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Windows Phone 7 takes aim at Apple

Device to offer a variety of entertainment elements

While Microsoft’s previous efforts in mobile technology haven’t generated a lot of support or enthusiasm, the company is incorporating a variety of entertainment elements into its upcoming phones — which could be key to winning marketshare.

A trio of handsets featuring Windows Phone 7 — which many analysts feel is the company’s last chance to make a real impact in the mobile space — will hit AT&T stores on Nov. 8. Other carriers will follow shortly thereafter. (Some European customers will get the phones on Oct. 21.)

Rather than simply shrinking the traditional Windows operating system onto a phone as the company has done previously, the new devices more closely resemble Apple’s iPhone featuring colorful, compartmentalized touch-screens, easier access to core functions and an app store. But each Windows Phone 7 series will also allow users to play Xbox Live games, watch selected programming on AT&T’s U-verse service and download and play music and video through the company’s Zune division.

“We wanted to make a modern phone — modern in design, modern in its principles. We’ve taken a very different path,” said Microsoft CEO Steve Ballmer at a launch event in New York. Microsoft’s long-promised integration with AT&T’s U-verse cable service will be a key component of the phones. The service’s 2.5 million subscribers will be able to watch select programming via Windows Phone 7-equipped handsets, including “Mad Men,” “Nightline” and “The Wizards of Waverly Place,” and schedule their home DVRs remotely.

Rather than streaming video, however, the phones will download programs to the phone via WiFi, letting people watch at their convenience — and allowing for video playback on planes or other places where cellular service is not available.

Non U-verse subscribers will also be able to access these features for a $9.99 monthly fee.

Subscribers to Microsoft’s Zune music service will be able to listen to their music collection on their phones as well. Rather than offering music a la carte as iTunes does, Microsoft offers a $15 monthly subscription service, allowing people to download as much music as they’d like — which remains playable until the subscription expires. (Users are also allowed to permanently download 10 tracks per month.)

The integration will allow Windows Phone 7 devices to compete with the iPhone’s musical aspects.

For gamers, Microsoft will closely incorporate Xbox Live — the 25 million member strong online component of its console gaming division — into the phones. Users will be able to play Xbox Live games and boost their Gamerscore — an achievement-based point system that has been extremely popular among Xbox owners.

Third-party publishers, including Electronic Arts, have already committed to support Windows Phone 7 with a variety of titles, including “Need for Speed” and “The Sims”.

“We took a step back and said we have all these awesome properties throughout the company… we really need to bring those to the phone and not keep them separate,” said Liz Sloan, senior marketing manager at Microsoft.

Microsoft holds just 5 percent of the mobile market, according to research firm Gartner, down from 9 percent a year ago. Its most recent release, the Kin, was abandoned after just six weeks on the market.

Reaction to Windows Phone 7, however, has been encouraging. While Microsoft isn’t announcing sales projections, it’s betting big on the phones. Sixty mobile operators around the world in 30 countries will carry them this year.

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