MICROSOFT HAS pulled the plug on a new generation of smartphones less than three months after unveiling the devices that were part of its efforts to catch up with Apple and Google in the fast-growing mobile market.

Microsoft said this week it had cancelled plans to sell its “Kin” phones in Europe this autumn. The internal team working on the Kin phones will now be combined with the group working on Microsoft’s forthcoming Windows Phone 7 software.

“We will continue to work with Verizon in the US to sell current Kin phones,” Microsoft said.

The move underscores the challenges facing Microsoft, whose software is used on the vast majority of the world’s PCs, as it strives to adapt to consumers’ growing taste for hand-held internet-connected gadgets like smartphones.

In April, Microsoft said it was shelving an internal project to develop a tablet PC similar to Apple’s iPad and last month, it reorganised its mobile phone and video game division. It was announced that long-time Microsoft executive Robbie Bach would retire and that the senior vice presidents in charge of phones and games would report directly to chief executive Steve Ballmer.

Ballmer is “looking at the [mobile] business, seeing what’s making money, what makes sense to do going forward,” said Matt Rosoff, an analyst with Directions on Microsoft.

The Kin phones represented the software giant’s first foray into designing its own phones. The two Kin models featured built-in internet social networking functionality as well as Microsoft’s Zune digital music player.

Microsoft began selling the Kin phones with Verizon wireless, the largest US wireless operator in May.

However, Rosoff said the phones lacked certain key smartphone functions, such as the ability to install software applications, yet had wireless data service plans that were priced comparably to more full-featured devices like Apple’s iPhone.