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I agree, it's a worrying trend for Microsoft. If HTC get to the stage where they're running the same UI and app on top of both Windows Mobile and Android, they'll surely question why they should pay $15 per unit to Microsoft when they're paying nothing to Google.
The problems are all of Microsoft's own making unfortunately. You rightly pointed out that they've left the non-enterprise apps to rot. I'd still be using a Windows Mobile phone if the browser, media player and camera were up to scratch.
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