Microsoft + Mobile Consumers = FAIL

Microsoft’s (s msft) latest ad campaign focuses heavily on the end user, telling us that Windows 7.0 was “designed with you in mind.” But the company continues to lose the fight for consumers, and nowhere is that more evident than in its mobile business.

Windows Mobile has lost nearly a third of its market share over the last year, according to the most recent data from research firm Gartner, as more consumer-focused manufacturers such as Apple (s aapl) and Research In Motion (s rimm) continue to gain momentum in the white-hot smartphone space. WinMo users’ traffic on the wireless web has dropped off even more dramatically during that period, falling 70 percent, according to the latest figures from AdMob — a clear indication that the few consumers who have Windows Mobile aren’t doing much on their phones other than talking and messaging.

Version 6.5 of the mobile OS received scathing reviews following its October launch, with many alleging that the update was nothing more than a stopgap as Microsoft works on a complete overhaul. Inexplicably, though, version 7.0 isn’t likely to debut until the fourth quarter of 2010, giving its competitors ample time to build on their leads. Meanwhile, Android has picked up substantial steam recently and is sure to grow its market share as more handsets come to market through carriers around the world.

As the runaway success of the iPhone indicates, the smartphone space today is all about the consumer — not the enterprise. End users are increasingly buying their own handsets and forcing IT departments to support the gadgets. And that’s very bad news for Microsoft, which has consistently failed to grasp the needs and wants of consumers — especially when it comes to phones.