Microsoft says it has finished customizing Windows 7 to run on TV, set-top boxes and other gadgets. The software is part of Microsoft's goal of creating a digital hub for the home. Rival Google is also putting its software in TV's and other devices.
The touchscreen phone is expected to be available later this year for about $500 without a contract.
Video phones never caught on, but video chatting has become more and more popular over the years as more computers come with built-in webcams.
But picking the right service can be intimidating for some people looking for the easiest options. Skype is one option that takes just a few minutes to set up.
"I think that Skype works for people (who) use all sorts of different computers, like if you have a Mac at home, you have a PC at work," said Katie Boehret of the Wall Street Journal. "If you want the best video quality, in my experience Skype has been the best all around video quality and user experience".
You can find more of Katie's tips for video chatting on Wall Street Journal website.