Rumour: MS is about to shake up E&D division

[famousringo]

Sounds like a big restructuring might be in the works at the E&D division. Not sure how much, if any of it, will have to do with Xbox. I suspect the big wigs are more concerned with Microsoft's completely disjointed phone and mobile device strategy.

I've heard that MS's internal politics have become bogged down with insularity and petty empire-building. Ballmer needs to install somebody who can stomp on the squabblers and herd these cats into some kind of cohesion or MS will continue to miss out on the mobile boom.

http://online.wsj.com/article/SB10001424052748704113504575265110872287930.html

Microsoft Corp. is expected to shake up the management of its division focused on videogames, mobile phones and other devices, in the wake of increasingly bruising competition from Apple Inc. and Google Inc. in the market for consumer devices, according to people familiar with the matter.

The Redmond, Wash., software company could announce major organizational changes at its Entertainment & Devices Division as early as this week, those people said. The division includes Microsoft's Xbox videogame business and Windows Phone, an operating system for mobile phones. The unit accounted for $1.67 billion in sales during the first three months of the year, or about 11% of Microsoft's $14.5 billion in revenue during the period.

One executive in the division, J Allard, the chief experience officer and chief technology officer of the group, is expected to leave that role following Microsoft's recent decision to shut down a tablet PC development project known internally as Courier, that Mr. Allard was overseeing, people familiar with the matter said.

But the organizational shakeup is broader than Mr. Allard's departure from his role, these people add. The entertainment and devices group at Microsoft is currently headed by Robbie Bach, a 22-year Microsoft veteran and the division's president.

Microsoft's woes in mobile phones are particularly troubling for the company. Although it was an early player in the market for the sophisticated wireless phones known as smartphones, Microsoft has stumbled badly in recent years with its Windows Mobile operating system for handsets. The company's software has lagged behind cutting-edge technologies found in Apple's iPhone and Google's Android operating system, including touch screens that respond to finger gestures and online "app stores" for distributing software from independent developers.

During the first quarter, new shipments of handsets based on Microsoft's mobile software fell to 6.8% of the worldwide market from 10.2% during the same period the prior year, according to Gartner Inc. Google's Android operating system jumped to 9.6% from 1.6% during those same periods, while Apple's iPhone rose to 15.4% from 10.5%, Gartner estimated.

Microsoft has announced a major overhaul of its mobile software, Windows Phone 7, which is expected to begin shipping on handsets by the holidays. The product includes improved support for touch screens, better website browsing and redesigned user interface.

Microsoft's has fared better in videogames with the Xbox. Although it has lost billions of dollars on the business since entering the game console market over a decade ago with the original Xbox, it's in second place in the market behind Nintendo Co. with the Xbox 360 and now earns an overall profit in its entertainment and devices division as sales have improved. The company's Xbox Live game service is considered an especially successful part of the company's games business.

Microsoft is making a major bet that a new add-on device for the Xbox, code-named Project Natal, will boost sales when it goes on sale during the holiday season. The device is a sophisticated three-dimensional camera that will allow Xbox players to control games with the movement of their bodies without holding a game controller in their hands. Microsoft plans to reveal more details about the product at the E3 game show next month in Los Angeles.