Players of the video game Halo will be familiar with Cortana, an artificial intelligence character. Now it's arriving on Microsoft's Windows Phone smartphone as a virtual assistant to take on Apple's Siri and Google Now.

The move is one of a number unveiled by Microsoft at its annual Build conference in San Francisco on Wednesday as it seeks to gain traction in a highly competitive and lucrative market for smartphones. The most dramatic for handset makers - though not initially users - is that Microsoft will make both Windows Phone and Windows licences free for use on devices with screens smaller than 9in diagonally.

That has been seen as an acknowledgement that the huge success of Google's free Android mobile OS, which dominates worldwide smartphone sales, has made it impossible for Microsoft to charge for software on those devices.

Chatty assistant

Cortana tries to be chatty like Apple's Siri, while anticipating information you might want, like Google Now.

Cortana is among the new features coming to a Windows Phone update called 8.1. The updated operating system will come with new phones in about a month, including three that Nokia announced Wednesday. It will also be available as a free download for existing phones a few months later.

Microsoft is also updating its Windows 8.1 system for tablets, laptops and desktops. Although Microsoft has been pushing touchscreen controls, the new update is designed to make it easier for those with traditional keyboard and mouse controls. The update, simply called Windows 8.1 Update, is available starting next Tuesday.

The announcements come as Microsoft Corp. opened its annual Build conference in San Francisco. The conference is aimed at developers who write software for Microsoft systems, though it's also a chance for the company to showcase its products more broadly and to build interest among the digitally connected.

Small scale, big ambition

Most of the new features relate to Windows Phone, a system that hadn't received as much attention as the main Windows system in recent years. But it's an area where Microsoft sees growth opportunities and underscores its commitment to mobile devices and services under new chief executive Satya Nadella.

Windows Phone had less than 5% of the smartphone market last year, according to Gartner. But unlike traditional PCs, people tend to upgrade phones more frequently - on average, every two years, or even more frequently in China. Many people in emerging markets are also getting smartphones for the first time, with India forecast to have the world's second-largest user base of smartphone users by the end of 2014, ahead of the US.

Though Windows Phone already had some voice-controlled elements - including the ability to dictate text - with the Cortana assistant, Microsoft catches up to Siri and Google Now in many ways. You can use voice commands to search for information, set alarms and make calendar entries, for instance. Although Android devices have had Google Now since 2012, and iPhones and iPads come with Siri and can get a free Google Now app, Windows phones haven't had as robust a voice assistant until now.

Cortana tries to go further than both by warning you of conflicts when you add items to your calendar. It will also remind you to ask about the new dog your sister just got the next time you communicate with her, whether that's by phone, chat or email.

Cortana also promises to give you more ways to customise it. While Google Now will alert you to upcoming travel by scanning your email, Cortana will ask whether it should offer you such alerts. That might reduce unwanted alerts, though it will require more work to set up.

"Cortana is truly a differentiator. Voice recognition isn't only about activating commands but about becoming a truly personal assistant," commented Francisco Jeronimo of the researchers IDC.

Microsoft said the feature is in a "beta" test mode as the company tries to improve its voice recognition capabilities. In fact, during Wednesday's presentation, Cortana made numerous mistakes, including offering weather in Celsius when the request was for the Kelvin temperature scale.

Microsoft plans to remove the beta designation in the second half of the year, when it will formally launch in the US, Britain and China.

The company also announced a new Action Center for the Windows Phone system as a hub for app notifications and information such as remaining battery life. Other new phone features include automatic connecting to free Wi-Fi hotspots to save on cellular data.

Microsoft provided more details about how the company is making the Windows Phone system more useful in business settings. Companies will be able to restrict apps that can run on phones issued to employees or prevent sensitive documents from being saved locally.

To bridge the divide between the phone system and Windows 8.1 for larger devices, Microsoft unveiled tools to let software developers adapt apps for the various devices more easily. App developers will also be able to sell apps once across the board; currently, customers must get apps for phones and for other devices separately.

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