Microsoft setback after theft of new mobile operating system

by Daniel Farey-Jones, Brand Republic 20-Feb-09, 14:00

LONDON - Microsoft's smartphone battle against Apple and Google has hit a setback after a phone carrying its next generation software was stolen at the Mobile World Congress in Barcelona.

Microsoft is planning to release its Windows Mobile 6.5 software in the final quarter of this year, and had shown it off on a prototype phone at a press conference on Monday.

But the phone was stolen at an industry party the same night, and Microsoft now fears it could become the victim of industrial espionage.

The new system includes a new version of Windows Marketplace, a competitor to Apple's App Store, and gives users a free online backup service for text messages and documents.

The phone was stolen from an executive from Australian telecoms company Telstra, who had been lent it by his chief executive Sol Trujillo.