Compal Communication Inc., a subsidiary of massive Taiwanese notebook manufacturer Compal Electronics Inc., has become the latest company to license Microsoft Corp.'s (Nasdaq: MSFT) smartphone operating system, according to reports in the local press.

The high-end color phone is expected to cost between $500 and $600, according to DigiTimes. The company expects to start producing the phone in January and ship 3,000 units or so a month. The paper reports that Compal has been talking to U.S. and European service providers about the phone.

The Microsoft deal is just part of Compal's bigger push into the cell phone market, as the company expects to ship between six and seven million units in 2003. It expects to start making phones soon that will be branded with the "Panasonic" name. Interestingly, Panasonic is one of the trading names of Matsushita Communication Industrial Co. Ltd., a partner of Microsoft's bitter rival, Symbian Ltd. Compal already makes phones for another Symbian partner, Motorola Inc. (NYSE: MOT). Small world, innit?

— Dan Jones, Senior Editor, Unstrung