Microsoft eyes mobile comeback with new platform

(Microsoft Corp.)

Microsoft unveiled on Monday a new version of its mobile operating system as the US software giant seeks to regain lost ground in the highly competitive smartphone market.

Chief executive Steve Ballmer presented the Windows Phone 7 Series at the Mobile World Congress in Barcelona, Spain, ending months of speculation about what Microsoft had in store for the industry's biggest trade show.

"We're taking a step, I think a big step," Ballmer said, adding that devices fitted with the new software would be available in time for the winter holiday shopping season. "I'm enthusiastic about the direction that we're heading."

"We hope 7 is our lucky number," he said.

Microsoft has been up against strong competition from Internet giant Google's Android, as both newcomers fight for a share of a market dominated by the Blackberry and Apple's iPhone.

"The primary goal of Windows Mobile 7 is clearly to address Microsoft's shortcomings in the consumer mobile market," said Charles Golvin, analyst at research firm Forrester.

"All plaudits for their persistence aside, in my view this is their final chance to get it right," Golvin said.

Google has made a splash in the mobile phone industry with its Android operating system, launched in 2007, and phone makers have announced that they would release several more smartphones with this platform this year.

Smartphones fitted with Microsoft's operating system had 7.9 percent market share in the third quarter of last year, a drop from 11.1 percent in the same period in 2008, according to research group Gartner.

In the meantime its rivals grew: BlackBerry-maker Research in Motion saw its market share increase to 20.8 percent and Apple's iPhone rose to 17.1 percent, according to Gartner.

And Android phones took 3.5 percent of the market in just a few months of existence.

"There is no doubt that this phone market is A, highly competitive, B, highly dymanic and C, super exciting," Ballmer said.

"And there is no question in our minds as we go back a couple of years that we needed... to do some things that were out of the box, clearly differentiated from our past," he said.

In its upgrade, Microsoft completely changed the platform's interface and installed the capabilities of its Zune MP3 player, which has only been available in the United States.

The system includes six "hubs" that group services by themes, such as a "people" inbox that includes emails, text messages and updates from social network activities, or an Xbox Live icon for online games.

Microsoft-powered touch-screen phones will be rolled out later this year in partnership with several device makers including Qualcomm, Samsung and LG, as well as operators from AT&T to T-Mobile and Vodafone, the company said.

But Nicolas Petit, director of Microsoft's mobile division in France, said the software titan had no intention of following its rivals and creating its own phone.

"It is not in our DNA to build hardware," he told AFP. "We have partners who do that better than us."

Google entered the hardware business last month when it launched its own smartphone, Nexus One, in a challenge against another big rival, Apple, which never attends the Mobile World Congress.

In a signal of Google's ambitions to become a leader in the mobile phone industry, chief executive Eric Schmidt will address the Barcelona event for the first time on Tuesday.

Mobile operating systems are the lifeblood of the increasingly popular smartphones, which allows users to surf the Internet, check and send emails, play music, videos and games, and take pictures.

Global shipments of smartphones surged by 30 percent in the last quarter of 2009, according to Strategy Analytics. By comparison, overall handset sales rose by 10 percent in the same period.

In an indication of the growing use of phones with Internet capabilities, the International Telecommunication Union, a UN agency, said Monday that the number of mobile broadband subscriptions would exceed one billion this year after reaching 600 million in 2009.