It’s not true that CE could not support multitasking. Originally CE up to 5.0 had a limitation in the number of processes it supported (32), in order to support

It’s not true that CE could not support multitasking. Originally CE up to 5.0 had a limitation in the number of processes it supported (32), in order to support more performant task switching (no TLB flushes for one) - though it did not have such a tight limitation on number of threads. However the version of CE (6, released way back in 2006) that was released on Windows Phone did not have this restriction and version 7 released in 2011 also supported SMP. Windows CE was really not an entirely incapable OS (and I personally despised it). Its real annoyance was having a completely non-standard bastardized/limited Win32 API which made it both an odd ball embedded RTOS and only vaguely similar to the API of Windows NT. Despite this it had considerable adoption in industrial computing — never a huge market though. It’s hard to say this was a real problem though as no one considered OS X to be a phone OS before 2007 either. The bigger issue is that clearly MS wanted out from under CE before the phone was even released. The limitations in Phone 7 were higher level, not due to the underlying kernel.