The company will license Nokia's Series 60 platform, which runs over the Symbian operating system.
Sendo had planned to launch its Z100 Multimedia Smartphone, based on Microsoft's Windows Powered Smartphone 2002 software, within the next few weeks.
The company said legal restrictions prevented it detailing the reasons for terminating the agreement with Microsoft.
"If we had had any other course of action available to us, we wouldn't have taken the decision to drop the Z100 Smartphone," a Sendo representative said.
Eden Zoller, wireless Internet director at analyst group Ovum, said, "Sendo's dramatic defection to the Nokia Series 60/Symbian platform is a cruel blow for Microsoft, which had hoped to gain ground in the mobile market by being the platform of choice for operator-specified smartphones."
She speculated that Microsoft's licensing conditions could not accommodate the depth of customisation required by operators.
"If Sendo could not provide devices that met increasingly demanding operator specifications, then it would be left to differentiate against more powerful competitors on price alone," said Zoller.
"Microsoft is now ultimately relying on its Asian device partners to help it prove that it has something of value to give to operators," she added.