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Microsoft has a lot riding on Windows Phone 7. Previous versions of Windows Mobile were, shall we say, less than wonderful, and the company is about out of second chances.

Guess what - Windows Phone 7 may just pull their fat out of the fire.

Perfect it's not, but after several weeks of working with the operating system, I'm impressed.

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A lot of it has to do with Microsoft's belated decision to enforce hardware specs that do the OS justice. If you buy a WP7 device, you know you will get a respectable phone with at least 8 GB of memory, 5 megapixel camera, and all of the niceties like accelerometer, GPS, Wi-Fi, Bluetooth and a very nice touchscreen. Each phone is required to have three buttons: Back, Start, and Search, always in the same order at the bottom of the screen.

You also get pre-certified apps, another improvement. Microsoft realized that a dud app that degrades performance makes the phone look bad, so it now checks out the software that's meant to run on the device. While it says it's not as restrictive as Apple, it is trying to strike a happy medium between allowing developers carte blanche and nailing them down too tightly.

You've likely seen pictures of the home screen with its "Metro" user interface's live tiles, and ever-updating content (counts of new e-mails or messages, indications of game alerts, notifications of new Facebook content and so forth). Manufacturers are allowed to add some of their own apps to the home screen, but are not allowed to remove any of the base set. This gives you a predictable user interface that's easy to navigate. The OS supports gestures like pinch and swipe, and the two touchscreens I've tried were both extremely responsive.

When you fire up your WP7, it wants you to sign into Windows Live. That's your ticket to the online hubs that are an integral part of the WP7 experience. If you also log into Facebook, the phone will inhale your friends and add them to your contacts. Ditto your Hotmail or Live mail contacts (it does ask first). If you choose to connect with your corporate Exchange server, those contacts will be available, and if you add any other e-mail account, if its contacts are stored on the server, they get added too. The phone supports virtually every kind of account too: Gmail, Yahoo mail, POP3, IMAP … the demo unit (an LG Optimus 7 from Telus) even came with Bell, Telus and Rogers configurations preinstalled. If you deal with the same people over several networks (say, e-mail, IM and Facebook), you can link their records to present one unified view of the individual and see their updates virtually as they happen.

Finding someone in those potentially formidable collections of contacts could be a challenge, but rather than endlessly scrolling the list, you can either use the Search button, which will let you look within the current app, or you can pin a tile containing the person's contact record to the home screen. There's a "Me" tile on the home screen already, where you enter your own updates, post comments on your Facebook wall, and generally keep the world abreast of your status.

You can actually pin virtually anything you want to the home screen - a favourite photo, a music playlist, an app, you name it. Just hold your finger on the item to get the context menu (It's the equivalent of a Windows right-click, in effect) and pin away. And once you've pinned, you can rearrange the tiles to suit yourself - just touch and hold to release the tile from its current location, drag it to where you want it, and tap to lock it down.

The e-mail client is basic, but functional. You get three views: All, Urgent and Unread messages, accessible by swiping horizontally.

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It does lack some options that owners of devices like BlackBerry take for granted, however. Three of them were most important (to me): when the phone sychs with your server mailbox, it deletes messages you've deleted on the phone (and you have no choice in the matter); you are unable to only download message headers at synch and decide later whether you want the entire message on the phone; and you can't filter mail to prevent certain messages from downloading.

The phone has enough memory that the first concern is likely no big deal for most, once you know what's going to happen (you won't need to free up space just on the phone that often), but the second and third can get very expensive, especially if you're roaming. On my BlackBerry, a three or four day trip to the US only costs me a couple of dollars in data roaming because I only download headers and I filter mail to the device to prevent several high-volume mailing lists from downloading. A similar trip with WP7 reported a data bill of over $50. To be fair, iPhone users face the same issue.

To mitigate this, the phone automatically turns off data when you're roaming, but if you want your e-mail, you'll either need to bite the roaming charge bullet or wait until you can connect to a Wi-Fi network to collect e-mail. Naturally, the same caveat applies to surfing, social networking and downloading.

The soft keyboard, which pops up when you need to enter text, is quite responsive. As you type, the software predicts what's coming next and offers suggestions; all you need to do is touch the suggestion to insert the word into your message. And if you've got a typo in need of fixing, touching the screen for several seconds will generate a cursor that you can drag to the right spot to correct the error. This is not something most people will figure out on their own (Microsoft told me about it) - I hope there's a tutorial somewhere!

As one would expect, the browser is mobile version of IE, complete with tab support, and it works well, although anything that doesn't render well in the desktop version will be just as bad here. It does offer a setting that will look for mobile versions of sites when they exist.

There's plenty available for the casual gamer as well as for serious players. I've been amusing myself while commuting with freebies like Word Chief and Sudoku, and a lot of other casual games are showing up either free or for a buck or two, including, soon, a port of the official Rubik's Cube app. And if you have an Xbox Live ID, you can log in to it from the phone and see when you have messages from the service, pending turns or invitations, and even your gamer avatar, on the Games tile.

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You can grab photos with the five megapixel camera even when the phone is locked by simply holding down the shutter button on the side of the phone. The Pictures tile gives quick access to both photos from the camera and any you've imported via Zune (also your music and video source in WP7). You can upload them to Microsoft SkyDrive or share them with friends with a tap or two. Quality is adequate, once you get the hang of the device (my first shots were a bit blurry), and you can switch from still to video with a tap. Camera controls aren't fancy - just a zoom, a flash control and a video/still toggle.

One useful piece that may be an acquired taste for consumers is the Microsoft Office Mobile apps. The phone offers Word, Excel, PowerPoint and OneNote mobile editions that can open and operate on standard Office files. I used OneNote for my review notes, and was able to e-mail them to myself for reference once they were done. Obviously, a large, nasty spreadsheet will be difficult to navigate on a phone screen (however, I was astonished at how readable a particularly brutal one was - it took a lot of scrolling to get around, but the data was easy to look at), but for quick peeks and simple editing, the apps work fine, and Word, Excel and PowerPoint interface with the Office online hub, or your corporate SharePoint portal or SharePoint Workspace (formerly Groove).

Music? Oh, yes. WP7 uses Microsoft Zune to synch the music, videos and photos you have on your PC, and to purchase new content (so far, only video in Canada; check the Zune site for updates on when you can purchase tunes). There's radio too, although it informed me that I needed a wired headset, since the radio uses the headset wires as an antenna. I guess that rules out listening to radio via Bluetooth.

Oh, yes - WP7 also makes phone calls. Again, the UI is simple and the OS recognizes phone numbers in e-mails and other documents so all you need to do is touch one to get the option to dial it (and to add it to your contacts). You get the expected call history, a link to voicemail (assuming your carrier offers it), a link to your directory, and not much else.

Holding down the Start button launches voice commands. You can tell the phone to call a contact or a phone number, to search for something on the Internet, or to launch an app. It works nicely, too.

I could go on forever, talking about the GPS, Bing maps and other goodies, but will conclude with a few general UI comments.

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Apps - there are likely to be close to 2000 by the time you read this, all vetted by Microsoft so you'll know they won't break the phone. They run the gamut from games to frivolous stuff like a flashlight to productivity apps to the entire text of various holy books; explore the Marketplace for current offerings and pricing. There are lots of freebies, including Where's Timmy, which uses the GPS to help find the nearest Tim Horton's, a Yellow Pages Canada app and the Globe and Mail's official app. Toronto's Polar Mobile alone is currently porting 350 existing smart phone apps to WP7, and will be building more.

In the "because we can" department - several apps, including the official Twitter app, will not install unless you allow them access to location data. Sometimes it makes sense (Where's Timmy does need to know where you are to direct you to the nearest caffeination station), and sometimes it doesn't. It's a major privacy issue, only mitigated because you can turn off location services (a good idea, actually, because the GPS radio slurps battery power).

Copy and paste does not exist in this version of the OS, a major pain that I'm told will be remedied in an update early next year. I got around it in one case by cutting and pasting info into my Windows Live calendar online and letting it synch, but that won't work in every situation. Multitasking is limited to Microsoft apps (one would assume that will be opened to third parties at some point).

Tethering - sorry. Though that will ultimately be a carrier choice as much as an OS option, it's technically impossible in version one.

Battery life - I have a pre-production phone, so my results aren't necessarily definitive, but I got two days' use on a charge if I turned off Wi-Fi and the GPS. Radios eat battery power like crazy. With the GPS enabled, the phone made it through a day, which was Microsoft's minimum goal.

Bottom line - much as I disliked previous versions of Windows Mobile, I'm forced to admit that this time Microsoft has gotten it right. WP7 is stable, usable, and has the baked-in social networking that today's users demand. While there are some annoyances, such as the absence of copy and paste and no support for removable media, indications are that an update in the not-too-distant future will bring things up to snuff. Customers just need to make sure they buy an adequate data plan, or they will have a very expensive surprise when the bill comes in.

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What will WP7 devices cost?

All three carriers have their sales pages for the phone up now. Rogers pricing for the Samsung Focus: $199.99 with 3 year plan. No plan, $599.99.

Bell's pricing for the LG Optimus Quantum is $99.95 with 3 year plan, and $449.95 with no plan.

Telus, LG Optimus 7 $99.99 with 3 year term, $499.99 with no contract; HTC Surround $99.00 with 3 year contract, $449.99 with no contract.

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