The warning signs were there. After boldly proclaiming that it would sell "more than" 20 million licenses to its Windows Mobile operating system by the end of its fiscal year on June 30, Microsoft later scaled that prediction back to "nearly" 20 million units. This week, however, the software giant conceded it did not hit its target: The company sold just 18 million units in the fiscal year.

In a posting to his "Seattle Post Intelligencer" blog, Todd Bishop quotes a Microsoft executive as saying that, despite the prediction shortfall, it still increased the market share of Windows Mobile, which competes with smart phone OSes from Apple, RIM, and others. "[The 2 million unit shortfall] sounds like a large number of units, but actually, it's less than about a month's worth of a run-rate," Microsoft senior vice president Andy Lees told Bishop.

Fair enough. But it wouldn't be a news item if Microsoft hadn't spent so much time touting the 20 million unit sold figure in a transparent attempt to offset the hype generated by Apple's innovative iPhone. As Bishop notes, Microsoft president Robbie Bach repeatedly uttered the 20 million unit prediction during public presentations over the past year. It wasn't until last month that Lees, in a letter to hardware partners, let slip with the revised "nearly" 20 million unit prediction.

Lees said that the reason for the shortfall was that certain new Windows Mobile-based smart phone designs shipped to market more slowly than expected. He declined, however, to name them.