Windows Mobile operating system is not very popular with consumers. It had only around 10% of the nation's smart-phone market, as per NPD Group. It lagged behind Research in Motion (BlackBerry phones), Android (from Google, used in a variety of models) and iOS (Apple's iPhone) in the first quarter of this year.

Microsoft's share is not only small, it has been shrinking too.

Microsoft is the number one company in operating systems development.

Its Windows software dominates desktops and laptops. It has also been developing systems for mobile phones for more than a decade.

Despite the problems in cell phone market, Microsoft is not giving up. In the fall, the company plans to introduce an all-new operating system for mobile devices i. e. Windows Phone 7. Windows Phone 7 will make use of two of its most successful ventures: the Office suite of programs and the Xbox 360 video game system.

Discarding its current system is a judicious strategy for Microsoft, said Kim Caughey, an analyst at Fort Pitt Capital Group.

According to Caughey, the problem with Microsoft was that they did not think that consumers would have desired a different experience on their phones than on their computers.

“This is a hard reset of our entire operating system”, said Brandon Watson, a Microsoft executive who is looking after the development of the system.

Watson was not shy in saying that competitor Apple Inc. was the role model.