Research group iSupply reports that Apple's popular iPhone has sold more handsets than any other smartphone this July. The group also expects the device to come out on top of the feature phone category when the year ends.

The iPhone beat Research in Motion's popular Blackberry models and dominated models from rivals Nokia and Motorola in the smartphone category which encompasses models that have computer-like features.

Under the feature phone category where units with recreational extras such as cameras and mp3 players are classified, the iPhone equaled the sales of market leader Chocolate, manufactured by Korean consumer electronics giant LG.

The iPhone is considered by iSupply as a crossover between the two major mobile phone types due to the diversity of the features included in it.

The firm projects around 4.5 million units of iPhone sold by year's end and suggests that 20 million units could be in North American homes in four years.

Telecom giant AT&T saw a quarter of all iPhone users jump to its fold by virtue of its exclusive deal with Apple. Worldwide sales are expected to pick up even more when the iPhone hits Europe in the last quarter of the year.

A lot of talk on the net has focused on the iPhone's lack of support for the Microsoft Exchange Server, Research in Motion's Blackberry servers, and Motorola's Good Technology e-mail servers.

While there still has been no word regarding support for the Blackberry and Good Technology servers, ZDNet was able to get some information from a "reliable source" that the iPhone will be supporting the Microsoft Exchange Server.

Apple's promised big announcement this week is allegedly the confirmation that it has licensed the Exchange ActiveSync licensing protocol. If this holds true, we're going to be able to use Activesync to connect to Exchange Server and use its wireless messaging and synchronization capabilities.

Apple and Microsoft were asked about the said agreement and while the former has yet to respond, the latter gave a very cryptic answer, "we canÂ?t comment on (these) rumors. In general, Microsoft is always in discussions with other companies about licensing its intellectual property."

This shouldn't surprise a lot of people considering that a number of mobile phone developers such as Nokia, Palm, Motorola, and Sony Ericsson have already licensed the technology. Microsoft analyst Matt Rosoff spoke about this deal and downplayed it a bit, though he did hint that it is a step forward in the adaptation of Microsoft IPs.

Apple and Microsoft would sign a deal to incorporate ActiveSync into the iPhone, just as Nokia, Motorola, and PalmOne are doing.

So this wouldnÂ?t be anything new from MicrosoftÂ?s perspective, just a deal with a new telephone handset makerÂ?Apple. ItÂ?s in MicrosoftÂ?s interest for Exchange to be supported as widely as possible, even on what will probably be a consumer-oriented product.

If the incorporation of Activesync support on the iPhone is true, it should make the transition for those already using Activesync for their mobile phones easier. Could this be another selling point for the phone? We'll have to wait and see how the market reacts before we can really give anything definitive. We'll be keeping an eye out for more updates on this as it develops.