The Nokia 900 Lumia was Microsoft's latest best chance at turning the smartphone battle into a three way race.
They're not awful, but they're not great. And any Windows Phone has to be great to have a chance against Apple's iPhone, which sold 37 million units just last quarter, and phones running Google's Android platform, which are selling around 850,000 per day (based on Google's activation numbers).
Meanwhile, Microsoft has been at this game for way too long, with way too many do-overs and false starts.
The iPhone was announced in January 2007. At that time, Microsoft's Windows Mobile platform had 14% market share, according to research firm Canalys.
The iPhone made Windows Mobile look totally irrelevant, and it quickly started losing market share.
It took Microsoft more than three years to come up with its answer: Windows Phone Series 7. It was announced in February 2010. (Microsoft later dropped the "Series" from the name. It ought to drop the "Windows" too, but that's another story.)
The first phones shipped that fall. The software looked fresh and new -- at least it wasn't a blatant ripoff of the iPhone like Android. But it also wasn't good enough. No multitasking, no copy and paste, no apps.
By then, Microsoft's global smartphone market share had dropped to 3%.
In February 2011, Microsoft signed its big deal with Nokia, committing more than $1 billion up front to joint marketing and other incentives. The first Nokia Windows Phone, the Lumia 800, shipped in England in October 2011.
By the end of 2011, Microsoft's global market share had dropped to 1.4%.
Now it looks like the Lumia 900 won't be the savior either.
To recap: Microsoft has had FIVE FULL YEARS to come up with an answer to the iPhone. It still isn't there.
So how long until we can declare Microsoft's smartphone ambitions dead once and for all?
Another year? Two? Five?
The trouble is, this isn't some hobby project like the Zune where Microsoft can quietly withdraw and pretend the whole thing never happened. Losing in mobile could eventually bring the entire company down.
Smartphones are already outselling PCs. That has huge implications for Windows ($20 billion a year in sales), Microsoft's business apps like Office and Exchange email (another $20 billion a year), and just about everything else the company does.
Microsoft knows this.
From everything we hear from sources close to and within the company, mobile is the new Bing. Microsoft will keep at this market for as long as it takes, and spend as much as it possibly can get away with, to become number three. The next step, from what we hear, is to make Windows Phone more like Windows, which will help developers build for PCs, tablets, and phones all at once.
What if that fails? Then what? Buy what's left of RIM? Buy Nokia?
Maybe. Whatever it takes.
Remember: Microsoft dropped more than $10 billion on the Xbox before it ever turned a dime in profit (that's operating loss -- not including acquisitions. It's still about $4 billion in the hole, lifetime.) Microsoft has also lost $10 billion (operating loss) on Bing and other consumer online services just since 2007.
This is way more important. Expect the commitment to go even deeper, and to drag on even longer if necessary.
Which means this zombie is going to keep walking for a long, long time.
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