With the iPhone’s 3.0 software release in June, Apple will make a major stride towards filling the business user experience and manageability gap, especially when it comes to Exchange ActiveSync. With the economic downturn in full force, companies are cutting perks like smartphones. This means that more and more employees are bringing their own to work. They are usually purchasing the iPhone for the mixed consumer and business functionality. They want access to corporate email. IT departments have tried to stem the flow of iPhones into their organization, claiming lack of business functionality and security. This is a losing battle and CIOs are starting to admit it.

At a question-and-answer session at Microsoft’s Public Sector CIO Summit in Redmond, Chris Kemp, the CIO at NASA’s Ames Research Center asked Steve Ballmer: “With platforms like the Google phone and iPhone coming out, it’s really tough to continue to stand behind Windows Mobile when our employees are bringing these consumer devices into our environments. And in your presentation you put Windows Mobile right in the center there, but it was a phone that doesn’t work in America and an operating system that you haven’t released. I’m wondering what your commitment is to continuing to get newer versions of the operating system in our hands so that we don’t have to fight this battle on the ground.”

Ballmer’s answer; “We have a significant release coming this year. Not the full release we wanted to have this year but we have a significant release coming this year with Windows Mobile 6.5. I think that would look a lot like the phone that I showed that was in the slide, but very good catch, very impressed. (Laughter.) He was right on both scores, very good. But I think with Windows Mobile 6.5, there will be phones in market this year. We still don’t get some of the things that people want on the highest-end phones. Those will come on Windows Mobile 7 next year. Certainly I’m not, um — there’s opportunities for us to accelerate our execution in this area, and we’ve done a lot of work to really make sure we have a team that’s going to be able to accelerate. With that said, we did sell more Windows Mobile devices last year than Apple did iPhones — just an important factoid to have. Blackberry was a little bit ahead, and Google was nowhere to be seen, except in Silicon Valley, I’m sure. But we’ll do our best to help you with that challenge.”

His comment regarding how Microsoft does not get the things that people want on the highest end phones, is pretty sad but true. Apple seems to get it and as every iPhone software release closes in on the email and business functionality provided by Windows Mobile, where does that leave Windows Mobile? Not in a very good position, all I can say is that Microsoft better hit it out of the ballpark with Windows Mobile 7 to stay competitive with the iPhone.

Quote source TechFlash.com.