Microsoft (Nasdaq: MSFT)  on Monday unveiled Windows Phone software for smartphone-tablet hybrids as well as more powerful chips as the company plays catchup to Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL)  in mobile devices.

A bigger start menu with higher-resolution displays will enable the software to run on phones with 5- and 6-inch screens for the first time, Microsoft said today in a blog post. The update to Windows Phone 8 will roll out to developers Tuesday and customers in the coming months.

The update also includes a “Driving Mode,” which is designed to help drivers avoid distractions while operating a vehicle.

“When we sat down to plan our latest official update to Windows Phone 8, we had three main engineering goals in mind,” Microsoft said in a blog:

  • Enable incredible new Windows Phone devices.
  • Enhance the platform with new capabilities for current users and partners.
  • Improve overall quality.
  • Support for bigger, higher-resolution screens

“So the new update paves the way for future Windows Phone devices with 5- and 6-inch touch screens. The larger, 1080p HD displays on these devices will make Windows Phone even more personal—for example by sporting jumbo-sized Start screens with room for six Live Tiles across instead of four.

“A bigger Start screen means the ability to pin even more of the people, info, and apps that matter to you. Built-in apps and Hubs like email, Photos, People, and Music and Videos will also be carefully scaled to take full advantage of the additional real estate on 6-inch screens.”

The software also is designed to run on more powerful device chips such as Qualcomm’s quad-core processor known as Snapdragon.

Then there is Driving mode. 

“A new feature called Driving Mode helps you get from point A to point B with fewer distractions,” Microsoft says. “Working with a connected Bluetooth device, Driving Mode is designed to limit notifications on the lock screen—including texts, calls, and quick status alerts—until you’re safely parked.”

Broader Appeal?

After losing out in smartphones and tablets to Google’s Android operating system and Apple’s iOS software, Microsoft is trying to appeal to consumers in the middle. Global shipments of so-called phablets will more than double to 60.4 million this year, research firm IHS predicted in January. That’s a fraction of the more than 1 billion smartphones researcher IDC expects to be shipped.

Nokia Oyj, which is selling its handset unit to Microsoft for $7.2 billion, released a promotion for its Oct. 22 Nokia World event, featuring an image of a phablet. Microsoft, based in Redmond, Washington, is acquiring the business in a bid to jumpstart its phone efforts while also trying to lure other manufacturers to its mobile operating system.

Windows Phone’s 3.7 percent share of the smartphone operating system market in the second quarter compares with 79 percent for Android and 13 percent for iOS, according to IDC. Windows Phone is faring better in Europe and Latin America than in the U.S., Greg Sullivan, a director in the division, said in an interview.

Seeking Partners

Terry Myerson, head of Microsoft’s operating systems unit, tried to reignite HTC Corp.’s interest in Windows Phone last month, said people familiar with the discussions. He offered to cut or eliminate the license fee to make the software attractive as a second option on handsets with Android, said the people.

Chief Executive Officer Steve Ballmer and other executives met with handset makers during a trip to Beijing to try to line up new partners and shore up current agreements, said a person with knowledge of their trip.