeing triple digit gains in France, Latin America, Central and Eastern Europe, Japan and India.
  • Consumers today can enjoy a number of Windows Mobile 6.1 phones, including the HTC Diamond, Touch Pro, and Samsung Omnia, and anticipation is rising for upcoming devices such as the Sony (SNE - Get Report) Xperia X1. (Interesting that there's no mention of the wonderful, new Palm (PALM) Treo 800 here.)
  • The company continued strengthening its position in the enterprise evident by 363 lighthouse wins (500 devices or more), which equaled 1.4 million total licenses; 91 were competitive (meaning a RIM BES server was decommissioned).
  • The company has more than 18,000 Windows Mobile applications, recently adding applications from Bloomberg, Reuters, and SAP, giving people the choice and flexibility they demand.
  • Microsoft is continuing to leverage acquisitions including Danger, MobiComp, Musiwave and aQuantive to deliver the best mobile experience in the market.
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