Microsoft has waved the white flag of surrender and will not compete with Apple by building a smartphone of their own. Many people felt that the time was right to release a new smartphone, especially since Microsoft could have capitalized on the iPhone's numerous shortcomings.

However, Microsoft chief executive Steve Ballmer feels that the iPhone is too popular right now. The combination of a struggling economy and the mentality that "everyone who wanted a smartphone now owns a smartphone" led to Microsoft's final decision.

Ballmer says that the decision is the result of careful financial consideration. By forgetting about building the hardware for the smartphone and focusing more attention on designing software that is able to stretch across many devices, Microsoft is expected to fare better in the long run. (Source: techweb.com)

Microsoft a Cheaper Alternative to Apple?

It was interesting to see that Ballmer did acknowledge Apple as the definite forerunner in the smartphone market, claiming that the device is exceptional at what it does.

Still, Ballmer did point out one weakness of the iPhone that Microsoft hopes to capitalize on: price. Instead of committing their software to only one type of smartphone, Microsoft is hoping to feature their Windows Mobile operating system on a wide assortment of lower-end devices to attract more people.

It makes perfect sense. In tough times, people are more inclined to purchase cheaper substitutes as opposed to brand-name models. If a Microsoft OS is featured on the less expensive device, the company will reap the financial rewards.

The Microsoft/Apple War Rages On

Apple's victory in the smartphone market does not signal an end to the Microsoft/Apple war. This year alone, Microsoft plans to redesign its user interface, introduce an application store, and offer a content backup service in order to better compete with Apple (and other rival companies). (Source: informationweek.com)

It's all part of Microsoft's plan to make careful tactical decisions and minimize cost during what's expected to be a miserable 2009.