When the iPhone launched, Microsoft CEO Steve Ballmer made a bold prediction: “There’s no chance that the iPhone is going to get any significant market share. No chance.” It took six months for Apple’s phone to surpass Windows Mobile’s market share. Ever since, Microsoft had seemed paralyzed by its rivals’ success. About a year ago, a fellow tech writer and I were discussing Microsoft’s prospects in the mobile phone business. I remember the conversation because it involved a debate over the precise definition of the phrase “death spiral.” At the time, Microsoft had just released Windows Mobile 6.5, which was a sorry attempt to touch up Windows Mobile 6.1, which was itself a quick fix to a mobile operating system whose overall interface and functionality seemed stuck in 2004. If this wasn’t a death spiral, what was?

Mercifully, the spiral is finally over. Last month Microsoft launched Windows Phone 7, a reimagined and redesigned mobile operating system that I’ve found surprisingly modern and pleasant to deal with. The new OS is available on five different phones on two carriers, AT&T and T-Mobile. I’ve been testing two of them: The HTC HD7, which is available for $199.99 with a two-year contract on T-Mobile, and the Samsung Focus, which is $199.99 with a two-year contract on AT&T. Both phones are speedy, have spare but quite intuitive user interfaces, and perform most of the basic functions you’d want in a smartphone: Web browsing, e-mail, calendar, music and movies, and old-fashioned phoning. And while there are several small ways in which Windows Phone 7 falls short of the iPhone and Android, the new OS shows that Microsoft is finally fighting to be a contender in the mobile market.

Does Windows Phone have a chance? I won’t predict domination, but I do think that Microsoft has carved a nice niche for itself between Apple and Google. Windows Phone 7 distinguishes itself from the iPhone in working on many different kinds of hardware: You can get it with a physical keyboard or a touchscreen, a 3.5-inch screen or 4.3-inch screen, a device with great speakers or one that’s super-thin. Android, of course, offers exactly this kind of diversity, but Microsoft has been careful to avoid some of the mistakes that Google made in pushing its OS out to many different phones. In particular, Microsoft has kept Windows 7’s interface and functionality consistent across different phones, and it’s imposed strict guidelines on phone manufacturers and carriers that prevent them from glutting the devices with “improvements.” The Samsung Windows Phone that I tested was nearly identical to the HTC model, and that will be a key selling point in the marketplace. While an Android phone from Motorola is a completely different beast from a Samsung Android, a Windows Phone will be a Windows Phone wherever you get it.

This is important, I think, because the main thing phone buyers should evaluate is the device’s interface—how easy, fast, obvious, and pleasurable is it to get your phone to do what you want? On this score, Microsoft has done a fine job. When you turn on a Windows Phone, you’ll see a home screen filled with a series of two-dimensional, brightly colored tiles. It looks like no other phone on the market today—it’s spare and unflashy, but somehow sleek. The tiles serve both as buttons and status icons; the Mail tile, for instance, shows you a big count of how many messages you have, and the Calendar tile shows your next appointment. Click on each of these, and you’ll go to the associated app. The phone’s main apps are similarly austere—Calendar and Mail are dominated by big, white, sans-serif text headings, and few graphics or other icons—but each one works just as it should, quickly and with little frustration. My favorite thing about Windows Phone is its on-screen keyboard: I found it more accurate than that of the iPhone and Android, and its auto-correct suggestions were often on the mark. If you’ve never been able to get the hang of other phones’ on-screen keyboards, give Windows a chance.

To be sure, Windows’ rivals have also created fine mobile interfaces. Apple, typically, did a great job in the first version of the iPhone and has added small, important improvements over the years that have made its phone even better. Apple’s closed-shop approach was part of its success—because it manages every part of the phone, Apple can make sure that everything works as it should. Google’s effort, too, was typically Google-y. Everything about Android is open and free. This gives people lots of choices—you can get Android phones for as little as $50, and they come in dozens of different shapes and sizes. But the wide range can’t be good for Android in the long run, because some of those phones are really bad—I’ve tested Android phones that are grindingly slow, whose keyboards barely work, and that ship with a version of the OS that’s older than dirt.

Microsoft’s split-the-difference approach seeks to avoid some of Android’s problems. For one thing, Microsoft imposed a set of minimum specifications for manufacturers building Windows Phones—they can’t use a slow processor, for instance, and must include a 5 megapixel camera. More importantly, the company has prohibited third-party interface “skins” on its device. Manufacturers aren’t allowed to change the keyboard or the shape of home-screen tiles in order to differentiate themselves. Not only will these restrictions improve Windows Phone’s usability, they may also help attract third-party developers. Netflix, for one, offers an app for Windows Phone and for the iPhone, but not for Android. Why? Windows and the iPhone offer a common security platform across their devices, meaning that Netflix can develop a single app for all models. Because Android is implemented in so many different ways, however, Netflix has been forced to create specific versions for each phone, which has slowed down its Android development.

The most important test of Windows Phone’s consistency will come when Microsoft begins to upgrade its OS. Will some phones get new versions before others? Will Samsung phones get access to new features before, say, HTC phones? So far, Microsoft has pledged to keep its entire range consistent. I hope it does—but carriers and phone manufacturers might not play along.

Windows Phone isn’t perfect. In particular, it can’t do copy and paste, and third-party apps can’t multitask. Of course, this was once true of the iPhone, too. But Windows Phone is competing against rivals that now offer these features, so the omissions aren’t really excusable. I hope that Microsoft addresses them soon. It has a great platform on its hands, finally, and I can’t wait to see it get a lot better.

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