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However, Microsoft was still able to increase Windows Mobile's overall share of the worldwide mobile phone operating system market, despite increased competition from Apple's iPhone, Research in Motion's BlackBerry and others, said Andy Lees, senior vice president of the Redmond company's Mobile Communications Business, in an interview.

Lees, a veteran Microsoft executive who moved from the Server & Tools unit in February, attributed the lower-than-projected Windows Mobile sales to some devices coming to market slightly later than previously expected. He declined to say which ones.

"That would be unfair to the OEMs," he said, using the common abbreviation for original equipment manufacturers, or phone makers.

"The OEMs give us predictions as to when they'll ship the devices, and I don't want to put them in the dunk tank, if that's a phrase, by implying that they didn't stay on time. That's confidential conversations that we have."

Robbie Bach, president of the Entertainment & Devices Division, touted the 20 million-unit projection repeatedly during presentations at industry trade shows during the past year.

The first clue about the shortfall emerged in early June, when a letter from Lees to the company's partners said the company would sell "nearly 20 million Windows Mobile smartphone licenses" for the year, as opposed to the company's previous promise of "more than 20 million" licenses sold. Asked about the change at the time, a Microsoft product manager said any shortfall would be nothing more than "a rounding error."