Windows Mobile 7

Microsoft's long and winding road toward regaining lost ground in the cell phone business will reach an important milestone in Barcelona next month. At the annual Mobile World Congress event, Microsoft will at long last show off Windows Mobile 7--its oft-delayed major revamp of the decade-old Windows CE code base that has been at the core of its mobile operating system since the days of challenging the Palm Pilot.

Sources told CNET that Microsoft is still planning to finalize the code for Windows Mobile 7 by summer in order to have the new software on devices that ship before the end of the year.

Separately, though, Microsoft is also working on a new consumer phone line, early pictures of which cropped up last year, that is designed to be the next generation of the Sidekick product line that Microsoft inherited with its acquisition of Danger.

Although it is not a widely rumored "Zune Phone," the new consumer device is based on Windows Mobile and likely to be able to connect to Zune and other consumer services that Microsoft has been developing for some time now, sources said. That product, also due to arrive this year, should come earlier in the year ahead of Windows Mobile 7 devices.