Microsoft's Windows Phone Head Swap Could Mean Big Changes

Microsoft CEO Steve Ballmer has shifted Andy Lees, president of Windows Phone, to a new role in the company. Big changes could be afoot.

Microsoft CEO Steve Ballmer has replaced Andy Lees, president of the company's Windows Phone division, with Vice President Terry Myerson. However, the latter will not inherit the actual "president" title.

At the same time, Ballmer shifted Lees to another role within Microsoft: expanding on the interoperability between Microsoft's various platforms, including Windows Phone and Windows 8.

"I have asked Andy Lees to move to a new role working for me on a time-critical opportunity focused on driving maximum impact in 2012 with Windows Phone and Windows 8," Ballmer wrote in an internal memo reprinted in part by AllThingsD Dec. 12. "We have tremendous potential with Windows Phone and Windows 8, and this move sets us up to really deliver against that potential."

Following the news, online forums filled with speculation over whether Lees' shift represented a promotion or demotion. In the "promotion" category, Microsoft certainly is faced with a significant challenge and opportunity in ensuring its various products cooperate in a massive ecosystem-exactly the sort of thing that needs a strong leader capable of seeing the big picture. It also opens up the possibility that Microsoft will bind Windows 8, its upcoming operating system due in 2012, in some close and fundamental way with Windows Phone, which currently exists wholly as a standalone platform.

Those who see Lees' shift as a demotion, however, point to Microsoft's declining market share in smartphones (as indicated by third-party analysts). Although Windows Phone has earned critical praise from some quarters for its unique user interface, it has not performed up to Microsoft's sales expectations. "We haven't sold quite as many probably as I would have hoped we would have sold in the first year," Ballmer told an audience during Microsoft's financial analyst meeting earlier in 2011.

Microsoft has declined to officially break out sales numbers for Windows Phone. But according to research firm comScore, the company's Windows Mobile/Windows Phone share dipped to 5.4 percent of the overall market in October, down from 5.6 percent in September and 5.8 percent in August.

Myerson's new role will involve Windows Phone's development and marketing, an expansion from his previous focus on the mobile platform's engineering. Microsoft has paired with a wide cross section of manufacturers, including Nokia, to build and promote a new generation of Windows Phones loaded with the company's broad-based Mango update.

The Windows Phone team faces some considerable rivals in its bid for broader adoption. Both Google Android and Apple's iOS are battling for the lion's share of the smartphone market, as well as the loyalty of third-party developers, and Research In Motion-despite its declining market share-remains a potent force among business users.

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