The Mobile World Congress in Barcelona next week will be crucial for Microsoft, Steve Ballmer & Co., trying to show an industry increasingly skeptical that the company has what it takes to be a strong competitor in mobile phones. And it looks like Microsoft will be bringing the goods, unveiling the next version of its Windows Mobile operating system, according to a report by Nick Wingfield The Wall Street Journal.

The Wall Street Journal notes that Microsoft has become more involved in the design of hardware for Windows Mobile devices, and the paper cites anonymous sources saying that Windows Mobile 7 “sports a revamped user interface that resembles the look of Microsoft’s Zune HD music player.” Could that be the source of confusion that has led to all the “Zune phone” speculation over the past couple years?

Microsoft, which was early to market with its operating system Windows Mobile, has seen its market share decline to competition from rivals such as Apple’s iPhone and, more recently, Google Android devices.

Ballmer spoke at the Mobile World Congress early yesterday morning, Pacific Time. A webcast will be available via this Microsoft page, and we will have full coverage as events unfold.

Miamisburg, Ohio, February 11, 2010 / PRNewswire / – NewPage Corporation, the largest North American producer of coated paper, announced today the launch of a new podcast from the work of Robert Bernard, chief strategist of the environment for Microsoft. The episode is the first On Paper podcast to launch on Zune, Microsoft’s entertainment platform for podcasts, videos and music. Designed to bring about positive change in the area of sustainability, this biweekly broadcast is now in its third season and continues to grow in listenership, reaching over one million downloads, making its launch on Zune an appropriate next step for the series.

In this episode of On Paper, Bernard explains how technology and software can be used to generate real change in the global environment. Bernard identified three priority areas in which Microsoft may have a positive impact on sustainable development: energy efficiency important in enabling and use of IT, accelerating scientific research based on environmental issues and to become responsible leaders of the environment on a daily basis by the way we conduct our business.

Working as a founder and board member of the Green Grid organization, Microsoft recognizes the importance of working with other industries to solve the problem and the problem of energy efficiency. According to Bernard, the organization is on track to reach its 2012 target of reducing CO (2) emissions by 30 percent.

“We went from a world where we had a lot of interested people, to a world where now all of our field staff who talk to our customers and many of our engineers who are writing software, are thinking about and acting on the new vision and paradigm that we’re moving toward,” Bernard explains. “We are undertaking this incredible creative power and we do that people start to think and act in a greater dimension, with a deliberate emphasis on energy and environmental sustainability.

There’ve been rumours circulating that software giant Microsoft entered the telephony market.

Most of the rumours that were based on Redmond coming up with a Zune phone, which will aim at killing off of Apple’s iPhone. However, it seems that Microsoft could have set sights a little lower.

Microsoft and MediaTek have said they formed a strategic alliance to provide a rich multimedia smartphone designed primarily to emerging markets.

The kit will be built on the Windows Phone 6 platform. They’ll be multimedia rich smartphones and will have full touch capabilities and offer advanced communication features.

MediaTek said its partnership with Microsoft will boost the penetration of smartphones in developing countries.

The interesting move is suggests that Microsoft is leaving the smartphone field in the West to Apple. Apple didn’t get into the Chinese market and has not had much success in India. Redmond may be thinking that if they can sell enough of the gear to the cheaper markets it’ll not have to waste time and money chasing the Jobs’ Mob marketing machine.

In recent days, Microsoft has quietly cut prices on the Zune HD through an at least temporary promo. The touch screen multimedia player, now costs $ 190 for a 16GB model at Amazon, or $ 32 less than the initial price, the 32GB model has been reduced by a similar amount to $ 250.

Microsoft’s own store has also dropped its prices by an amount less than $200 for a 16GB Zune HD and $270 for a 32GB edition. Wal-Mart and other retailers are also very similar to Amazon’s price.

Officially, Microsoft has only said that the new prices were part of “sales” and that means it may be temporary, but did not say if or when the promotion ends. The cuts, however, give it about twice as much capacity at the same price as an iPod touch or else a significant discount for similar capacity.

They price drops come as an attempt to spur sales post-holidays and suggest sales have cooled significantly since the September release. Microsoft has implemented such cuts in the past when Zune players weren’t faring particularly strongly and suggests as a result that the effective restart of the Zune line has had little direct impact on the company’s ability to increase its market share. Historically, Microsoft has been about 2 per cent of media player market, while Apple has had more than 70 percent.

There’re a lot of rumors that Microsoft is planning to create its Zune media player in order to compete with the iPhone. In addition, some rumors say it will be introduced with the release of Windows Mobile 7.

According to unconfirmed reports saying that Microsoft will integrate the functionality of the Zune in its smartphone operating system.

But some sources say that the next version will come with a user interface that resembles that found in Microsoft Zune. As it focuses on video and music, is based on the Zune desktop application, but not Windows Mobile Device Center.

Probably Windows Mobile 7 will have similar features compared to the iPhone. It will not have backup for running multiple applications simultaneously, and users cannot install applications from an online store.

Because of all the changes, the new version of the operating system will not be able to run current software.

Companies that develop devices based on this operating system will not be able to customize it as they do it these days.

As for the business usurers they will be offered a second edition of Windows Mobile 7. It comes with standard features and be compatible with other applications.