updated 2/14/2005 2:32:45 PM ET 2005-02-14T19:32:45

Microsoft Corp. announced a partnership with Singapore-based Flextronics International Ltd. on Monday to market a new range of high-specification phones, running Windows Mobile, to handset makers and network operators worldwide.

The deal between the world’s No.1 software company and the largest contract manufacturer of handsets comes as companies like Motorola Inc. and Samsung Electronics Ltd. are pushing to improve profits on high-tech ’smartphones’ and wireless services.

Microsoft and Flextronics said the new “Peabody” phone platform — a blueprint from which any number of new models can be designed to order — would cut costs and production time.

“That’s the significance of this partnership — extremely high-volume, low-cost devices that don’t have any concessions in terms of functionality,” said John Starkweather, product manager at Microsoft’s mobile devices division. (MSNBC is a joint venture of Microsoft and NBC.)

He declined to give any figure for the expected cost reductions.

The announcement came on the first day of the 3GSM World Congress, an annual mobile industry gathering in Cannes, in southern France.

3-way fight for supremacy
Microsoft’s Windows Mobile operating system for phones is battling for market share against rivals Palm OS and Symbian, which is the clear leader in Europe.

Starkweather said the new phones will include cameras for both video and stills, a Windows media player that handles a broad range of formats and “seamless integration with Outlook (PC software) applications, calendar, e-mail, tasks, contacts — all wirelessly.”

The specifications can also be customized for clients’ individual needs, he said — including significant security improvements for the corporate market, such as the ability to erase the phone’s memory by remote access.

“If someone was to lose that device they will be able to wipe all the data on it,” Starkweather said.

New hardware, software
The Peabody platform runs on GSM networks — the dominant standard in Europe and much of the world — and slightly faster GPRS. Flextronics also said it is working on a new range of devices based on the next generation of Windows Mobile software to run on EDGE, the prevalent third-generation or “3G” standard in North America.

Redmond, Wash.-based Microsoft also unveiled a new software package designed to smooth wireless service delivery, overcoming interoperability problems between different network operators, service providers and handset types.

The U.S. software giant said the new “Connected Services Framework” will be launched by three mobile operators: Bell Canada, Celcom Malaysia and Britain’s BT.

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