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M’SOFT, LG ‘DIAL’ UP 5-YR. DEAL

By
Bloomberg
Published Feb. 17, 2009, 6:48 a.m. ET

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 with 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 Web.

Microsoft is also adding software with touch controls and a store that offers phone applications – features that are already available on the iPhone.

While 46 percent 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 LLC, a market research firm in Los Angeles.

Microsoft Chief Executive Officer Steve Ballmer unveiled the software – Windows Mobile 6.5 – yesterday at the GSMA Mobile World Congress in Barcelona, Spain.