When Windows Phone 7 was released, several mobile phone manufacturers jumped aboard the Microsoft bandwagon to provide the world with the earliest devices running the new platform. Among these manufacturers were HTC, LG, Samsung and Dell. Sony Ericsson decided not to go after Windows Phone 7 for a variety of reasons.
Limited software development resources
Sony Ericsson is currently on the road to recovery from a very dark stage where it was facing enormous losses in the smartphone business. Thus it does not have as much resources for software development as its rivals. This was particularly obvious during the recent Xperia X10 upgrade drama where their flagship was updated to an outdated version of Android (2.1) after a series of delays.
Thus if Sony Ericsson would go after Windows Phone 7, its existing Android lineup, which isn’t in a good position anyways, would suffer even further. Along with that its future phones, such as the Xperia Arc would also suffer at the hands of lack of development and this would put a pressure on the profits of the company.
Sony Ericsson and its history with Operating Systems
Sony Ericsson does not have a particularly rosy history with mobile phone operating systems. It had previously supported UIQ and Windows Mobile, both of which turned out to hit the trash can sooner than later. Along with that it also had Symbian phones in its lineup which also went nowhere. Thus Sony Ericsson had one of the most diverse portfolios previously regarding smartphone operating systems.
This meant that Sony Ericsson had a very diverse range of software developers, out of which many were specialized only in certain platforms. There was no common approach for them and Sony Ericsson went with a mixed approach with all Operating Systems instead of concentrating on a single one and as a result its device quality took a large hit. These devices were competing with much more focused solutions and as a result Sony Ericsson started a downhill slide.
Hardware development requirements
Unlike with Android, Sony Ericsson cannot recycle its previously developed hardware for use with Windows Phone 7. A reason for this is that Windows Phone 7 requires a predetermined number of buttons and it has other restrictions on smartphone manufacturers as well which would require additional resources in product development. Thus Sony Ericsson would opt for releasing more devices with Android rather than coming up with a single half-baked device for Windows Phone 7.