Will Microsoft SURPRISE Early Critics With Its New Windows 8 Phone?

Microsoft (NASDAQ:MSFT) announced a much-changed new version of its mobile operating system, Windows Phone 8, on Wednesday in its latest effort to gain ground against Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) in the growing smartphone market. However, in a decision that will definitely be a setback for Nokia (NYSE:NOK), which rejected its own in-house Symbian software to partner Microsoft on its latest Lumia line of phones, WP8 will not be available on current Windows Phone devices.

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Among standout features, Windows Phone 8 has the same core software as the new Windows 8 operating system for personal computers and tablets, which will help developers create applications for all platforms at the same time. The new software also sports a high-definition screen and a dual-core processor from Qualcomm (NASDAQ:QCOM).

Microsoft (NASDAQ:MSFT) also made much of the software’s new start screen design that lets users customize the software’s Live Tiles, which automatically update with new information from programs and contacts. Live Tiles are “the heart and soul of our product,” Microsoft vice president Joe Belfiore said. The new screen will be part of the subset of features that users of older Windows Phone versions will receive.

Windows Phone 8 also has support for mobile payments using near-field communication technology. The software includes a digital wallet that can store coupons and frequent flier miles and pay for goods, a feature that’s reminiscent of Apple’s forthcoming Passbook app. Microsoft will partner with France Telecom SA’s (NYSE:FTE) Orange to launch the wallet feature and will add other carriers soon, the company said. The NFC feature will also help content sharing between phones, tablets, and laptops. Belfiore said that the phone will support encryption as well as Office apps.

Microsoft (NASDAQ:MSFT) is ditching its own Bing Maps to instead use the Nokia-owned Navteq mapping software that includes turn-by-turn navigation. It also announced that more than 100,000 apps had already been released for Windows Phone 7. There are an estimated 466,500 apps in the Android marketplace, while Apple’s App Store has over 500,000. Microsoft said Zynga’s (NASDAQ:ZNGA) gaming applications Words With Friends and Draw Something would be added before the end of the year.

The company said Nokia, Samsung, HTC, and Huawei will make devices compatible with the new software.

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