Microsoft recently confirmed that it’s reorganizing the top of the Entertainment and Devices Division, pushing out influential executives Robbie Bach and J Allard. This does not bode well for the division, which covers mobile offerings, the Xbox brand, Zune, and other electronics products.
Let’s face it, though, E&DD could use a hard slap in the face to wake it from its stupor. It took most of the past decade and $8 billion to squeak Xbox marginally into the black, writes Dave Methvin. Zune never made a dent in the iPod’s dominance. Microsoft’s trendy-wannabe Kin phones landed with a thud. The buzz-generating Courier tablet project was killed, supposedly over the objections of the now-departing J Allard. Hewlett Packard decides to buy Palm and use the PalmOS for its tablets, rather than a Microsoft product.
With Bach not being replaced, it puts SVP Andy Lees more fully in control of the Mobile Communications Business. This comes at a key time for the company, as it looks to issue up one of its most important offerings of the year in Windows Phone 7.
There are some hopeful signs. The reorganization separates the mobile business from the rest of Eⅅ that makes some sense given that Microsoft’s primary mobile customers (at least the current ones) are businesses, whereas most of the other components are consumer-focused, notes Methvin. Yet Microsoft is falling behind its competitors. Apple is soon revealing its next-generation phone, and Google’s Android OS is now on dozens of devices using many different carriers. By the time Windows Phone 7 arrives, those two will be even more entrenched and further along.
Perhaps the most ominous angle of this reorganization is that Steve Ballmer will be personally overseeing E&DD. Ballmer’s leadership hasn’t driven Microsoft to excellence over the past decade. If he’s taking a more active role in Windows Phone 7, perhaps this will be his final sink-or-swim moment, he concludes.