By Katie Marsal

Published: 04:00 PM EST (01:00 PM PST)

A new report from Taiwan states that Microsoft intends to debut a touch interface for Windows Mobile 6.5 in early 2010, along with version 7 later that year to compete with the iPhone.

Citing sources at Taiwanese handset makers, DigiTimes reports that Microsoft will launch the latest upgrade to Windows Mobile on Oct. 1, 2009, but that a touchscreen upgrade will come in February of 2010. Following that, Windows Mobile 7 is also expected in the fourth quarter of 2010.

The two operating systems will reportedly represent a dual platform strategy from Apple's rival to the north.

"Microsoft will not phase out Windows Mobile from the market," the report states, "but will lower the OS price when it launches Windows Mobile 7."

Currently, Windows Mobile 6.5 doesn't support capacitive touchscreens, but that may change in early 2010, if the report proves true. The upcoming version was always viewed as an interim product before the launch of Windows Mobile 7, which aims to provide an experience similar to that of the iPhone.

The strategy would allegedly allow the lower-priced Windows Mobile 6.5 to compete with the free, open source Android platform, while the premium Windows Mobile 7 option would be geared toward the iPhone crowd.

With Windows Mobile 6.5, Microsoft intends to launch a store much like Apple's App Store for the iPhone. Windows Marketplace for Mobile would offer third-party applications for download that could be accessed both from the phone and the Web. Microsoft has already attempted to court iPhone developers to its new store, providing specific details on how to port applications from the App Store.