It's no secret that Windows Mobile is in a rather dark place right now. Once quite popular and (after installing a number of third party tools) relatively usable in its day (i.e., the days of the stylus), it was quickly superseded by the iPhone OS, and things like Android and webOS are ahead of Windows Mobile as well - if not in market share, then in user experience.
For a while now, people have been wondering why Microsoft doesn't just tack phone capabilities onto its Zune operating system and interface; especially the Zune HD and its software have been very well received in the press. The rumour du jour, too, states that we're going to see a 'Zune phone'. The details are... Interesting.
Different websites independently published the exact same rumour, but whether that confirms or denies the story is impossible to tell. Let's get the most intriguing items on the list out of the way first, so we can leave the others for you to read on your own.
Obviously, the big shocker is no multitasking. The rumours states that applications can "pause" instead, but what exactly that entails it doesn't say. To me, that sounds like quiting the applications but saving their state, so that when you relaunch them, you can continue where you left off. For example, if you were busy editing a Word document, then Pocket Word (or does it have a new name?) would save the state when it quits. If you re-open Word, you would be right back where you left off: cursor in the right place, document properly scrolled/zoomed, etc. Push notifications will be part of the package as well.
Application installation will go through things like the Marketplace alone; so you won't be able to 'side-load' applications onto the device. This seems like a major step backwards to me, but hey, it worked for Apple, right? I doubt this part of the rumour is true - there will probably (hopefully...) be an advanced switch or something.
Even though I didn't particularly like my time with Windows Mobile, there was one thing it excelled at: expandability. You can do pretty much everything with a Windows Mobile/PocketPC device, and there's literally an application for everything - including things like browsing network shares of all types, video players that play everything over the network, and what not. It'd be a shame to see that disappear.
Furthermore, even though Microsoft will not come out with a device of its own, it will exercise a lot more control over them. Microsoft sets the minimum requirements and will write all the device drivers, and OEMs are no longer allowed to include custom user interfaces. This effectively means that the software experience on all Windows Phones will be similar. It also enables over-the-air updates, so you're no longer dependent on manufacturers for providing updates. In other words, Microsoft wants better QA.
The interface is called "Metro", and is supposedly "very clean", "soulful", and "alive" - whatever that means. It will borrow heavily from the Zune HD, and come with a completely revamped Start screen. At MWC, this is exactly what we'll see: the interface.
Other tidbits include full Xbox Live integration, a "fast" browsing experience using a browser that is a mesh of IE7 and IE8 (oh boy...*), doesn't come with Flash (for now), Silverlight is only available outside of the browser, Zune software will take care of syncing, and a whole load of more details. Apparently, we will be surprised by how far ahead Windows Phone 7 is. The first devices are expected to ship by September 2010.
* If you get that "oh boy" reference, than you really know your foreign cinema. Unless you're Swedish, of course - in which case it's just cinema.