The Google Android OS has created a lot of buzz lately in the mobile landscape. Clearly Google is going big offense in this area, by forming up Open Handset Alliance and starting to build Android phones with several handset makers.
Right now, Windows Mobile takes a big share in the enterprise business market, an area that Android may not be able to encroach initially. Think about iPhones. Without a good solution of sync-email and IT manageability, iPhone does not really pose a threat to Windows Mobile in that market segment.
In the long term, for a healthy persistent growth of Windows Mobile, a strategic move from Enterprise to Consumer may be needed. Just like how Microsoft Windows dominates the PC market - people use the same piece of software at work AND AT HOME. Windows Mobile needs to re-invent itself, with 3 to 5 years, as something that both the enterprise and average users can happily adopt, something that does not look like a scale-down desktop Windows. Microsoft can't afford to lose this battle, as I believe this is one of two growth areas (the other being online services) that the whole industry is betting in.
For more information about Android and Open Handset Alliance, see this site.