Microsoft will not launch a product that competes directly with Apple's iPhone, Chairman Bill Gates said in an interview with Germany's Frankfurter Allgemeine Zeitung.

"No, we won't do that. In the so-called smart phone business we will concentrate solely on software with our Windows Mobile program," Gates was quoted as saying in the interview published on Wednesday.

"We have partnerships with a lot of device manufacturers from Samsung to Motorola and this variety brings us significantly more than if we would make our own mobile phone," he added.

Apple's iPhone, which also plays music and lets users browse the internet, has been a big hit.

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