Software Giant Microsoft Corp. (MSFT) on Sunday announced at the Mobile World Congress 2008 being held at Barcelona in Spain that Sony Ericsson (SNE, ERIC) will launch XPERIA X1, a handset powered by the new Microsoft Windows operating system for the first time under an alliance with Microsoft. With the launch of XPERIA X1 from Sony Ericsson, four of the world’s top five makers of mobile phones will ship Windows Mobile devices in 2008.

In a bid to rake its market share in the mobile software market, following this alliance with Sony Ericsson, Microsoft expects to sell more than 20 million Windows Mobile licenses in fiscal year 2008, making Windows Mobile a leading smartphone platform globally. Microsoft sold 11 million Windows Mobile licenses in fiscal year 2007.

The new handset, which will blend communication and multimedia entertainment for a premium mobile experience, will be launched worldwide in the second half of 2008. The handset is expected to take advantage of the customer’s familiarity of Microsoft Windows and extensive availability of Windows Mobile applications and services. The new handset incorporates a unique arc slider with wide-pitch, easy-to-use keyboard, a 3” clear wide VGA display and high-quality high-finish metal body.

Commenting of the alliance, senior vice president, Mobile Communications Business, Microsoft, Pieter Knook said, “People should be able to have phones that deliver what they need throughout the day and stay connected with today’s broad array of on-demand information and entertainment no matter where they are. Our shared vision with Sony Ericsson is to make the concept of ‘One Phone for Your Life’ a reality and finally give consumers the freedom of true mobility.”

Head of Portfolio and Proposition at Sony Ericsson, Rikko Sakaguchi added, “XPERIA is our promise to think foremost about user experience and to deliver on our goal of providing a true premium experience - anytime, anywhere, anything, with anyone. By working with Microsoft on the XPERIA X1, we have been able to couple our excellence in creating compelling consumer propositions with the productivity capabilities of Windows Mobile to deliver a seamless blend of mobile Web communication and multimedia entertainment within a distinctive design.”

In its pursuit to become the world’s third-largest mobile phone manufacturer, Sony Ericsson also said it would be focusing on India, China and the US as the sales performance in the three countries are very low. To meet the challenges in these countries, Sony Ericsson plans to make cheaper handsets at about $25 each, departing from its strategy to focus on medium and high-priced handsets. Further, the company said it looks to meet its 2011 target through organic growth.

Tags: Handset, sony ericsson, windows mobile software, XPERIA