Microsoft Corp. will formally unveil a lineup of smartphones using the revamped version of its mobile operating system on Oct. 11, and AT&T Inc. will begin offering them four weeks later, according to people familiar with the launch plans.

The launch--centered in New York with satellite events elsewhere--is crucial for Microsoft, which has been battered by Apple Inc.'s iPhone and a wave of flashier consumer friendly devices using Google Inc.'s Android mobile software. The software makeover represents one of the software giant's last chances to remain relevant in the mobile world.

"This is critical to Microsoft's overall business," said Avi Greengart, who follows consumer electronic devices for research firm Current Analysis."They are being badly outflanked right now by their competitors."

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Microsoft will receive the marketing support of AT&T, which will be the initial exclusive U.S. carrier to sell the Windows Phone 7 smartphones. AT&T plans to sell the devices the week of Nov. 8. Initially, the telco will offer three handsets--one each made by Samsung Electronics Co., LG Electronics Inc., and HTC Corp.--as it looks to diversify its portfolio of mobile devices beyond the iPhone.

It has been a long, hard stumble for Microsoft, which boasted a strong early presence in smartphones. The company's Windows Mobile operating system was commonly found in the smartphones used by the corporate crowd only a few years ago. But the emergence of the iPhone in 2007 forced other smartphone platforms to step up their game, and Microsoft failed to materially update its software and quickly fell behind.

In the past year, Microsoft's share of the smartphone operating system market has nearly halved, falling to 5% in the second quarter from 9.3% a year ago, according to Gartner.

Android has since replaced Microsoft as the mobile operating system of choice for handset vendors that don't already have their own proprietary software. Motorola Inc.(MOT), for instance, has built its turnaround on its early embrace of Android. And while Samsung, LG and HTC have committed to making Windows Phone 7 devices, all of them have a much larger presence in Android.

Microsoft's own attempt to create a youth-oriented mobile device earlier this year fizzled.