ZD Net Asia said the software maker has informed some of its partners that it has had to delay the much anticipated update to its cell phone operating system.
The report describes the delay is a significant blow for Microsoft, which has been counting on the next version of WinMo to enable devices that better rival Apple’s iPhone.
It points out that the delay also comes as competition steps up in the smartphone market.
Google is preparing to launch the G1, first phone running its Android operating system, while Apple has its updated iPhone 3G, and new models are also debuting from BlackBerry maker Research In Motion.
While no major update to its core operating system is expected ahead of Windows Mobile 7 other improvements are likely to take place before then, including an improved browser that brings the rendering engine of Internet Explorer 6 onto Windows Mobile.
That update should allow Windows Mobile phones to display rich Web pages, including those that are home to Flash content and Ajax applications.