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Verizon launches Samsung smart phone

U.S. cellular carrier Verizon Wireless begins selling a Samsung smart phone that uses an Intel processor and a Microsoft operating system.

Cellular carrier Verizon Wireless has begun selling its first smart phone to use a Microsoft operating system.

As expected, Bedminster, N.J.-based Verizon announced on Monday that it was offering the Samsung SCH-i600 phone, which features an Intel chip, for $499.99. The U.S. carrier is offering a $100 rebate on that price to customers who sign a two-year agreement for a monthly calling plan of $39.99 or greater.

Verizon and Samsung are both partners of Microsoft and have worked with the software giant to improve its position in the market for combination phone-and-organizer devices.

However, Microsoft's mobile unit remains unprofitable, even though it has seen sales of devices that use its Smartphone software rise after partnering with major carriers and hardware partners. Analysts expect Microsoft's efforts to lag behind those of rival Symbian, which has the support of phone giant Nokia.

In 2003, manufacturers are expected to ship about 1.8 million phones with Microsoft's Smartphone operating system, according to research firm IDC. In comparison, it estimates that about 8.3 million devices running Symbian's operating system will be delivered. By 2007, about 16.5 million Microsoft-powered handsets are projected to ship worldwide, compared with 49.2 million units with Symbian software.

Samsung's SCH-i600 phone The SCH-i600 is the first phone from Samsung to use Microsoft's Windows Mobile smart phone operating system. The handset maker has hedged its bets on software, though, having signed agreements to use operating systems from PalmSource and Symbian in its phones.

Samsung is the second major phone maker in the United States to use Microsoft's software. AT&T Wireless announced late last month that it would sell a Motorola phone that uses Microsoft's Smartphone operating system. Verizon Wireless is a joint venture between Verizon Communications and European carrier Vodafone.

The Samsung phone includes a 200MHz Intel XScale PXA255 processor, 32MB of memory, a color screen and a Secure Digital expansion slot. It runs on Verizon's CDMA (Code Division Multiple Access) cellular network.

On Monday, Verizon also announced the launch of a store that will sell application downloads, set up in partnership with online retailer Handango. Customers will be able to buy a variety of software titles that they can add via a PC or over the air.