Microsoft Kicks Off New Phones in Europe

Microsoft (MSFT) has unleashed a global assault on the smartphone market, launching a range of new phones running on new software, and setting up a showdown with Google's Android phones and the iPhone. However, telecoms experts were left unconvinced that the new phones would be good enough to overhaul the IT giant's decline in market share.

Yesterday, Microsoft chief executive Steve Ballmer was in London to unveil the Windows phones programmed with its 6.5 operating system. The group expects 30 phones in more than 20 countries to launch with the technology by the end of the year.

Mr. Ballmer said: "A Windows phone lets people take their entire world of digital information, communications, applications and entertainment with them wherever they go."

Michael Brook, editor of technology magazine T3, said: "This is a hugely important launch for Microsoft, as its hold on the smartphone market has ebbed away, and rivals have stolen a march on them."

The group said the latest operating system will be easy to use, with better browsing capabilities and quick access to services including Windows Live and search engine Bing.

It is also pushing its "My Phone" service, allowing users to manage and back up information stored on their phones, in case the device is broken or lost. The system can track lost phones and lock them to avoid sensitive data getting into the wrong hands

Several operators are set to launch Windows phones in the UK including HTC with its Touch 2, LG, Samsung Omnia, and the Sony Ericsson X2. Peter Chou, the chief executive of HTC, believes its Microsoft phones could have a big impact in the market and raise awareness of the South Korean brand in the UK. "We see a lot of excitement for the product," he said.

The launch boosts its competition with Google (GOOG), which makes the Android operating system. Apple (AAPL) and BlackBerry (RIMM) have developed their own systems, while Nokia (NOK) runs on Symbian.

Microsoft was one of the first companies to develop an operating system for mobile phones, helping create the smartphone market, but has since fallen behind rivals. One industry insider criticised the launch as "a year too late" and said the industry was now waiting for Windows 7.0 next year.

Roberta Cozza, research analyst at Gartner, said: "There are improvements in some of the key weaknesses of its older interfaces, but 6.5 brings too little, too late. The interface is still not competitive enough. We will have to wait for Widows 7, and it will have to be something pretty drastic."

Microsoft hopes the new launch will appeal to business and consumer customers used to its computers and "will have familiar work and play experiences right from their Start button".

Ms. Cozza added that while it was good for business users, "it has had a problem getting to consumers".

The group also launched Windows Marketplace yesterday to take on Apple's App Store. The group has initially put out 246 applications, with over 750 companies working on more. The group said it hopes to bring a "fresh take on the app store".

It will, however, do well to match the success of Apple's initiative. The company, run by Steve Jobs, announced last month that more than two billion applications had been downloaded in a year with close to 85,000 apps available.

Mr. Brook believes that the iPhone will remain out in front this Christmas. "The iPhone is pretty safe this year, given the competition between network operators O2 and Orange, with Vodafone to follow. The device is just so desirable. It's the first one that comes to people's minds."

He added: "Apple won't be beaten this Christmas, but Microsoft has been laying some good groundwork, while Google has also had a good year."

Smartphones line up for festive battleThis Christmas is expecting to see one of the bitterest battles for dominance of the smartphone market yet. Handset makers including HTC and Samsung are launching a range of new devices, while technology companies have updated their operating systems to allow access to more and faster data, as well as updated the traditional mobile interfaces to become more intuitive.

Michael Brook, editor of T3 magazine, believes that the iPhone 3GS, which was launched in June and runs off an operating system developed in house, will continue to rule this Christmas. O2's exclusive hold on the iPhone in the UK has ended, which could spark a price war.

He also picked out the US technology group Palm. Its acclaimed Pre has been named the "closest thing to an iPhone killer", but faces a challenge from the HTC Hero, which operates on Google's feted Android system.

BlackBerry also remains a strong seller, especially with its Curve model, operating on a bespoke system. Mr. Brook also backed the release of Nokia's N97 and N900 smartphones, which run on the Symbian system it owns.

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