Microsoft CEO Steve Ballmer admitted in a briefing with financial analysts yesterday that the software giant has lost ground in the smartphone market over the last 12 months. “It was a tough year on succeeding with phones, mostly our own issues frankly,” Ballmer said, reports the Washington Post. Microsoft’s ‘Entertainment and Devices’ president Robbie Bach followed up by saying that the company’s share of the mobile phone operating system market had fallen over the last year, although he said volumes were up slightly without giving figures. The tone was less upbeat than at the beginning of the year when Ballmer stated at the Consumer Electronics Show in January that Microsoft and its partners had sold 20 million phones over the last year and he was “excited about the momentum we have.”

Bach added that Microsoft would continue to invest heavily in its ‘Windows Phone’ brand – the new name for its Windows Mobile platform – but conceded that the firm needed to work better with its hardware partners. “It is our view that one model, one phone is not going to build volume,” he said. “People are going to want different configurations on their phones. We need to work very closely with Samsung, Sony Ericsson and others to build a broad selection of phones that provide a choice of different pricepoints and different capabilities.” The new Windows Phone branding is set to be applied to Microsoft’s latest platform version, Windows Mobile 6.1, and subsequent releases.