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Microsoft unveiled on Monday an upgrade to its mobile operating system as the US software giant seeks to regain lost ground in the competitive handset market.
Windows Mobile 7 was made public on the first day of the Mobile World Congress in Barcelona, Spain, ending months of speculation about what Microsoft had in store for the industry's biggest trade show.
The new system, which follows the launch of Windows Mobile 6.5 in October, is "a major new step in our strategy," Nicolas Petit, director of Microsoft's mobile division in France, told AFP.
"It is a total break from what we were doing before," Petit said.
Microsoft completely changed the platform's interface, with a "dynamic screen" allowing users to install his or her favourite icon, from music, to contacts and social networks, he said.
Microsoft has been up against strong competition from telecommunications giant Nokia's Symbian platform and Internet giant Google's Android.
"They do seem to have been pushed on to the backfoot with the Android which seems to have caught them on the hoof," said Jeremy Green, mobile analyst at research firm Ovum.
Google has made a splash in the mobile phone industry with its Android operating system, launched in 2007 in a direct challenge to Microsoft.
Smartphones fitted with Microsoft Windows Mobile had 7.9 percent market share in the third quarter of last year compared with 11.1 percent in the same period in 2008, according to research group Gartner.
The leaders during that quarter were phones with Nokia's Symbian technology, with 44.6 percent market share, followed by BlackBerry-maker Research in Motion (RIM) (20.8 percent) and Apple's iPhone operating system (17.1 percent), according to Gartner.
"A couple of years ago the perception was that the OS war was between Microsoft and Symbian and then suddenly nobody talks about Microsoft anymore," Green said.
"All the running and all the excitement have been about Android," he said.
The first phones fitted with Windows Mobile 7 will be available later this year, Petit said. Microsoft's partners include phone operators AT&T, Orange and Deutsche Telekom and equipment makers Samsung, LG, HTC and Sony Ericsson.
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 to play games online.
Microsoft chief executive Steve Ballmer was to present the new operating system at a press conference later Monday.
Mobile operating systems are the lifeblood of the increasingly popular smartphones, which allows users to surf the Internet, check and send emails, play music and videos, 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.
South Korean mobile phone maker Samsung Electronics announced Sunday that it would launch five new smartphones powered by Android this year, in addition to five other handsets fitted with Samsung's own Bada operating system and a handful with Microsoft's platform.
Google also 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.
