Windows Phone 7 Update Is No iPhone Killer

Since it is bubble-bursting Wednesday here at Mobilized, let me assure you that the forthcoming update to Windows Phone 7 is neither “massive” nor an iPhone killer, despite some reports to the contrary.

On the other hand, the software update, which could come as early as January, will add two things that are very important for Microsoft. First and foremost, the update will pave the way for Windows Phone 7 devices that work on Sprint and Verizon’s networks. That’s important because Microsoft is already fighting an uphill battle and doesn’t need to lose potential customers just because its phones don’t work on their carrier of choice.

The second key feature is copy and paste. While not the biggest deal for many customers, it is an omission in Windows Phone 7 that early adopters and reporters have given Microsoft plenty of grief about. Adding this feature should end that and put another tick in the feature check box for those comparing Windows Phone 7 side by side with iPhone and Android. (Now it just needs full multitasking, visual voicemail and a couple of other things.)

Officially, Microsoft is saying only that the update is due “in early 2011” and will be the first of many regular updates to the operating system.

So how is Windows Phone 7 selling? It’s a little early to say definitively. There have been a couple of reports suggesting slow sales, but they are also based on very small data sets. For example, British phone retailer Mobilesplease says it is seeing Windows Phone 7 being outsold 15 to 1 by Android and 3 to 1 by Symbian-based devices. However, those numbers are based on sales data covering just a couple thousand phone sales.

Enthusiast site WMPoweruser tried to suss things out a bit by measuring how many Facebook activations there have been for Windows Phone 7 and came up with a figure of around 135,000. (Facebook support is built in to the operating system, but not all users choose to link their Facebook account to the phone). There’s also the fact that both T-Mobile and AT&T are offering “buy one, get one free” promotions on Windows Phone 7 devices. That could be a bad sign, but this is the holidays and carriers tend to like getting two users in a household and are willing to put some marketing money behind those efforts.

An AT&T spokesman, meanwhile, told Mobilized that the company has been pleased with Windows Phone 7 sales thus far, though neither he nor Microsoft would go into any specifics.

So what does all this mean? It’s hard to say. It’s clearly not a home run, with the phones selling so fast that stores can’t keep them in stock. At the same time, it is probably not the Kin-scale flop that some predicted either. (I know that doesn’t narrow things down too much. If anyone out there has more data, I’m all ears.)

Also of note, as of Wednesday there is one more Windows Phone 7 device to consider during these holidays, though you will have to go online or to one of a handful of Microsoft retail stores to find one. Dell is ready with its previously shown Venue Pro device. The rugged phone, which runs on T-Mobile’s network and features a vertical slide-out keyboard, will come in 8GB and 16GB versions.

The Venue Pro (seen above) is getting the most aggressive pricing of the early Windows Phones, starting at just $99 for the 8GB version when bought along with a new two-year contract. Those upgrading will have to pay $199, while it will sell for $449 without a contract at all. The 16GB version is priced $50 higher in all cases.