US software giant Microsoft has teamed up with French phone manufacturer SAGEM to deliver a new broadband-enabled consumer device, the SAGEM WA3050, both companies announced in Paris Thursday. The device will be in UK shops by Christmas, according to a Microsoft spokesman. The announcement highlights growing convergence between phones and handheld computers in the consumer marketplace and shows Microsoft's eagerness to stake a claim to this potentially lucrative area. The SAGEM WA3050 will use Microsoft's Pocket PC operating system and be compatible with the current European mobile phone standard GSM (Global System for Mobile) as well as the new, faster GPRS (General Packet Radio Service) data transfer system. The device combines mobile phone functionality with handheld computer features, including stripped down versions of Microsoft Office applications. Although the division between phone and handheld computer is becoming increasingly blurred, Microsoft sees the WA3050 as a wireless enabled pocket PC rather than a next generation mobile phone, according to a spokesman. Microsoft is currently working on a smartphone platform of its own, codenamed Stinger, which is to deliver functionality similar to the SAGEM device, but in a much smaller package. Microsoft has not yet finalised a launch date for Stinger. GPRS, which is based on GSM and has started to roll out in parts of the UK, will boost the quality of content that is currently available on Internet-enabled Internet phones. BT Cellnet, which runs the UK's only national GPRS network, claims that by the end of the year its service will be running at 40kbit/s, compared to 9kbit/s with GSM. Take me to the Mobile Technology Special Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read previous letters.