For years Microsoft's Windows CE/Windows Mobile platform has dominated over the Palm OS. Palm OS did very well in the beginning. It was very nimble and responsive, especially compared to Windows CE once it finally joined the party. As time went on, Microsoft improved their mobile operating system, started calling it Windows Mobile, and surpassed Palm. Having lived at the time the original Palm Pilot was launched and having used both Palm OS and Windows Mobile, I understand the history, the differences, and the strengths and weaknesses of each but I won't go into that here. Suffice it to say that Palm OS failed so epically to keep up with trends/needs/usage patterns that Palm doesn't even use the Palm OS anymore. Microsoft had gained some of this lead by the time the "smartphone" was born and, even though Palm again got into the game early, MS kinda came in and took over.
Having seen the evolution of Windows Mobile, I can tell you that, even though the hardware gets better and faster, WinMo is still a bloated, clunky, unwieldy beast. The one thing that Palm had over WinMo hands-down was that when you tapped an icon, something happened... right then. Windows Mobile has, from day one, been a tap and wait operating system. I mean, for crying out loud, how many lines of code does it take to clear a checkbox? Why is the checkmark still there after you've moved the stylus clear of the screen?
In a brilliant move, Microsoft integrated WinMo so tightly with the desktop... they're desktop (via Outlook synchronization, etc.) and made it, eventually, work so smoothly that it just pushed the Windows Mobile platform to the top. Yet Palm still sat on its fat butt and developers flocked to Windows Mobile and the stunningly vast amount of applications developed for WinMo smartphones kept it on top.
I don't know if other companies didn't want to create smartphones, or they didn't feel they could compete with Microsoft, or Microsoft wouldn't let them play in their MS Outlook synchronization garden but they went uncontested for several years... until.
Enter, the iPhone. So well hyped, so well designed, so easy to use, and carrying the same status symbology of owning an actual iPod from Apple that it flew off the AT&T shelves. This despite a hefty price tag. This despite an operating system incapable of what had become basic functions in a mobile operating system. This despite its inability to synchronize with any corporate email system. But it is from Apple and Steve saw it was good and Steve said it was good and Steve got everyone to believe it was great.
Imitation being the sincerest form of getting your own piece of the pie, the market was quickly flooded with iPhone wannabes. Gone were the styluses (should that be styli?) and everything had to be a touch interface (this was not necessarily a bad trend in the overall market). And Microsoft kept the same basic user interface they had been using for five (now seven) years. Just like their foray into the media player market, Microsoft was lagging behind Apple and not bringing anything to the table to compete. They didn't even try. If you want a touch interface on a Windows Mobile device today, that interface has to be a third-party app.
Windows Mobile 6.0 was introduced in Q1 2007 with several notable updates from the previous version. Version 6.1 launched in Q2 2008 with only a few minor tweaks. Then, it took until Q3 2009 to introduce version 6.5, which wasn't even on the Microsoft roadmap until the millions of Windows Mobile fanboys and fangirls stood up and said they didn't want to wait until an undetermined timeframe in 2010 for Microsoft to finally put a dog in the fight. And still, who knows what kind of dog that's going to be. My guess is it won't be a rottweiler or a pit bull.
Just two months ago, Microsoft front-man Steve Ballmer reportedly said during a Venture Capitol summit that Microsoft had "screwed up" on Windows Mobile and had taken too long to release windows 7. Duh. What have you been doing for almost three years while Apple continued to gain market share? Now that the iPhone has stable (and complete) Outlook/Exchange sync and has added many of those aforementioned "basic" features and just fracking works they are finding themselves in the hands of more and more executives and business people that were using 4-year-old basic flip phones just last week. I think the delays in Windows Mobile 7 are going to be their downfall in the smartphone market. I just haven't heard anything revolutionary that will be added to it.