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Make no mistake, Chrome is the most threatening competitive product Microsoft has faced in a decade. But the threat is more potential, because Google has a long way to go from beta to shipping product and wooing developers to the new runtime along the way. That said, if Microsoft's mobile strategy weren't so weak, I wouldn't be writing this blog post.

Before continuing on the main topic, I must clearly state something I've alluded to in other posts: Microsoft must change its priorities. The company has wasted too much time chasing Google in search. The search wars are over, and Google won. Microsoft must accept this. Where Microsoft should have been pushing hard is the device category where search will be the killer application: the cell phone.

Instead, Windows Mobile has fallen way behind competing products. Windows Mobile is a mess. The user interface is too complicated, and there are few—I say no—capabilities that distinguish it from other mobile operating systems. Yesterday's "The Mossberg Solution" review of the Touch Diamond has this headline: "HTC Can't Disguise Windows Mobile Flaws." The hardware is solid, but the operating system is ho hum.

It's time for Microsoft to launch a mobile Manhattan Project, something on the scale of Internet Explorer in 1996. If Microsoft cedes the mobile market to Apple and Google, the PC will be the software giant's final—and declining—legacy. Mobile devices, particularly cell phones, will be the next dominant platform. The PC's role will reverse, becoming adjunct to the cell phone.

The Web in Your Pocket

The mobile market has dramatically changed over the last 12-15 months. But Windows Mobile hasn't moved with it. Apple's iPhone is exciting and has raised end user expectations about mobile user interfaces. Apple's iPhone platform has huge potential to woo developers, too, mainly because of the App store.

Now along comes Google, carrying two nuclear missiles: Android and Chrome. Both are immediate problems for Microsoft. Let me be absolutely clear: Chrome is not a Web browser, it's an application runtime. Chrome is really Google Gears with a browser facade. Sure, Chrome is based on Webkit and has browser legacy, but the product's core capabilities—and Google's objectives for them—is running Web applications. Chrome is a development platform, but in the cloud instead of on the PC. Way I see it, Chrome is the Google OS.