Microsoft on Monday replaced the head of its Windows Phone division, which has struggled to gain traction in the mobile phone and device market.

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Microsoft on Monday replaced the head of its Windows Phone division, which has struggled to gain traction in the mobile phone and device market.

Windows Phone President Andy Lees is moving to “a new role working for me on a time-critical opportunity focused on driving maximum impact in 2012 with Windows Phone and Windows 8,” Microsoft Chief Executive Steve Ballmer wrote in a memo to employees.

Taking over as head of the Windows Phone division is Terry Myerson, a corporate vice president who led the engineering work on Windows Phone 7 and 7.5.

Myerson will now also be responsible for Windows Phone development, marketing, and other business functions, Ballmer said in the memo.

It’s unclear whether the move is a demotion or a lateral move for Lees, and Ballmer’s memo does not say whether Lees and Myerson will have new job titles.

Ballmer characterized the move as setting the company up to deliver on the “tremendous potential with Windows Phone and Windows 8.”

Technology blog AllThingsD was reporting Monday that Lees would retain the title of president, though “it’s not clear who will report to him in the new role” and that Myerson “will not, at least for now … get the division president title that Lees had.”

A Microsoft spokeswoman declined to comment further on the reshuffling.

Rob Sanfilippo, a research vice president with independent analysis firm Directions on Microsoft, said it’s too early to tell exactly what the move means.

“I think there’s some reorganization going on to further the development of Windows 8 and the release of that, which is expected next year, as well as trying to align the strategies of Windows 8 and Windows Phone,” he said.

Microsoft hasn’t announced what Windows Phone 8 (if that’s what it will be called) will be like.

There could be a new model for developing applications on Windows Phone 8 that would bring it more in line with developing applications for Windows 8, Sanfilippo said.

Windows 8, which is expected to be released in beta in February, employs a “Metro”-style tile-based user interface similar to that of Windows Phone 7 (and its updated version, Windows Phone 7.5).

But underneath, the two are a bit different.

Developers use Silverlight and XNA to create applications on Windows Phones. And Microsoft is de-emphasizing Silverlight right now, Sanfilippo said.

For Windows 8, Microsoft is emphasizing other technologies developers are using to write apps on that platform.

“It would make sense for Microsoft to have a single set of technologies that you use on both Windows Phone and Windows 8,” Sanfilippo said.

The Windows Phone operating system has had a hard time gaining market share since its debut more than a year ago.

Despite the well-reviewed Mango update (officially called Windows Phone 7.5) this fall, as well as the debut of the first handsets resulting from Windows Phone’s partnership with Nokia, the platform has been struggling.

In the third quarter, Microsoft’s smartphone platforms had 1.5 percent of worldwide market share, down from 2.7 percent a year ago, according to research firm Gartner.

Lees, a Microsoft veteran, was named president of the Windows Phone division in October 2010. He had been a corporate vice president in the company’s Server and Tools business and, before that, spent a decade in Microsoft’s U.K. division.

Myerson came to Microsoft in 1997 after Microsoft acquired Interse, a company he founded. For eight years, he headed the team developing Exchange, Microsoft’s popular corporate email, contacts and calendar software.