Microsoft is set to face a tough road in operating system market next year, say analysts.

Their main contention is that many consumers and businesses would discard Microsoft’s windows operating system in favor of new Google Chrome OS which is running on notebooks and netbooks.

A communications analyst, Steve Sechrist, wrote in The Inquirer that the freely available Chrome OS will eventually occupy the place of Microsoft's Windows OS on netbooks, not specifying the time frame for the transition.

Google’s rollout of Chrome may compel Microsoft to make available its flagship desktop operating system for free in order to support sales of its other products, like Office, says another report in Smarthouse.

Microsoft has also introduced a version of its Windows 7 OS for smartphones. Its first foray into the market earlier in 2010 was with the Kin. That was withdrawn due to poor sales after less than three months. The Windows Phone 7 OS has seen more, if modest, success, but still lags far behind the Blackberry OS, Android and iOS for iPhones.

Microsoft is currently offering 5,000 apps for its new Windows Phone 7 OS compared with 200,000 apps available on Android devices and over 300,000 apps for Apple devices.

Also, Microsoft is witnessing its share declining in the browser market considerably over the past one year, while Apple’s Safari, Chrome and Firefox increased their presence.