Apple's already conered this market. I'm not sure if microsoft can really get a strong foothold in this market.
If Xbox Live intergration is good. As well as Zune Pass ( which if on 360 you already have it, you can access on your phone to ) Many 360 owners will see huge benefits in owning this over Iphone. M$ have to make sure they take this already great beta phone previewed here and tweak any points mentioned.
It would seem they beat Apple in UI for phones with their design and touch screen.
M$ have to start now. Zune pass is a monthly cost. It works on PC, 360 and now Windows phone 7. 1 monthly payment gives you access to music in your car, Home, bedroom and phone all for 1 payment.
More people have PC's than Macs. Apple dont have a console out, and will never have access to Xbox Live.
If Kinect gets mainstream, M$ could advertise on the 360 itself the benefits of having WM7 over any other smartphone. Dont underestimate Live. M$ have over 27 million Gold subscribers ( paying ).
If they do this right, the benefits to 360 owners, Pc owners and WM7 owners will be a major plus over any other smart phone.
I think this was M$ original plan with Live all along.
Also then Bing could become huge. As that is the search engine on the phones. Which is great. It may be a new engine, but currently it doesnt have all that BS that clogs up the old engines like Google and Yahoo.