LG to make Windows Mobile its primary smartphone OS

In a big win for Windows Mobile, LG -- the world's third largest mobile handset maker -- has agreed to make Microsoft's struggling and aging operating system the primary for all its smartphones.

The move is a gamble for LG, which doesn't have its own smartphone platform like market leader Nokia. Samsung, which has been the fastest growing mobile company and controls the #2 spot, said it will continue to dabble in Symbian, Windows Mobile and Google's Android platforms.

In exchange for picking Microsoft, LG will work closely to better integrate the operating system with devices, which has proven to be a problem for Windows Mobile in the past. LG has created a new user interface called S-Class, which makes Windows Mobile more modern and touch-screen friendly. The companies will create joint teams for research and development, and partner on marketing efforts.

LG says it plans to deliver 50 new phones based on Windows Mobile due to the agreement, which was first signed as a memorandum of understanding in November. In 2009 alone, the number of Windows Mobile-based handsets from LG will increase ten-fold, the companies said.

Microsoft has faced growing competition in the smartphone market, largely from Apple's iPhone which has quickly gobbled up 9 percent of total sales behind Microsoft's 12 percent (up from 11 percent in 2007). The lack of growth can be largely attributed to the company's slow development; Windows Mobile 6 launched 2 years ago with few upgrades, and 6.5 won't be ready until late 2009. Nokia-backed Symbian and Research in Motion's BlackBerry devices, meanwhile, continue to dominate the industry.