Microsoft to Add Multitasking, Internet Explorer 9 to Windows Phone Later this Year

Microsoft announced on Monday plans to fill in some of the key gaps from the initial Windows Phone 7 release with two updates due out this year.

The more interesting of the updates is the second one–a major release–due later this year. In a Mobile World Congress keynote, Microsoft CEO Steve Ballmer plans to demo only a couple of features of the release, including improved multitasking, simultaneous game play with an Xbox as well as the addition of the company’s Internet Explorer 9 browser.

An earlier update, now due out by March, brings the long-awaited copy-and-paste features to the operating system as well as some performance tweaks and support for CDMA networks.

Windows Phone unit President Andy Lees told Mobilized that the new release later this year should answer critics who worried that Microsoft wouldn’t be able to innovate fast enough to catch up or leapfrog over features available on rivals such as iPhone and Android.

“Part of what we are doing is sharing technology across the company,” Lees said in an interview. In other examples, Microsoft is showing a demo of how a user on the phone might play a game throwing balls at someone playing with an Xbox or Kinect. Microsoft also plans to allow sharing of Office documents directly between phones, Windows PCs and the cloud-based Windows Live service.

Moving the full IE9 browser over to the phone will allow for hardware acceleration and other features that had not been possible on phones in the past, Lees said. For battery and other reasons, Lees said that the new release won’t support Adobe’s Flash, but Lees said it is not a religious issue for him, and that the company may add such support down the road.

“We’re not allergic to Flash,” Lees said. “It’s not in this update, but we’re not making some particular statement that it will never be there.”

Microsoft also plans to announce that it will integrate Twitter into the People hub in much the same way that the initial release brings in Facebook updates.

The update later this year will be the one adopted by Nokia in its first Windows Phone, Lees said. Nokia announced last week, of course, that it plans to make Windows Phone its primary smartphone operating system going forward.

As for early reaction to the Nokia move, Lees said the response has been positive, both from mobile operators as well as from phone makers, even those that now find themselves with a new competitor.

Lees said that basically all of the companies that make Windows Phone devices also make phones for Android and have plenty of competition there as well. Lees said that, if anything, Nokia’s move could spur some device makers that were on the fence about supporting Windows Phone 7.

“We have had other [phone makers] approach us who were talking to us and have now increased their, should I say, level of focus,” Lees said.

As for Nokia CEO Stephen Elop’s comments that the amount of money flowing to Nokia from Microsoft is measured in billions rather than in millions, Lees said that one must consider that the deal includes partnerships around search and services as well as the amount of marketing and other support being directly provided by Microsoft.

“We’re not talking about specifics,” Lees said. “But it’s a sizeable opportunity.”

Update: 4:00 pm Barcelona time: I finally made it in after being stuck in a massive crowd (see image). Ballmer’s keynote is slated to begin shortly and I’ll add live updates shortly.

4:06 pm: Ballmer has taken the stage, talking about rapid pace of change in industry and for Microsoft.

Talks about first update, the copy and paste one, which will come in first two weeks of March.

4:09 pm: Ballmer said most of smartphone competition the same–a “sea of icons” that lead to applications that lead to actions. Windows Phone is easier and simpler, he said. “With Windows Phone it’s easier to see information at a glance,” Ballmer said.

4:12 pm: On to new stuff, in the “near future in 2011, we will bring multitasking to Windows Phones” Ballmer said.

Ballmer is talking IE9. “We need to give people the full Web on their phone, like we do on the PC,” Ballmer said. (Wouldn’t that also include Flash, Mobilized wonders?)

4:15 pm: Apps are great, Ballmer said, but not enough. “It’s often too hard to find what you want when you want it,” he said. That, he said, is why Windows Phone also has task-specific hubs like People, Pictures, Office, Music and Video.

4:16 pm: Interesting note, Ballmer has again touted 93 percent customer satisfaction number, but no new sales figure.

4:19 pm: Windows Phone exec Joe Belfiore comes onstage to demo the new features coming to Windows Phone later this year.

4:26 pm: Both updates will be available for all Windows Phone 7 owners, Belfiore said.

4:30 pm: Belfiore showing an IE9 demo highlighting its hardware acceleration feature. In the demo, Belfiore shows IE9 for Windows Phone allowing 50 fish to rapidly swim around in an aquarium demo. He then shows the same demo on an iPhone 4 with the fish barely swimming.

4:32 pm: A few demoes fail. Streaming video doesn’t work because of connection issues. “This is preliminary not final code,” Belfiore said. “We’ll get all these kinks worked out.”

On to multitasking…

4:36 pm: Press-and-hold back button lets users access the new multitasking and see tiles for recently run apps.

Also shows Slacker playing with other tasks. Until now, only Microsoft’s own Zune could play in the background, not third-party apps.

4:39 pm: Last demo is the Xbox one showing Kinect game being played with the phone. Shows a “tech preview” of Windows Phone being used as a companion in Kinect’s dodgeball/breakout game.

4:42 pm: Ballmer back and talking about the ecosystems and Microsoft’s interaction with device makers and mobile operators as well as growth in the number of mobile apps for Windows Phone 7.

“We’re off to a strong start,” he said. “We know we’ve got a lot of work to do.”

Ballmer said the company knows it needs both scale and variety.

4:44 pm: Now he’s talking Microsoft-Nokia deal.

4:47 pm: Ballmer invites out Nokia CEO Stephen Elop,

Elop calls the deal “a natural partnership,” in which Nokia will bring the global reach and scale that Microsoft needs, while giving Nokia a needed in back to the North American market, where it has struggled badly.

Elop repeats now well-worn point that Microsoft-Nokia will offer mobile operators a third viable choice to iPhone and Android.

4:51 pm: Ballmer makes the same point Lees made in our interview, arguing that the Nokia deal will even help other Windows Phone device makers by giving the ecosystem a needed level of scale.

“Today, customers are falling in love with Windows phones,” Ballmer said, adding that the company is investing to further popularize the phone, including new features.