One thing that distinguishes a good leader from a poor one is that, in the midst of the situation, they are able to make a tough call instead of choking and not deciding anything.
It's easy to armchair quarterback. Be should have done this. Amiga should have done that. If Atari and Amiga had .... they'd be around still. But, as the CEO of a company, when any decision needs to be justified and fought over and everything else... it's actually quite hard. You may end up laying off thousands of smart people. You might take a company that was treading water and sink it. But there's a chance that you'll take a company that's treading water and make it whole again.... and there's countless examples of formerly great companies doomed because the upper management of a company choked on a tough call.
Anyway, Microsoft actually made a tough call. Windows Mobile Classic, which did well without any competition but has been totally trounced now that it has real competition, is dead. "Windows Phone 7 Series", otherwise known as Windows Mobile 7, is the new Microsoft phone.
I applaud this. There was pretty much no way that you could turn the present Windows CE environment into something that doesn't suck without being so bloated and nasty that it wouldn't be able to compete.
Of course, there's still about twenty zillion things that can go wrong. Nobody is going to be doing any real development work on Windows Mobile Classic until they know what Windows Mobile 7 is going to look like. Given Microsoft's way of doing business, I suspect that it'll be far simpler to move things over than porting an Android or iPhone app because it'll be running some variant on the Windows kernel... but it'll also be unpleasant to port because all of the user-interface code is likely to be totally different. That, we'll know in another month or so, although I suspect that everybody important to Microsoft already knows the story.
The big work is up to Microsoft. There are two main parts in a modern phone platform:
First, shipping good functionality with the phone. The screenshots actually suggest something nice looking and advanced, yet not ripping off the iPhone. If you compare the look of Windows Mobile 7 vs iPhone against Windows CE 2.11 vs Palm, you'll see they did a better job of suggesting a different course this time. One of the things that hamstrung Windows Mobile in the past few years was that the base experience sucked and you'd need to download or have your phone manufacturer install enough extra stuff to make it actually nice to use. We're looking at prototype versions of the UI, but they've at least made progress.
Second, cool things that transcend what the creators intended the phone to do. It wasn't until you could download applications for the iPhone that I was actually impressed with it. This is Microsoft's battle to loose. They have been getting worse and worse and worse at giving developers what they want. We've gone from acceptance of the shit that has been shoveled at us as the cost of having access to 90% of the world's computers to trying to find any way to work around touching the Microsoft side of the world. I tend to think that if they go too far towards the iPod and iPhone model (a play that has largely failed with the Zune store) they will fail.
I also think that the rollout is Microsoft's to bungle. One of the many problems with the Vista rollout was machines advertised as "Vista Ready" that weren't, so I think they were smart to not let people sell phones with Windows Mobile 6.5 that were upgradable to Windows Mobile 7. But they are going to have pretty much nothing of importance to sell between now and the big release, somewhere before Christmas season. This gives Apple and Android and Palm a lot of room to work on their strategy.
Personally, I'm still planning on getting a Droid. I'm up for renewal on my contract, annoyed at my VX6800, rooting for Windows Mobile 7 to fail, and it's not exactly an expensive phone. I'm just putting it off because I've got a few other things to buy.