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Microsoft, who is today partnering with Telstra and HTC to launch their new Windows Mobile 6.5 operating system for smartphones, has refused to deny that they are set to enter the Smartphone market with their own phone.

Speaking at an event in Paris, Microsoft Chief Executive Steve Ballmer played down recent industry talk that the company was developing its own smartphone. But he refused point blank to deny that the company was developing a phone despite repeated questions from journalists.

“We are not here to announce today that we are making phones,” he said

Sources in Taiwan are adamant that Microsoft has been shopping the manufacture of a Smartphone which will be launched in 2010 in an effort to compete with Apple who make and sell their own phone.

One source said “Microsoft has spoken to several manufacturers including, we believe HTC about a Microsoft branded device. What we understand is that it is more handheld tablet with a phone capability than an all out smartphone”.  

The new Windows Mobile 6.5 software which was launched today allows smartphones to play music, open Word and Excel documents, and be synchronised over the Internet. But some analysts worry that the new software is not enough of a leap to keep up with rivals.

Investors generally welcomed the launch, sending Microsoft’s shares up 2.1 percent on the New York Stock Exchange, in a broadly higher market.

 

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