NEW YORK (Reuters) - Software giant Microsoft Corp., hoping to attract holiday season shoppers, on Tuesday will debut a wireless keyboard and mouse combination, including a device that could link computers to multiple electronic devices without using cables.

Analysts said the package could also provide a shot in the arm to Bluetooth, an emerging standard aimed at replacing cables with short-range wireless links.

"The Bluetooth market has been off to a very ragged start. Microsoft products will add fuel to the fire," Aberdeen Group analyst Peter Kastner said.

Microsoft to offer a $159 Bluetooth bundle including a keyboard, mouse and transponder device, that attaches to the back of a desktop or laptop computer to receive and send data.

The keyboard and mouse work only with computers using Microsoft's Windows XP operating system. But the transponder can link with other Bluetooth-enabled gadgets including printers, mobile phones and handheld computers.

Mike Foley, wireless architect at Microsoft, said this would become more important in coming months.

"We'll see many more classes of Bluetooth devices in the next couple of months and in the first quarter of next year," Foley said, predicting Bluetooth gadgets would be more prevalent in this year's shopping season versus last year.

The big difference between now and last year is that the industry has spent time clearing up technical issues that delayed adoption of Bluetooth," Foley said.

WAITING FOR BLUETOOTH

The industry has long-promised that Bluetooth would get rid of the tangle of cables associated with computers. But three years after Microsoft and other players set up a formal group to promote the standard, it has yet to hit the big time.

According to analyst group International Data Corp., this will take another few years.

About $76 million worth of communication chips based on the standard were sold last year, according to July estimates from IDC, which says this will swell to $495 million this year.

It expects Bluetooth chip sales to come to $2 billion in 2005 and $2.6 billion in 2006, a giant step back from its September 2001 forecast of a $2.5 billion market in 2004.

Microsoft's Foley conceded that his company's offering could take time to sell in volume since people who have computers already have keyboards and mice too.

But as more Bluetooth devices come on the market it will provide customers with more reasons to buy Bluetooth, he said.

Aberdeen's Kastner estimated that Microsoft would be disappointed if it did not sell at least 100,000 of the products during the holiday season.

IDC analyst Roger Kay said the price is high enough to allow Microsoft's competitors to viably introduce cheaper products.

"The idea of a big name backing the standard is going to up the interest," Kay said. "And the pricing is not too low so it allows others to come in and compete. This is a sign that Microsoft is trying to grow the category."