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Microsoft Plans Windows, Phone Updates for Spring

By Anick Jesdanun

BARCELONA, Spain -- Microsoft (MSFT - Get Report) will update its Windows system this spring to address some of the gripes people have had when they use devices without touch capabilities.

Windows 8 and last fall's 8.1 update were designed for a touch environment. But some of the gesture commands don't translate well when using traditional mouse and keyboard controls.

Among other things, Microsoft will add search, power and settings buttons to the Start page, so that users don't have to figure out how to pull those functions like a sock drawer from the right. There also will be easier, touch-free ways to close apps.

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Microsoft is also updating its Windows Phone system this spring to work better in corporate environments and to bring features desired in fast-growing emerging markets.

The announcement came Sunday before the Mobile World Congress wireless show in Barcelona.

Many of the changes are geared at reducing manufacturing costs.

In essence, Microsoft is relaxing hardware requirements. For instance, there will no longer be a requirement that phones have a physical camera button and three control buttons on the front. That can be done through software instead, the approach used in many Android phones. Meanwhile, tablets and personal computers won't need as much memory and storage as before.

Microsoft is also allowing phones to support two SIM cards, something in demand in China, India and other emerging markets where prices and plans vary so much that people switch services constantly for the best deals. For developed markets, Microsoft plans improvements for corporations, including VPN support on phones that will let people access work networks securely.

More details on the phone changes are expected at Microsoft's Build conference for software developers in April. Microsoft said nothing about pricing, although these updates have typically been free to download. The company also did not disclose the name of either Windows update.

Microsoft also announced the availability of a Facebook (FB) Messenger phone app in the next few weeks.

Two years ago, Microsoft used Mobile World Congress to release a test version of its Windows 8 operating system, months before its October 2012 debut.

The system was a response to the growing popularity of smartphones and tablet computers, which have been siphoning sales from personal computers running Windows. Windows 8 emphasizes touch controls, as mobile devices do, and borrows much of its look and feel from Microsoft's Windows Phone system for smartphones.

Many consumers, however, hate having that approach on PCs. Research firm IDC blamed Windows 8 for accelerating a decline in PCs -- by 14% in the first three months of 2013, the first full quarter with Windows 8.

Just one year after the Windows 8 launch, Microsoft issued a free update to address some of the gripes. The system now lets people run more than two apps side by side, for instance, and its Internet Explorer browser lets people open more than 10 tabs without automatically closing older ones. Windows 8.1 also introduced features, including a universal search to access files stored on the computer along with Web content on the Internet.

Joe Belfiore, Microsoft's vice president of operating systems, said many of the gripes have come from people who use non-touch devices. Although 40% of Windows 8 devices sold in the U.S. are now touch-enabled, he said, the new update will make it easier for the remaining, non-touch users.

He said the company stood by its decision to emphasize touch in Windows 8, notwithstanding the latest changes. He said 200 million Windows 8 licenses have been sold so far.

The announcement comes amid speculation that Nokia, (NOK - Get Report) a longtime Windows Phone supporter, is planning a phone based on the rival Android system from Google (GOOG). Microsoft is also in the process of buying Nokia's phone business and patent rights in a 5.4 billion euros ($7.3 billion) deal expected to be completed by March 31.

Belfiore said Nokia is still an independent company, so "what they do as an independent company is what they do." He said Microsoft has been happy with many things Nokia has done, and "some things we may be less excited about. Whatever they do, we are very supportive of the relationship with them."

The Nokia deal is part of Microsoft's attempt to give Windows Phone a boost in a world dominated by Apple's (AAPL) iPhones and devices running Google's Android system. During Sunday's presentation, audience members chuckled when Microsoft boasted that it had surpassed BlackBerry, (BBRY) a struggling operating system.

Microsoft also got a new CEO this month: Satya Nadella, a 22-year Microsoft veteran who had been in charge of the company's small but growing business of delivering software and services of the Internet. He replaced Steve Ballmer, who had struggled to steer Microsoft from PCs to mobile.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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