Forbes calls it game over for Microsoft. That seems harsh, but there is no denying that Microsoft hasn't been doing well in the battle for the smart phones. Each quarter it is the same story; Windows Phone market share drops a little, iOS picks up a bit and Android surges ahead. 5 years ago Steve Ballmer might have believed that "There’s no chance that the iPhone is going to get any significant market share. No chance." or that "Google doesn’t exactly bubble to the top of the list of the toughest competitors we’ve got going in mobile." but he probably changed his mind by now.
So what's a poor CEO of a waning tech power to do? Hope that the shareholders will let you be CEO for a while longer is probably the first thing, but staying the course doesn't seem like it would do the trick at this point. Desperate times call for desperate measures. Here would be my proposal: switch to Android.
Or rather fork Android. Windows 8 might be quite nice, but Android just has too much momentum at this point and as developer supporting another platform for another let's say optimistically 5% market share just isn't worth it. But if Microsoft comes out with their own version of Android, all apps developed for Googles will just work. Microsofts Android will of course not come with the standard Google Apps, but the Microsoft Android apps aren't too bad and a port of Office seems in the works. As much as we like to talk about the demise of the desktop, Office & Outlook are for most professionals the tools of their trade.
But the kicker is the patent angle. Microsoft makes 10-15 dollars on each Android phone from most manufacturers. They could easily offer Microsofts Android for free. On a 100-200 dollar phone they patent charge makes the difference between profit or loss so this should really move the needle.
The advantage of this strategy is that Microsoft can take over an existing ecosystem while actively taking away from Google. Both the networks and the handset manufacturers are by now nervous about Googles influence so no doubt they'd welcome the competition especially if it means changing almost nothing; it's still Android.
And you'd have to like the irony of Microsoft getting back into the game by way of Open Source.