Mobile's impact on Microsoft: HP's out, Nokia's in

Two announcements--one yesterday, one tomorrow--mark a major realignment of industry support for Microsoft, and also underline the transition from PCs to smartphones and mobile devices. Yesterday, HP announced two new WebOS-based smartphones and its new TouchPad, but perhaps the biggest bombshell was held for the very end of the presentation: HP will make WebOS run on its personal computers.

As I wrote yesterday, WebOS isn't a true replacement for Microsoft's Windows 7, and it relies extensively on a touch interface, so it's likely that WebOS support will be confined to HP's touchscreen all-in-one PCs and tablets, at least initially. However, HP's move is very bad news for Microsoft, because HP is Microsoft's largest software reseller. Microsoft won't get any smartphone or TouchPad operating system revenue from HP, and its revenues from Windows on HP's desktops and notebooks are now at risk. In addition, HP's decision to port WebOS to its PCs may increase the market credibility of Google's Chrome OS as a Windows alternative (although I still believe that Google should drop Chrome OS and put all its efforts behind Android.)

Bloomberg reports and other sources have confirmed that Nokia will announce a partnership with Microsoft to use its Windows Phone 7 operating system tomorrow. Nokia has been struggling in the smartphone market, and a blunt memo from Nokia's new CEO suggests that the company's existing smartphone operating systems, MeeGo and Symbian, won't turn things around. Windows Phone 7, which has been floundering in fourth place among smartphone operating systems, could get a big boost from Nokia, especially outside North America. Microsoft is addressing the big structural holes in Windows Phone 7--copy and paste are likely to be added in March, and multitasking will most likely be implemented before the end of the year.

HP's and Nokia's decisions make it very clear that Microsoft's future, as well as the future of information technology, is mobile. The problem for Microsoft is that it's moving from a position of strength (the desktop) to a position of weakness (mobile). However, Microsoft can't hold back the future, no matter how hard it tries.