Although Microsoft maintains its grip on the market for PC and PDA operating systems, it hasn't achieved as much success in smart phones -- those increasingly popular devices that integrate address books, e-mail access, Web browsing, and other PDA-type features with basic cell-phone features. That global market is still dominated by Symbian's operating system, which is used on 54 percent of smart phones, and Linux, with 24 percent, compared with just 13 percent for Windows Mobile and 3.5 percent for PalmOS, according market research firm IDC.

But Windows could be turning up on more smart phones, as a result of a new partnership with mobile-phone chipmaker Qualcomm. One of the major manufacturers of high-end chips for smart phones, Qualcomm will develop chips specifically to support Windows Mobile 5.0, Microsoft's current smart-phone operating system. Many experts expect that the deal could help cell-phone makers crank out new phones faster, and could also lead to Windows Mobile devices that are cheaper, smaller, and less power hungry than in the past.

[For images of Microsoft's Windows Mobile operating system, click here.]

Smart phones containing Windows-ready Qualcomm chips are expected to be available in 2007. The deal with Qualcomm is a "smart move" by Microsoft to gain traction in the emerging U.S. smart-phone market, says Brian Young, vice president for information technology at Creighton University in Omaha. Combining Microsoft with a major wireless chip manufacturer such as Qualcomm, he says, saves each cell-phone maker from having to tweak its system to make Microsoft software work optimally with it, and provides "a lot of good potential to develop applications and tailor content" for smart phones.

The smart-phone market is of course a highly lucrative one, since the devices can cost hundreds of dollars apiece. Business people who travel and work on the road or from home are buying millions of them to stay connected to their offices -- 31.5 million smart phones were sold globally in 2005, a 70 percent increase over 2004, according to research firm In-Stat. And as more content, such as video and music, becomes available for downloading to phones over broadband wireless networks, the devices are finding a niche outside business environments as well.

Using the new Qualcomm chip, Windows Mobile will run on the same chip that controls the phone's wireless operations, instead of a separate chip as in earlier phones. Consolidating functions onto a single chip saves both space and power, says Greg Brewster, associate dean in the School of Computer Science, Telecommunications, and Information Systems at DePaul University in Chicago.