Hewlett-Packard (HP) is reportedly preparing to launch a smartphone that will mark its first foray into the consumer handset market, says the Wall Street Journal. According to sources, the phone will be based on Microsoft’s Windows Mobile 6.1 operating system and will be the latest device in its iPaq range. However, unlike most previous business-focused iPaq devices – which HP has been selling since it acquired the brand from Compaq in 2002 – the device will be sold via retail outlets in collaboration with mobile operators. The new phone will reportedly launch in Europe within the next two months followed by a later worldwide rollout. “The iPaq brand is extremely strong around the world, especially in the European market,” said HP spokesman Mike Hockey.

However, the report notes that HP is currently only a niche player in the smartphone market, citing IDC figures that give HP a 3.3 percent global market share in terms of sales. According to a recent Gartner study, Nokia dominates the smartphone market with a 47.5 percent market share as of Q2 2008. BlackBerry-maker Research In Motion was second with a 17.4 percent share, followed by HTC with 4.1 percent.