The Redmond, Washington-based personal computer software powerhouse said the update to its Windows Phone operating system, code-named "Mango," features over 500 new features and faster browsing with Internet Explorer 9 (IE9).
"This marks the point in the development process where we hand code to our handset and mobile operator partners to optimize Mango for their specific phone and network configurations," Windows Phone corporate vice president Terry Myerson said in a blog post.
Microsoft unveiled Mango in May, promising it will be available by year's end for free to existing Windows Phone 7 customers and will ship on new phones from Samsung, LG and HTC and new partners Acer, Fujitsu and ZTE.
Microsoft said it is also working on a Mango handset in its labs with new partner Nokia, the Finnish mobile phone titan which announced in February it would begin using Microsoft's platform as its smartphone operating system.
When Mango-powered phones hit stores they'll likely be facing competition from a new iPhone from Apple and the latest versions of handsets running Google's Android software.
According to Gartner, Android will power nearly half of the smartphones worldwide by the end of next year with a 49.2% market share.
The market share for the iPhone's was forecast to remain relatively stable at 18.9% in 2012.
Windows will account for 5.6% of the smartphone market at the end of 2011 but will rise to 10.8% in 2012, according to Gartner.
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