Microsoft Corp has taken an equity investment in privately held computer-telephony company Navitel Communications Inc of Menlo Park, California, and signed an agreement under which Navitel will design and build systems and applications for the Windows CE operating system. Navitel launched its Windows CE-based TouchPhone screen telephone earlier this year, combining CE with Microsoft’s Pocket Internet Explorer web browser along with electronic mail, voice mail, personal information management software and smart telephone technology. Navitel will now scrap its hardware development program so it can concentrate on the integration of its software with Windows CE. It was working with Philips Semiconductor Inc on the hardware, which was supplying its TwoChipPIC chip set for processing and peripheral functions. Navitel is now looking for buyers to take on its hardware assets, and expects the eventual buyer to carry on the relationship with Philips, which was only signed in January. Microsoft’s director of business development and investments, Greg Stanger will be represented on the Navitel board. The one year-old company professes itself quite delighted at the prospect of working closely with Microsoft.