Microsoft's Build conference is kicking off in San Francisco this morning, and the day-one keynote started with a focus on improvements to Windows Phone. Microsoft will be launching version 8.1 of its mobile operating system later this month—"late April or early May," specifically—and it has a much-anticipated flagship feature: a digital assistant named "Cortana."

Rumors had been flying before the announcement that Microsoft was planning to include a Siri-style digital assistant with its next Windows Phone update and name it after the AI character in the Halo series of games, and the rumors in this case turned out to be true (if you're not familiar with Halo, you might not get the reference). Along with the new digital assistant, Windows Phone 8.1 brings a new "Action Center" for customizing notifications and phone settings, as well as lots of improvements to the lock screen—which is now fully API-driven and can be programmed by applications to do all kinds of neat things.

Microsoft VP Joe Belfiore spent the better part of an hour demonstrating Windows Phone 8.1's new features, but Cortana got the lion's share of the attention. The assistant is a healthy mix of Apple's Siri and Google's Google Now, incorporating natural language-based interactivity not just in the phone's menu system, but also stretching its API throughout the device's apps. Cortana is powered by Bing Search, and users can interact with the assistant through text or speech.

Cortana had a relatively glitch-free debut, with Belfiore walking through a number of different tasks like setting reminders, looking up contacts, and setting geofenced tasks ("remind me to do something when I get somewhere"). On stage, Belfiore had a bit of difficulty getting Cortana to convert temperature from Celsius to Kelvin, but he also reminded the audience that Cortana is currently considered a beta feature. The digital assistant will gradually shed the "beta" label as it's rolled out into markets other than North America.

Global Product Marketing Manager Nick Hedderman took over after Belfiore's Cortana demo to talk about the ways that Windows Phone 8.1 expands the operating system's business and enterprise support. One of the first features announced was VPN, a feature that has been conspicuously absent from Windows Phone 8. Additionally, S/MIME finally makes an appearance and will allow users to encrypt and cryptographically sign e-mails (this is particularly handy with Active Directory functioning as a certificate store, as it would in an enterprise with S/MIME deployed for Windows desktops).

Hedderman also showed off other key mobile device management functionality, including the ability to disable local saving of documents and the ability to enable and disable applications (including default Windows Phone applications).

The Windows Phone announcement ended with Belfiore returning to the stage and showing off a grab bag of extra features "designed to make users smile." The "smile" features include added smarts on what apps the Windows Phone store suggests to users and improvements to the weather and calendar apps. The calendar app got a particularly important shoutout: it was built using only public APIs rather than private ones. This "dogfooding" should result in a much-needed improvement in the scope and performance of the tools developers can use to make their apps.

Windows Phone 8.1 also includes some changes in how Wi-Fi networks are handled. The new "Wi-Fi Sense" feature can automatically join public hotspots with captive portals, clicking through any annoying terms of use and username/password prompts. It also includes a method of pre-sharing your own home Wi-Fi password with people on your contacts list. Additionally, Wi-Fi Sense syncs Wi-Fi passwords from your PC to connected phones.

Belfiore closed with one last feature: "shape writing." Android users who have used the Swype keyboard are going to be familiar with this: rather than tapping out individual letters, users can now slide fingers from letter to letter, spelling out words by dragging their fingertip between a word's letters. After showing the feature off on stage, Microsoft played a video showing the speed at which the new shape writing feature works, with a swipe-typer attempting to beat the Guinness world record for smartphone typing.

Consumers will get Windows Phone 8.1 "in the next few months." The final update schedule will be in the hands of the mobile operators, and brand new phones will ship with it in late April or early May. Belfiore also noted that developers might get access considerably earlier; we'll update this piece as soon as that information is announced.