At an event in San Francisco, Joe Belfiore, corporate vice president of Microsoft and head of its phone division, presented new features of the operating system, and CEO Steve Ballmer presented new handsets.

"There's one more thing that sets Windows Phones apart," said Ballmer. "That is new, killer hardware."

The flagship of the Windows Phone lineup is the Nokia 920, built out of a partnership between the two companies. It will be available through AT&T in the U.S. in November.