Microsoft Corp CEO Steve Ballmer displays a Nokia Lumia 920 featuring Windows Phone 8 during an event in San Francisco, California, Oct 29, 2012. [Photo/Agencies]

SAN FRANCISCO - Microsoft on Monday unveiled Windows Phone 8, the new version of its smartphone operating system, representing the software giant's latest move to challenge the market leaders of Apple and Google.

The new smartphone software has a Start screen in the form of square tiles, which can display real-time information such as updates on social networking sites.

Users can personalize the Start screen by pinning their favorite items such as application and photos, and choose from three sizes and 20 colors for the so-called "Live Tiles".

At a media event held in San Francisco, the US state of California, Microsoft executives touted new users-friendly features including "Data Sense", which helps users conserve their data allowance through ways such as compressing Web images.

"Our way is to put people at the center of the experience, not icons for apps," Joe Belfiore, corporate vice-president of Windows Phone Program Management at Microsoft, said at the event.

The smartphone software shares the same user interface and technology core with Windows 8, Microsoft's newly-launched operating system for personal computers and tablet computers, making it easier for developers to create apps for both platforms and for users to run similar programs across different devices.

Windows Phone 8 also offers support for hardware specifications including multi-core processors and near-field communication (NFC), a technology that allows users to pay with their smartphones or connect their phones to other NFC-enabled devices.

Phones running Microsoft's new operating system will be available this weekend in Europe and will continue to go on sale in the rest of the world from November.

Major mobile carriers in the United States including Verizon Wireless, AT&T and T-Mobile will start selling handsets running Windows Phone 8 made by Nokia, HTC and Samsung in the coming weeks, according to Microsoft.

"We had a very different perspective on what a smartphone should be," Steve Ballmer, Microsoft's chief executive officer, said at the press event.

However, same analysts said the company is facing tough road ahead as it attempts to win over consumers from competitors such as Apple and Google.

Numbers from research firm IDC showed that in the second quarter of 2012, Microsoft only had a share of 3.5 percent in the global smartphone market, trailing far behind Google's Android platform, which amassed a commanding 68.1 percent share.

Apple's iOS platform accounted for 16.9 percent of the smartphone market in the quarter.

For Microsoft's phone software, the biggest issue to date has been in customer acceptance of its significantly different user interface, said Nick Dillon, an analyst at research firm Ovum, in a recent report.

While it is an excellent operating system, "it is different from the current status quo of a grid of apps user interface, a change that represents a perceived risk to potential customers, meaning that its benefit is therefore also its biggest challenge," said Dillon.