Microsoft and Taiwanese fabless chipmaker MediaTek are collaborating on a smartphone primarily aimed at emerging markets.
MediaTek said its implementation of the Windows Phone 6 platform will drive smartphone penetration in China, where the mobile OS will be cobbled into hundreds of smartphone handset designs.
MediaTek has designed a similar hardware and software platform for Google's Android mobile phone OS which will ship later this year.
"There is a huge thirst for smartphones in emerging markets," Microsoft said in a statement. "For many people, the phone rather than the PC is the main entry point to the Internet, resulting in a high demand for rich communication devices. In order to meet this demand, we have teamed up with MediaTek to facilitate the provision of affordable smartphones," the company said.
The smartphone OS battle is certainly hotting up with Apple having busted into the top five, and Google now putting all its energy into the fight. This week, Nokia reacted by making Symbian open source.
Microsoft has lost market share over the past 12 months. MediaTek will enable manufacturers to produce identical, low-cost phones with either Microsoft or Google inside. It will be interesting to see which proves more popular.