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“Every Google phone works differently, and you have fragmentation,” he said. And indeed that is a common worry among developers who don’t want their applications to be incompatible with certain phones that have unusual screen sizes or features. But then again, Windows Mobile, which has been around for nearly 10 years, already has that same problem, and one of Microsoft’s chief goals in upcoming versions is to rein in the variations between Windows Mobile handsets.

“You will see a speedy set of innovation for us in the next 6, 12, 24 months,” said Robert J. Bach, president of Microsoft’s entertainment and devices division at a news media event in New York to introduce a quick revision of the operating system called Windows Mobile 6.5. “Should we have picked up on the trends a little sooner? It’s hard not to say we should have,” he added.

If the iPhone didn't finish off Windows Mobile in the smartphone market, the Motorola Droid may. Windows Mobile is losing the last vestiges of its mojo

In August, according to AdMob, Windows Mobile had only a 4 percent share of the mobile OS market worldwide, down from 7 percent in February

So the Droid may not be the iPhone killer but rather the Windows Mobile slayer. Microsoft, of course, will always have the unassailable PC franchise. But, wait, isn't Android coming to Netbooks next year? Maybe the real battle royal for Microsoft is yet to come.