So news of Microsoft losing share to in the mobile space should hardly be considered news. In fact even if the company purchased Nokia and RIM the challenge of integration would far outweigh the benefits. Sadly this would be true if both companies were given to Redmond at no charge. How bad is the situation? Well between December 2006 and December 2011 the Microsoft went from having 34% of the US market for smartphones to a paltry 5%! And all this while the smartphone market in the US has been exploding with growth.

Microsoft knows how bad things are. Sadly, they were way ahead in mobile – I used to rely on the HTC/UT Starcom Verizon XV6700 and called it the near-perfect device in March of 2006. It deserved this designation because it was truly a mobile office in your pocket.

I complained at the time that different carriers selling the same device were calling it something else and moreover there was really no branding for the device at all.

I think this phone may have been the last opportunity Microsoft needed to exploit to stay a mobile leader.

Sure, they have the relationship with Nokia but it will be a really tough sell to unseat Apple and Android at this point – unless something dramatic and unforeseen (by others) happens like Android or iOS exhibiting a massive security flaw driving users into the hands of the competition.

But Microsoft still has Skype as its last hope to attain some relevance in the smartphone space. If the software company is serious about the market and we all know they have to be, there will have to be serious handset subsidization. Even then, it is unclear it will be significant player in the market.

But a simple way to subsidize is by bundling Skype credits with phones – there is a huge arbitrage play here between what carriers charge for their voice minute bundles compared to what Skype charges.

To offset some of the cost, Microsoft will have to show ads which could be powered by Bing.

The challenge of course is voice calls are becoming less important each year as consumers use social and text as their preferred method of communications.

But the window is still open for Skype phone which is subsidized heavily – one which consumers would have to consider because the price is so low. Of course the challenge here is carriers like Verizon provide a number of phones for free with a contract such as the LG Enlighten and the Samsung Illusion. So Microsoft would have to potentially give you a free phone as well as unlimited calling or some number of minutes per month, etc. Also this strategy assumes carriers won’t mind Skype becoming the keeper of the carrier relationship. Sure, many wireless providers have partnered with Skype in the past but it is unclear if they are still happy to do so.

In short, Skype may be the last chance for Microsoft to become successful in mobile – and in the US, the subsidized approach to providing phones and service may make it very difficult to find success. Skype integration may be a better option in other countries where devices are generally purchased on their own.

I don’t want to come off as optimistic mind you – this strategy will be expensive and basically bribes consumers to take a product they don’t want. It’s worth pointing out a similar strategy in the past used by Bing to gain share from Google was a failure. But mobile is so important, the company may be forced to give the idea a shot – and if so they better start soon.

Skype may not be the only hope as Microsoft also owns a significant portion of Facebook - tight integration with this social network may be another option for Redmond to attack mobile. But it is unclear that Facebook would be willing to work exclusively or even semi-exclusively with a platform which has limited appeal - unless the price is really right.

While on the one hand this is good advice backed up by lots of flops like the Microsoft and HP tablet of a few years back that was supposed to be an iPad killer but was never released.

I’m wondering if it is just me who is skeptical about new technology in general. In other words CES or not you never really know if something is going to be the next big thing. Even when we are sure as an industry that a technology will take root, we have seen timing and other factors are more important than being an early player.

So just because 3D technology which was a hot trend at CES a while back is not mainstream it doesn’t mean it won’t be. Skype was way late to the VoIP game – MagicJack even later but both became successful examples of IP communications technology – a space left for dead by the majority of investors after the nuclear winter in telecom of late 2000.

This brings us to Ultrabooks – a topic I cannot be more delighted to discuss. Without a doubt this will be a major theme of this event and moreover I am writing this post on an ASUS Zenbook Ultrabook and love this device. How much? I am out here at CES this week and when I leave the room and don’t take it, I leave it in the safe.

The Asus is like a piece of jewelry – a fine watch as they say. In case you didn’t read my last post on the matter the keyboard is something I haven’t totally adjusted to – it lacks travel and forces you to hit it harder than normal to ensure all your letters appear on screen.

For a few years now we have heard the term consumerization of IT and to me this means bringing in really cool and trendy devices such as iPhones, Android smartphones and tablets into a company – and merging this with a wave of new software and applications designed to take these consumer tools and make them business tools.

While Ultrabooks are pretty much powerful laptops in sleek packaging – nothing new in terms of operating system or even software for that matter, they perform a slightly different function. They bring the power of desktop computing to tablet form factor. In other words these devices are the MacBook Airs of laptops. Having spent a fair amount of time in various Apple stores – my most memorable time was at the one on Greenwich Ave in Connecticut where a father gave his daughter a choice between the MacBook Air and the iPad.

I spent some time watching her go back and forth as she made the decision.

We all understand that there are big differences between these devices – one has hundreds of thousands of free apps which run on it from the app store – many of course have been written because the same tablet device doesn’t run Flash. The MacBook for its part is more powerful, has a bigger screen, etc.

But the point is the Ultraboook is the PC version of the MacBook Air meaning that if the MacBook Air is a serious competitor to the iPad then the Ultabook is the biggest threat to tablets in general.

Now the Asus I am using costs just a bit less than $1,500 and an Amazon Kindle Fire will set you back only $200. A big difference. Still there are worthy Ultrabooks on the market from the likes of Toshiba for $800. In fact the Toshiba is thinner than this Asus but the lack of bluetooth and less impressive screen resolution may be deal breakers for power users.

So to me this week at CES where a number of new Ultrabooks are expected is about not only innovation and design but competition.

I have spent my life in technology and have seen how competition has driven down prices incredibly – especially when Moore’s Law is thrown into the mix. In high school I wrote all the programs for TMC’s computers – they were all on a proprietary UNIX system but when it came time to migrate to a more powerful computer I hand-built a PC with an AMD processor running SCO UNIX – the price was much much lower and this new server was a monster in terms of disk space and processing power. The company which had sold us the proprietary UNIX system was named ZILOG and closed in the eighties at some point no doubt because proprietary has a tough time competing with open.

We are seeing the same thing happen in the Android ecosystem – it happened in the PC market, with laptops and numerous other spaces.

And it will happen to Ultrabooks. In a year a Zenbook equivalent to what I am using now will likely cost $899 or less.

So yes, trends in tech are tough to nail down – especially when it comes to timing. But the Ultrabook is evolutionary as much as it is revolutionary and as great as tablets are they really stink at doing things you need a PC for – they aren’t wonderful for content creation for example – switching windows on an iPad is still tedious as compared holding the Alt button and hitting Tab repeatedly.

And then there are the websites – how many times have I tried to complete an ecommerce transaction on a tablet from RIM or Apple only to find the formatting is not designed for a tablet and I have to wait to get to a PC to do it right.

The price discrepancy between a Kindle Fire and Ultrabook is massive a 4x differential or in my case 7.5x.

But we are at the beginning of a new subcategory of product and unless you believe the consumerizaion of IT is just a fallacy you better realize and quick that your executives will be asking about Ultrabooks soon. Moreover a gift to corporations may come in the form of more users buying their own Ultrabooks and bringing them to work – saving companies who allow foreign equipment into the mix a good amount of money.

So sure, lower expectations all you want. But from where I stand, Ultrabooks are a must-have at this price point – just wait until the competition heats up this week at CES.

For more see articles relating to products unveiled at CES and how they have failed:

• The 'CES curse?' Gadget show has poor record, AP, Peter Svensson
• CES not always the greatest guide for commercial success, CNET, Roger Cheng