Microsoft's mobile plans, a chink in the armor

Microsoft (MSFT) may be giving some investors the impression that it has the pieces in place to stage a recovery from one of the worst quarters in its history. There is hope that Windows 7 will improve sales of the firm's PC OS. And the recent Yahoo! (YHOO) search pact gives it an opportunity to be viable in that market. But there is a key component missing for a recovery.

Microsoft is not making much headway in what many experts believe is the next promised land for many of the world's largest hardware and software markets -- mobile. Phone operating systems are still dominated by Symbian operating systems and Google's (GOOG) Android package is making gains. Apple's (AAPL) App store has made it a new powerhouse in the industry.

Microsoft is trying to make the case that its device software works across multiple platforms. The head of Microsoft's entertainment and deviced division told analysts, "Apple is very strong on the device side, but not as much in services. Google is stronger in the cloud, but not services. Microsoft can deliver in both areas."

That's wishful thinking. Microsoft's lack of success on mobile devices is based on the reality that it does not have the features and functions that its competitors do, in large part because handset companies believe that the demand for other operating systems is greater.

Microsoft may have highly functional, device operating-system software, but the competition has proved that its offerings include the market features that consumers are willing to buy like the App store, no matter whose name is on them.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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