Microsoft unveiled its Windows Phone 8.1 update, including the Cortana digital assistant, and announced that it would allow device makers to use the OS free of charge.

In his keynote presentation at the Build developer conference, Joe Belfiore, head of Windows Phone, said the aim was for the new version to provide a more personal experience than its predecessor.

The most eye-catching addition is Cortana, which provides a range of services for users in a similar way to Apple’s Siri. It uses natural language processing to respond to voice commands and questions, and also supports text input.

Cortana is also able to learn about places, people and activities that are important to users and curate and proactively provide information that is likely to be useful. In addition, it accesses online information via Microsoft’s Bing search engine.

The technology also interacts with third party apps, with Belfiore demonstrating its integration with Facebook and Microsoft-owned Skype.

The Cortana technology will initially be launched as a beta in the US before rolling out to the US, UK and China in the second half of 2014, with more markets to follow in 2015.

New personalisation options for Windows Phone 8.1 include lock-screen themes and the ability for the live tiles on the interface to show images, rather than just solid colours as previously. For devices with a screen of 5 inches or greater, there is now the ability to add a third column of tiles.

“All of this is about making Windows Phone more personal,” Belfiore told the Build audience.

A new Action Center provides a customisable section for settings and notifications, while the Word Flow Keyboard allows users to input text by moving their fingers across the screen in a similar way to the Swype technology used by other devices.

‘Sense’ functions for data, Wi-Fi and storage allow users to optimise their use of these services.

The Windows Phone 8.1 update will start rolling out to existing devices using Windows Phone 8 in the next few months, while it will be offered on the new Nokia Lumia 630, 635, and 930, also unveiled yesterday.

In a clear effort to further drive uptake of Windows Phone, Microsoft said it would allow hardware partners to use Windows Phone on their devices free of charge.

Device makers will also be able to provide Microsoft services and a one year subscription to Office 365 to customers for free.

The move will encourage device makers to make use of Windows Phone due to the lower financial risk of doing so, and should also allow them to pass cost savings on to consumers.

Two more OEM partners were announced in the shape of Prestigio in Europe and Micromax in India. This follows the announcement of nine new device partners at Mobile World Congress.

Windows Phone is yet to make a significant dent in the market shares of Android and iOS and held only 3.2 per cent of the global smartphone market at the end of 2013, according to Gartner.