Looks like Tim's skepticism regarding Sony Ericsson jumping on board Windows Phone 7 was justified, though perhaps for other reasons. While no mention of conflicting interests in gaming (Playstation vs Xbox), SE seems to be not too excited about the strict hardware requirements and lack of customization allowed on Microsoft's OS.

Sony Ericsson France CEO Pierre Perron summed up their position as thus:

With Windows 7 we run the risk of standardising our smartphones. We would be obliged to compete only on design on price, which we want to avoid.

The bit of silver lining here is that SE is in talks with Microsoft about carrying the OS, so that part is true.  But considering how unremarkable SE's offerings have been of late, we can't say we're exactly forlorn over this decision if it sticks. If it's one thing SE should avoid, is adding their "special touch to the software. Take a hint, guys.

Source: TelecomPaper; via wmpoweruser