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Microsoft (NASDAQ:MSFT) spent this week showing off its future at Barcelona's Mobile World Congress show.

Its Windows Phone booth was much smaller than that of Google's Android, and its partner in phones, Nokia, saw share prices drop after it failed to live up to pre-show hype of "budget" Windows Phones.

To make things worse, the lead Windows Phone developer left for Amazon (NASDAQ:AMZN) and, back at the ranch, its Azure cloud suffered an outage.

But things weren't all bad:

  • Microsoft trotted out a possible heir to CEO Steve Ballmer, Steve Sinofsky.

  • Microsoft won important endorsements for future products from key Google (NASDAQ:GOOG) OEMs Samsung and HTC. Both will support the next version of the operating system, Windows 8.

  • Microsoft drew good reviews for the latest "beta" version of Windows 8, which focuses on a touch interface called Metro.

  • Microsoft got some IBM-like "oohs" and "aahs" from some of its demos, especially one that combined the Xbox Kinect interface with Windows Phone.

  • There was some good news for Windows Phone on the security front. Since it doesn't use the Webkit rendering engine it's not subject to Webkit-based malware.

Microsoft succeeded in looking like a contender in an area where its notoriously weak. What it demonstrated was that it will win an opportunity in that market to show what it can do.

But success in mobility remains speculative. If you're going to bet on Microsoft, you're betting on the enterprise space, on the Windows franchise, on Kinect and the Xbox game machine. Anything Windows Phone delivers in terms of profit will be a bonus and won't come in for some time.

Disclosure: I am long MSFT.

Source: Microsoft Has A Mobile Future