Update: Orange to offer Microsoft-based Motorola phone

In a move that may help establish Microsoft's long-sought-after credibility in the mobile phone market, mobile operator Orange SA, handset maker Motorola Inc., and Microsoft Corp. intend to announce that Orange will sell a Microsoft-based Motorola phone, sources familiar with the plans said Friday.

The announcement is slated for Sept. 15, the sources said. Photos of what is said to be the Motorola phone running Microsoft's software have started to crop up on Internet rumor sites.

Microsoft's U.K. public relations agency for mobile devices dismissed talk about an announcement as "speculation," but confirmed a briefing next week for journalists involving Microsoft partners and related to an announcement coming Sept. 15.    

Spokespeople for Orange and Motorola declined to comment.

Orange has been a close Microsoft ally on the smart-phone front. Last October, the Paris-based mobile operator became the first to sell a handset running Microsoft's Windows Mobile software. The devices are mobile phones with expanded PDA (personal digital assistant) functionality.

HTC Corp. and Mitac International Corp., both in Taiwan, already produce smart phones running Microsoft software, which are shipping through channels in Asia and Europe. Samsung Electronics Co. Ltd. has also said that it will deliver a Microsoft-powered smart phone later this year.

Adding Motorola to the list of handset makers that use its software is a big deal for Microsoft as it tries to establish itself in the mobile phone market, said Ben Wood, principal analyst with market researcher Gartner Inc.

"It has to be good news for Microsoft because it adds credibility. If this phone is launched, it will be the first commercially available Microsoft smart-phone product from a leading manufacturer," he said. Motorola is the world's second largest handset maker after Finland's Nokia Corp.

With Motorola's help, Microsoft-based phones can be made more attractive to a larger number of buyers, according to Wood.

"One Microsoft smart phone is very similar to another. Motorola can add some of the refinement that has been lacking in other products when it comes to design, quality of the plastic, the keypad, etcetera," he said.

However, Microsoft's phone software is not the primary phone operating system for Motorola. The company has committed to Linux and Java. "There is no question, Java on top of Linux is their primary focus for their handsets in the future," Wood said.

Last week Motorola said it is negotiating the sale of its 19 percent stake in Symbian Ltd. to Nokia and Psion PLC. Symbian is the developer of the namesake smart-phone operating system that rivals Microsoft's product.