I believe this is a bit premature. First of all, Microsoft is in the situation it is in due to its stagnation for the last few years in developing Windows Mobile. I'd bet 99% of users cannot tell a Windows Mobile 5 device from a Windows Mobile 6.1 device unless a manufacturer like HTC has heavily modified the user interface. WinMo 5 came out in 2005 and WinMo 6.1 came out in 2008. We are on the back half of 2009 and WinMo 6.1 is the latest platform. So basically, the OS looks and feels much like it did in 2005. Four years in the mobile phone space is an eternity. Heck, even in the PC world, people started complaining about the age of Windows XP when it was four years old and a successor wasn't on the near horizon.
I think MS has woken up to this. Windows Mobile 7 is supposed to address many of the challenges put forth by the likes of Apple, Palm and Android from the user interface side, but that is a 2010 release at best, so Microsoft made many updates to the current platform and WinMo 6.5 will be out on devices later this year. The truth is, given the snails pace of innovations for the last three releases (WinMo 5.0, 6.0 and 6.1), 6.5 really deserves to be called 7.0 for all of the changes in it, but Microsoft had been talking about WinMo 7 enough that it would have been obvious that the pending version didn't live up to that standard, so it was christened 6.5.
The bottom line is, Microsoft knows and is now acting on the reality that mobile platforms need constant and significant updates on an annual basis. Apple has set the standard here and to do anything less is to just give up. Consumers want new stuff regularly. Mildly freshening up your phone every 18-24 months just doesn't cut it.
Secondly, contrary to what some would have you believe, the smartphone market isn't mature and the leader hasn't been determined, not by a long shot. We are just a few years into the market. If you had asked someone in 2002 who would be the victor in the smartphone market, you probably would have heard the names RIM or Palm thrown around. Apple had no mobile device and Microsoft was well below 20% share. Today, you'll certainly hear Apple as the victor, with RIM claiming a respectable position for those that are more interested in email productivity than swooshing stuff around on their screen with their fingers. As Mr. Gold mentioned in his article, Android and Palm are also mentioned as serious competition to Microsoft.
Android and Palm? Android has largely been on one device as of yet, though there are others coming to be sure. Palm is definitely on one device and one carrier with a brand new operating system that hasn't been out three months yet. Yes, Microsoft has let the OS stagnate but it is still selling over 18 million devices annually.
If Microsoft has really learned its lesson and knows that this is at least as much a consumer game as a corporate game, then there is still time for Windows Mobile to reverse the recent trend. That means not only does 6.5 launch soon and 7 come out next year, it means that there is so much stuff on the drawing board that in 2011, 2012 and 2013 there are three more significant releases. You can bet that Apple, Google and Palm will do the same. The one that rests on their laurels will really just be resting in peace.