Stuart Parmenter, director of Mobile Engineering at Mozilla Corporation, said the move was due to Microsoft closing the door to native applications on smartphones running its new Windows Phone 7 Series software.
Mozilla was gearing up to develop a version of Firefox for Windows Mobile, and the development work Mozilla has done on Windows CE 6 has left it "well positioned to have an awesome browser on Windows Phone 7", Parmenter said in a blog.
But the absence of a software development kit for native applications has made it impossible for Mozilla to move forward, he said.
Microsoft will only support development of applications running in the Silverlight runtime environment, or of games in the XNA Game Studio runtime environment, it announced last week at its Mix conference.
It will not allow third party app developers direct access to the phone's hardware, where they might be better able to exploit its potential.
Still, Parmenter hopes that Microsoft provide Mozilla with a way to build Firefox for Windows Phone 7 Series.
Mozilla thinks Windows Phone 7 looks interesting and has the potential to do well in the market, according to Parmenter.
For now, Mozilla will concentrate an upcoming version of Firefox for Android-based phones, and on the existing version of the browser for Maemo, the operating system used in Nokia's flagship N900 phone, Parmenter said.
Mozilla released that browser on January 29.
Firefox for Android is still only a pre-alpha version, which means it is still in the early stages of development, according to Mozilla.
Mozilla still has "a way to go before any kind of usable alpha release, but we're certainly one step closer", Mozilla's Vladimir Vuki?evi? said in a blog.