If you look at Microsoft’s Project Natal, you know that Microsoft is trying to go after the rest of the family in the gaming space.  Once those people become comfortable playing games like raggedy dolls 😉 they’ll be comfortable using whatever entertainment or service Microsoft provides on the box.

It goes without saying that Microsoft is big in business and will likely continue to be but that focus may continue to be their undoing in other market segments – just look at Windows Mobile.  Take the consumer who is buying their first or next mobile device and just moving into social networking or electronic communications or those that currently have no brand loyalty.  Here, Google could gradually and quietly take over from Symbian, Apple and Microsoft.

Google Wave + Google Search + other Google applications on an Android-based phone, a mini running Android or even on any other low-cost device with a browser, could be a winning formula and all that any social networking consumer needs.

While Microsoft will dominate business, gaming and home entertainment, Google may well end up dominating most of the mobile consumer space (with a little work on the UI – and imagine if Google and Adobe got together…).

Microsoft needs to come out with a Windows Mobile device and fast – like this year.  It needs to be a .NET-based OS and have a flourishing and up-front application/music market place.  That means dismissing their hardware partners and bring out a cheap Zune phone (while extending Game Studio Express to be App Studio Express) – it’s painful to other but it’s the only real way for Microsoft not to lose this space altogether, and not to Apple, but to Google.