Microsoft CEO Steve Ballmer launches Windows Phone 7 Series at the Mobile World Congress. Photo / AP

BARCELONA
- Apple rocked the wireless business by combining the functions of a
phone and an iPod. Now, more than two years later, Microsoft has its
comeback: phone software that works a lot like its own Zune media
player.

The software, unveiled at the Mobile World Congress, is a dramatic
change from previous generations of the software that used to be called
Windows Mobile.

But Microsoft is, for now, sticking to its model of making the software
and selling it to phone manufacturers, rather than making its own
phones.

Microsoft's mobile system powered 13.1 per cent of smart phones sold in the US last year, according to research firm In-Stat.

That made it No 3 after Research In Motion's BlackBerry and the iPhone.

But Microsoft has been losing market share while Apple and Google's Android gained.

All
the while, the market is becoming increasingly important. People are
spending more and more time on their phones, and the devices steer
people to potentially lucrative web services and ads.

Phones
with the new software will be on the market by the holidays, Microsoft
said. All four major US carriers will offer phones, just as they sell
current Windows phones.

The new ones won't be called "Zune phones," as had been speculated. The software will be called "Windows Phone 7 series."

Forrester Research analyst Charles Golvin said the new software looked
promising, but that it was also Microsoft's "final chance to get it
right."

He notes that those who have current Windows phones don't seem excited
about the brand - many of them believe their phones are made by Apple
or Nokia, according to his firm's research.

Andy Lees, senior vice president of Microsoft's mobile communications
business, said Windows Mobile suffered from the company's chaotic
approach to the market.

The software maker gave phone hardware makers and wireless carriers so
much freedom to alter the system and install it on so many different
devices that none worked the same way.

As a result, while other phone vendors such as Apple linked their
hardware and software tightly to ensure a better experience, Windows
Mobile might not have looked like it quite fit on a certain handset.

With the new software, "We really wanted to lead and take much more
complete accountability than we had in earlier versions of the Windows
phone for the end user experience," CEO Steve Ballmer said at the
Barcelona launch event.

Microsoft is imposing a set of required features for Windows phones.
Manufacturers must include permanent buttons on the phone for "home,"
"search" and "back"; a high-resolution screen with the same
touch-sensing technology as the iPhone; and a camera with at least 5
megapixels of resolution and a flash. Hardware QWERTY keyboards will be
optional.

A test device from Asus, which Microsoft used to demonstrate the new phone software for The Associated Press in Redmond, Washington, also had a front camera and a speaker.

The iPhone's success has spurred lots of look-alike phones with screenfuls of tiny square icons representing each program.

Just as it did with the Zune, Microsoft has tried to avoid an
icon-intensive copy of that setup. Instead, it relies more on clickable
words and images pulled from the content itself.

For example, if you put a weather program on the device's home page, it
shows a constantly updated snapshot of conditions where you are, rather
than a static icon that you have to click in order to see the weather.

The idea of pulling information from different websites, like Facebook,
and presenting them on the phone's "home" screen isn't unique to
Microsoft: Motorola and HTC have created such software for their own
phones.

Windows
Phone 7 Series borrows the clean look of the Zune software, departing
from the more "computer screen" look of earlier Microsoft efforts.

These were also reliant on the user pulling out a stylus for more
precise manoeuvring, while the software is designed to be used with the
fingers. It's not clear how older third-party application designed for
the stylus will work on the new phones.

Most of the built-in applications complement or connect with existing
Microsoft programs or services, such as the Bing search engine.

The games "hub" connects to an Xbox Live account and lets players pick
up where they left off with multiplayer games. They will even be able
to play games against PC users.

Microsoft also turns to the Zune programming for the phones'
entertainment hub, much in the way the iPhone's music library is called
iPod. And when users plug the phone into a PC, the Zune software pops
up to manage music, movies and podcasts.

About 18 months ago, Microsoft stopped most improvements to its
existing smart-phone operating software and started from scratch on
Windows Phone 7 Series.

Microsoft "is resolved at a company level to be successful in mobile,"
Lees said. He indicated Microsoft is willing to spend hundreds of
millions of dollars on marketing to ensure it's successful.

Microsoft CEO Steve Ballmer launches Windows Phone 7 Series at the Mobile World Congress. Photo / AP

BARCELONA
- Apple rocked the wireless business by combining the functions of a
phone and an iPod. Now, more than two years later, Microsoft has its
comeback: phone software that works a lot like its own Zune media
player.

The software, unveiled at the Mobile World Congress, is a dramatic
change from previous generations of the software that used to be called
Windows Mobile.

But Microsoft is, for now, sticking to its model of making the software
and selling it to phone manufacturers, rather than making its own
phones.

Microsoft's mobile system powered 13.1 per cent of smart phones sold in the US last year, according to research firm In-Stat.

That made it No 3 after Research In Motion's BlackBerry and the iPhone.

But Microsoft has been losing market share while Apple and Google's Android gained.

All
the while, the market is becoming increasingly important. People are
spending more and more time on their phones, and the devices steer
people to potentially lucrative web services and ads.

Phones
with the new software will be on the market by the holidays, Microsoft
said. All four major US carriers will offer phones, just as they sell
current Windows phones.

The new ones won't be called "Zune phones," as had been speculated. The software will be called "Windows Phone 7 series."

Forrester Research analyst Charles Golvin said the new software looked
promising, but that it was also Microsoft's "final chance to get it
right."

He notes that those who have current Windows phones don't seem excited
about the brand - many of them believe their phones are made by Apple
or Nokia, according to his firm's research.

Andy Lees, senior vice president of Microsoft's mobile communications
business, said Windows Mobile suffered from the company's chaotic
approach to the market.

The software maker gave phone hardware makers and wireless carriers so
much freedom to alter the system and install it on so many different
devices that none worked the same way.

As a result, while other phone vendors such as Apple linked their
hardware and software tightly to ensure a better experience, Windows
Mobile might not have looked like it quite fit on a certain handset.

With the new software, "We really wanted to lead and take much more
complete accountability than we had in earlier versions of the Windows
phone for the end user experience," CEO Steve Ballmer said at the
Barcelona launch event.

Microsoft is imposing a set of required features for Windows phones.
Manufacturers must include permanent buttons on the phone for "home,"
"search" and "back"; a high-resolution screen with the same
touch-sensing technology as the iPhone; and a camera with at least 5
megapixels of resolution and a flash. Hardware QWERTY keyboards will be
optional.

A test device from Asus, which Microsoft used to demonstrate the new phone software for The Associated Press in Redmond, Washington, also had a front camera and a speaker.

The iPhone's success has spurred lots of look-alike phones with screenfuls of tiny square icons representing each program.

Just as it did with the Zune, Microsoft has tried to avoid an
icon-intensive copy of that setup. Instead, it relies more on clickable
words and images pulled from the content itself.

For example, if you put a weather program on the device's home page, it
shows a constantly updated snapshot of conditions where you are, rather
than a static icon that you have to click in order to see the weather.

The idea of pulling information from different websites, like Facebook,
and presenting them on the phone's "home" screen isn't unique to
Microsoft: Motorola and HTC have created such software for their own
phones.

Windows
Phone 7 Series borrows the clean look of the Zune software, departing
from the more "computer screen" look of earlier Microsoft efforts.

These were also reliant on the user pulling out a stylus for more
precise manoeuvring, while the software is designed to be used with the
fingers. It's not clear how older third-party application designed for
the stylus will work on the new phones.

Most of the built-in applications complement or connect with existing
Microsoft programs or services, such as the Bing search engine.

The games "hub" connects to an Xbox Live account and lets players pick
up where they left off with multiplayer games. They will even be able
to play games against PC users.

Microsoft also turns to the Zune programming for the phones'
entertainment hub, much in the way the iPhone's music library is called
iPod. And when users plug the phone into a PC, the Zune software pops
up to manage music, movies and podcasts.

About 18 months ago, Microsoft stopped most improvements to its
existing smart-phone operating software and started from scratch on
Windows Phone 7 Series.

Microsoft "is resolved at a company level to be successful in mobile,"
Lees said. He indicated Microsoft is willing to spend hundreds of
millions of dollars on marketing to ensure it's successful.