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Microsoft signs LG phone deal, updates Windows Mobile

February 17, 2009|Bloomberg News

Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. and introduced updated phone software in a bid to catch up to Apple Inc.'s popularity with consumers.

LG, the third-biggest phone maker, will produce about 50 models that run Windows over the next five years, said Scott Rockfeld, a director in Microsoft's mobile business. Seoul-based LG will use the software as its primary program for smart phones, devices that can send e-mail and browse the Internet.

Microsoft is also adding software with touch controls and a store that offers phone applications -- features that are already available for the iPhone. Although 46% more Windows phones were sold last year than iPhones, the iPhone is growing faster and has gained a cult following among consumers. Microsoft also faces a new threat from Android, a mobile operating system from Google Inc.

"First they dismissed Apple, then they ignored them -- they squandered a good year and a half letting them build up mindshare and a developer network," said Michael Gartenberg, an analyst at Interpret, a market research firm in Santa Monica. "It's important for them to get the word out that Windows Mobile is viable and is evolving."

Microsoft Chief Executive Steve Ballmer unveiled the software -- Windows Mobile 6.5 -- Monday at a trade show in Barcelona, Spain. Phones with the program will be available later in the year, Ballmer said. The company will also offer a service that synchronizes address books, calendars, photos and text messages with users' computers.

Apple has a similar program called MobileMe, which costs $99 a year. Microsoft's service is free and has more features, said Andy Lees, senior vice president of the company's mobile communications business.

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