No Microsoft phone, executive says

Microsoft says services, not OS, is the place to be

He did not specifically mention Windows Mobile 7 and how it might relate to the future of phone services.

But he said the Windows 7 client operating system, which could ship as early as this fall, would factor into the integration of the phone and the PC. Lees said Microsoft is already working to integrate Xbox Live, and Windows Live into its mobile strategy.

"We are getting more integrated," he said.

There is evidence to support Lees. In December expanded its licensing for Exchange ActiveSync and signed up competitors such as Google and IBM.

The wide berth of ActiveSync support will help Microsoft ensure that users can synchronize with its services from any platform regardless of operating system or application.

And the inclusion of photo synchronization in My Phone shows that Microsoft is making a run at providing a no-cost alternative to Apple's MobileMe service.

Lees also said partnerships with device manufacturers such as LG, Sony Ericsson, Samsung and HTC "is a very powerful strength for us."

He added that the industry is at an interesting junction, "the future and explosion is yet to happen," Lees said.

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