Report: Microsoft Readies $1 Billion Investment For Windows Mobile

Microsoft reportedly plans to invest $1 billion in research and development for its Windows Mobile program. Although there is speculation that the vendor might acquire Palm or other mobile handset manufacturers to help boost Microsoft's shrinking market share in the mobile segment, analyst Brendan Barnicle, of Pacific Crest Securities, says Microsoft is making plans for a major investment in Windows Mobile, according to Forbes.

Barnicle said he recently interviewed Bill Koefoed, manager of Microsoft's investor relations, and was told Microsoft plans to invest $1 billion in R&D for Windows Mobile. Such an investment puts Microsoft in a "build" position in a world of "partner, buy or build," Barnicle said.

"Koefoed also noted that the operating systems from Palm and Research in Motion both have their own set of development challenges," Barnicle said, according to Forbes.

Microsoft executives recently acknowledged difficulties developing Windows 7 Mobile strategy, admitting at times its execution has "gone astray." According to figures from Comscore, Windows Mobile's smartphone market share slipped from 19 percent in September to 18 percent in December. Meanwhile, RIM had 41.6 percent in December and Apple had 25.3 percent.

Microsoft has said that in their development plans for Windows Phone 7 they will work with OEMs in a more structured fashion, setting minimum hardware requirements and increasing the amount of Microsoft-developed software on devices. Their goal is to have Windows Phone 7 software and hardware working together in an optimized fashion, following Apple's footsteps with the iPhone.

On Feb. 15, Microsoft unveiled Windows Phone 7 Series, a completely redesigned version of Windows Mobile designed to attract consumers, weaving in Xbox Live games, Zune music and video. Every Windows Phone will have a dedicated hardware button for Bing search, and a variety of Office apps and a built-in feature that will automatically synchronize the photos with the device to PCs. Windows Phone will also have six hubs labeled People, Pictures, Games, Music + Video, Marketplace, and Office.

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