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"We don't make phones ourselves. We don't have any plans to make phones ourselves," said Robbie Bach, president of Microsoft's entertainment and devices division, speaking to the San Francisco Chronicle.

However, the company does plan to carry on pushing its Windows Mobile operating system to various handset manufacturers.

"We will outsell the iPhone, we will outsell the BlackBerry," continued Bach, explaining that there will always be a demand for a variety of handsets, and opportunities for Microsoft to continue selling Windows licenses.

"Different people want different types of phones. We think that

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is going to continue, and we think Windows Mobile is in a great position to service all those different opportunities."

Microsoft announced last month that it expected "at least" 50% growth in sales of Windows Mobile in the next two years as sales of smartphones rapidly increase, although there are several threats to such optimistic growth figures.

Nokia claims it has plans to extend the range of devices running on Linux, and several manufacturers have already pledged to release handsets based on Google's open-source Android operating system before the end of the year.

Apple is expected to release a 3G version of the iPhone later today. The addition of 3G will make the handset a more viable business machine, and could pose a threat to the market share of devices running Windows Mobile.