* Windows 7 phones to be in stores by Christmas
* New software comes a year later than expected
* Microsoft mobile market share fell to 9 pct in 2009
By Georgina Prodhan and Bill Rigby
BARCELONA/SEATTLE, Feb 15 (Reuters) - Microsoft (MSFT.O) launched a long-awaited revamp of its mobile phone software on Monday, aimed at reviving the flagging fortunes of the world's biggest software maker in the mobile world.
Microsoft, trying to claw back market share from Apple's (AAPL.O) iPhone and Research in Motion's RIM.TO BlackBerry, said Windows Phone 7 would cater for all aspects of the lives of businesspeople, including social networking, games and music.
Microsoft took just 8.8 percent share of the global smartphone operating system market last year, according to technology analysis firm Canalys, down from 13.9 percent the year before.
It trails Symbian, which runs on Nokia NOK1V.HE phones, RIM's BlackBerry and Apple's iPhone. It is even in danger of being caught by Google's (GOOG.O) new Android system, which already has 4.7 percent share of the market.
Microsoft's core customers have remained firmly rooted in the business world, while rivals have broadened their appeal to younger buyers as prices fell. Microsoft is also the only major phone software maker to charge a licence fee to handset makers.
Handset makers such as HTC (2498.TW), Samsung (005930.KS) and Motorola MOT.N all make Windows phones but are increasingly turning to Android, which is not only free but attracting a fast-growing developer community.
Speaking to Reuters Television, Chief Executive Steve Ballmer said Phone 7 was not aimed specifically at consumers but rather at business people who also had a life. [ID:nLDE61E197]
"We're really trying to go after the life market. People work, they live, and I think on their phone they don't make a big distinction, so we need to support all aspects of somebody's life," Ballmer said.
The update comes after a lukewarm reception for Windows Mobile 6.5 in October, which most analysts viewed as a poor competitor in the fast-developing market.
Aside from users of Windows operating systems, Microsoft's consumer business is modest. Its entertainment and devices unit posted a profit of $169 million last fiscal year, a fraction of the almost $11 billion profit from its Windows franchise. (Reporting by Georgina Prodhan and Bill Rigby; Editing by David Cowell)