Microsoft has confirmed that Robbie Bach, the head of its floundering Entertainment and Devices (E&D) Division, and J Allard, the unit's CTO and father of Courier, the dual-screen tablet PC that Microsoft recently cancelled, are both out, retired, as the company's battle over consumer devices with Apple and Google warms up.

The reorganization will see Bach stick around for a few months for the nominal transition and Allard, who's already on sabbatical, transition to a role as some kind of advisor to Microsoft CEO Steve Ballmer, a reference point for designs and UIs.

Bach is evidently not going to be replaced. Instead Microsoft means to have SVP Don Mattrick continue to run the Xbox side of the division and SVP Andy Lees continue to run the phone side, both reporting directly to Ballmer effective July 1. Presumably Ballmer means to take a more hands-on approach.

Gartner says that Microsoft's share of the global phone business was down to 6.8% in the first quarter from 10.2% a year ago while Apple was up roughly five points to 15.4% and Google up eight points to 9.6%.

Microsoft expects its next-generation Windows Phone 7 to be shipping in time for Christmas along with a Wii-like gesture-controlled 3D camera add-on for the Xbox called Project Natal. Phone 7 is supposed mean better touchscreens and improved browsing.

Meanwhile, Microsoft said that now that Office 2010 has been launched to business, Antoine Leblond, SVP of the Office Productivity Applications Group, will take over the Windows Web Services team responsible for stuff like updates, solutions and community for the Windows consumer while Kurt DelBene, SVP in the Office Business Productivity Group, takes over engineering for the Office business.