On the desktop front, Microsoft is not discounting roughly 1 percent market share gain for Apple won last year, strengthened its position as the number 4 player in the Linux operating system behind, said the general director of Microsoft Steve Ballmer during the mid-year update with analysts Tuesday .

   “We pay great attention to Apple, as a competitor, and Linux as a competitor,” said Bolmer.

And fears of Google’s open source mobile operating system Android, not far behind.

“I think that trend is changing somewhat with Linux,” said Bolmer. “I think we’ll see Android on a Linux-based computers, in addition to telephones, and we’ll see Google increasingly as a competitor in the desktop operating system business, than we ever before.”

Last month, for example, a report surfaced that raised the question of whether the Android operating system have recently been successfully transferred to a Netbook.

“Seams between what operating system your phone and computer operating system will vary, so we ramped our investment in the client operating system,” said Bolmer.

A mobile operating system, Windows Mobile front, took third place, with Apple iPhone in the fourth and Google Android are currently blip on the radar, but, nevertheless, concerned at Redmond giant said Bolmer.

“In fact, all consumer markets MOJO with Apple, and to a lesser extent, BlackBerry. And yet, the real market dynamics with the operators and the real market dynamics with manufacturers of devices, it appears, especially with Windows Mobile and Android,” Bolmer said.

He added that he sees the competition in the mobile arena is happening on two fronts: one sells mobile-related software, regardless of the hardware, which may explain the software giant’s reported interest in running Windows Mobile online store application. Another front is a combination of software, hardware and services bundled together, like Apple’s iPhone and Research In Motion popular BlackBerry.