Report: Microsoft planning major entertainment reshuffle

The undisputed success of Apple and Google in the portable device market has apparently prompted Microsoft to plan “major organizational changes” in the division responsible for Windows Phone, Zune HD and the Xbox 360.

“The first signs of major changes at Microsoft came last week, when ZDNet reported that J Allard, chief experience officer and CTO of the Entertainment and Devices Division, was leaving the company,” wrote Katie Marsal of AppleInsider.

“Allard’s alleged dissatisfaction is believed to stem from Microsoft’s canning of the dual-screen Courier tablet – a secret project that he was head of.”

Signs of an imminent shake-up in Redmond were also confirmed by Nick Wingfield of the Wall Street Journal, who noted that Microsoft’s “woes” in mobile phones were “particularly troubling” for the company. 

“Although it was an early player in the market for the sophisticated wireless phones known as smartphones, Microsoft has stumbled badly in recent years with its Windows Mobile operating system for handsets,” explained Wingfield.

“The company’s software has lagged behind cutting-edge technologies found in Apple’s iPhone and Google’s Android operating system, including touch screens that respond to finger gestures and online ‘app stores’ for distributing software from independent developers.”

Indeed, during the first quarter of 2010, new (worldwide) shipments of MS-based handsets decreased to 6.8% from 10.2%, while Google’s Android operating system rose to 9.6% from 1.6% and Apple’s iPhone jumped to 15.4% from 10.5%. 

Update: Confirmed – Microsoft’s Robbie Bach is retiring as president of the company’s entertainment and devices division. Don Mattrick, the current head of  Microsoft division’s games business, along with Andy Lees, head of the division’s mobile-phone business, will report directly to MS CEO Steve  Ballmer beginning July 1.