Ever since Steve Ballmer made that surprise announcement at CES 2011, there has been a lot of speculation about just how Microsoft would be bringing Windows to the ARM architecture. Would it be a whole separate line? Would it be compatible with old applications? Would it be cheaper?

Many of these questions have been answered in a long and technical post on the Building Windows 8 blog today, as Steven Sinofsky explains how they developed (re-developed, really) Windows On ARM, or WOA, and why they made the choices they made.

Some major points, for those unwilling to read: WOA will be totally incompatible with x86/x64-based applications; it will include a desktop only for Office apps and file management; it will be focused on portability, battery life, and “integrated quality,” by which they mean it ships with, in a way, everything you need. On that note, it won’t be available separately as a software purchase; it will only be available pre-installed on devices.

The process of transferring Windows to ARM was not an easy or short one. They’ve been working on it for years; for an indicator of how long, consider that when they started, there was no such thing as an ARM-based tablet. They had to run the OS on ARM phones like the one pictured here from Asus.

As ARM systems are built on a completely different principle from the Intel, AMD, and IBM-led PC-compatible spec, some serious changes had to be made. Device and hardware management would have to be completely rethought. Back compatibility was a fairy tale. And there was no way to stress-test builds on debug rigs the way they’d been doing for 20 years on racks of x86 PCs. At least, there was no way until they built a way, and by next month they plan to have 3200 machines running WOA in stacks (also pictured) to troubleshoot, stress test, and so on.

Yet some things had to stay the same, as well: every ARM device would have to be outfitted with UEFI, ACPI, and the Windows Hardware Abstraction Layer in order to create a basic platform on which Windows would be comfortable. After that, things like DirectX, discrete device inclusion (printers, GPS units, and the like) could be added. And higher-level apps were a piece of cake, apparently, Microsoft having built them in a forward-looking way with allowances for multiple architectures.

The restrictions imposed by this new environment, and some design decisions made along the way, have produced something of a different product from the Windows we all know and some of us love.

For one thing, back-compatibility has been essentially abandoned. A clean break sounds good on the face of it, but consider that part of Microsoft’s success has been its ability to accommodate legacy hardware and software from ridiculously far back. Remember that video about installing every version of Windows on top of the last?

Doom II, installed on Windows 1.0, still ran without problems in Windows 7. That’s amazing. WOA breaks from this tradition with a purpose, though.

Sinofsky describes WOA as “a new member of the Windows family, much like Windows Server, Windows Embedded, or Windows Phone.” It’s not meant to play games installed on operating systems from a quarter of a century ago. It’s meant to be a point of access for the current, and only the current, Windows ecosystem. It is similar to the “full” version of Windows 8 only in those parts that have been developed specifically for Windows 8.

Think of it this way. Windows 8 for x86/x64, in a way, includes Windows 7, Vista, XP, 98, 95, and so on. It is built with compatibility in mind, as part of a venerable line of operating systems. Windows On ARM includes only Windows 8. It’s as if the last ten versions of the OS never happened — though there are echoes.

This breaks the OS for some people — me, for example — but it could be a breath of fresh air for many. This OS is at once bare-bones and all-inclusive: it comes with a familiar version of Office, it will almost certainly be cheap and easy to deploy by the hundred or thousand, and it’s absolutely a known quantity.

Apps for WOA will all come from the Windows Store, and will all be Metro — except for Office (and a few other trusted programs), which will be able to run in the traditional desktop environment for productivity purposes. It’s a bit puzzling, this admission (in a way) that the traditional desktop is superior for productivity, but it’s also the truth: an all-Metro productivity suite would be unfamiliar to Microsoft’s base. They’ll make it optional for now, and drop the other shoe later.

The focus on tablets is made plain: “you don’t turn off a WOA PC.” You don’t have sleep and hibernate modes. Like a phone or tablet, you just hit the button and it goes into a newly-developed low-power mode in which the battery will reportedly last weeks. These tablets, while they won’t run the “real” Windows 8, will be totally functional (it runs “super well”) access points to the Windows ecosystem. And with the increasing focus on cloud storage, web-based apps, and mobility, that limited access may start looking less like a bug and more like feature as time goes on.

There’s still lots to be done, says Sinofsky, but they hope to launch Windows On ARM at the same time as the commercial launch of Windows 8. It’s a real change for Microsoft, which is heartening to those of us who have been disappointed with their willingness to honestly self-evaluate lately. Devices are being tested from NVIDIA, Qualcomm, and Texas Instruments; whether a worthy product will be available at launch time is still a mystery, but it’s obvious that everyone involved is deeply invested.

And lastly, here’s the video that accompanies the blog post. It explains some things but generally just shows that WOA will act more or less like x86/x64 Windows 8:

Microsoft announced this morning a new agreement with 24/7 Inc. , a company that designs intuitive customer experiences. As a part of the deal, Microsoft will merge its interactive self-service assets (meaning people, clients and technologies), into 24/7 Inc. The deal also includes an R&D partnership, long-term IP licensing and Microsoft taking an equity stake in 24/7, Inc.

According to the companies, the purpose of the new partnership is to jointly bring the power of natural user interfaces and data analytics at cloud scale (Big Data) to enable the future of customer service businesses. Today’s customers are looking to interact with businesses through many channels – web, mobile, social media and even the living room TV – which is what’s encouraging this move.

24/7 Inc. is the maker of what it calls a “Predictive Experience (PX)” platform, which delivers customer experiences online and on mobile, and offers speech and live chat software. To do so, it leverages large-scale data analytics to try and predict what customers want in order to better serve them. The solution is then sold to businesses looking for a self-service voice response solution. Some of its current customers include Avis Budget Group, Ovum and United Airlines.

Going forward, 24/7 Inc. will use Microsoft’s TellMe speech and natural language technologies in its customer service solutions. Those solutions will also be integrated with Windows Phone, Bing and Microsoft Dynamics CRM.

You may remember TellMe, acquired for $800 million in 2007, as the technology that powers Windows Phone’s voice recognition, but it also powers Bing Voice Search for mobile, Xbox  voice recognition in Kinect,  Windows 7, Ford SYNC and KIA UVO, among other things.

According to All About Microsoft, some subset of the 400 or so TellMe employees are being shifted to 24/7, along with Microsoft’s IVR assets, but Microsoft would not disclose the exact number. The cloud speech service part of TellMe, however, will remain with Microsoft.

Terms of the deal and the size of the equity stake were not provided.

Deep in the skunk works of its Research and Labs divisions, secreted around the Seattle area, Microsoft is working on totally reinventing the way people interact with their computers. Very little is out in the open or in more than a prototype form, but the work is unquestionably being done.

Last week it transpired that Microsoft is working on building Kinect into the bezels of laptops, and after that, presumably, tablets and eventually mobile phones. But it’s not just about building out the install base for Dance Central 3. It’s enabling the next generation of awareness in our electronics. The iPhone ushered in an era where our devices know when we touch them. Microsoft is working on the next one, in which our devices will simply know us.

How do you, as a person, experience the world around you? You mostly see and hear, and to a lesser extent you touch, taste, smell. Our devices, however, are largely restricted to an extremely limited sense of touch. Why shouldn’t they be more like us?

There’s a good reason, actually: computers don’t need to be like people because computers aren’t people. For years this has held true: the computer’s primary purpose for decades was to sit still and perform calculations humans couldn’t do. Interaction with a computer was strictly input, output. You didn’t interact so much as instruct, and wait for the result.

But mobile phones and touchscreens and laptops began changing the idea of a computer into something more personal, more interactive, more two-way. And technology exists to let our devices become more human. Why not let them?

Microsoft wants to. Despite their reputation among tech enthusiasts as a sort of stodgy blue-chip still coasting on the PC explosion of the late 90s and early 2000s, their R&D sections are world-class and put out actually innovative ideas and devices all the time. The trouble, briefly stated, is that implementing these ideas as products that fit into the Microsoft ecosystem isn’t easy, and even if it were, Microsoft has no talent for it.

But this work on “Natural User Interaction,” or NUI, is more promising. People have embraced the idea in gaming: the Wii led the way and the Kinect brought the future into your living room, though the future is a little laggy and the voice controls spotty. People are simply interested in new ways of interacting with their content and devices. For years the promise of a different kind of interaction has been dangling, in the form of sci-fi shows and movies usually, and people have always been intrigued by it.

So people want it — and Microsoft wants to make it — and they have the technology. Purchasing the IP behind the Kinect was an extremely smart move, maybe smarter than they know. What started out as a way to cash in on the market the Wii had created has snowballed into an entirely new form of interacting with computers, and a way for Microsoft to differentiate itself meaningfully for years to come.

It was reported to me that one of the things the new Kinect/depth/IR sensors will do is read lips. At first it sounds silly. Why? Maybe so it can better interpret your words from across the room, or in a loud environment. You won’t have to turn the music down to search and navigate the web on your TV or tablet.

And then it becomes clear that it’s just part of a larger suite of “senses” the device would have. The new devices are to have face recognition and voice recognition, so your password will be you saying your password in your own voice, not someone else, and not a print-out of you. They’ll be able to pick you out of a crowd, say a small party, and will be able to tell when you’re giving it a command — because you make eye contact and move your lips. Again, it sounds perfectly ridiculous until it starts sounding perfectly natural.

Another feature described was a sort of 3D desktop on which you could actually grab files and place them here and there. This has been tried before, of course, and Windows 8 is looking decided two-dimensional, so it’s probably more of a research project than anything. But it’s still interesting. Think of the basic gestures you might be able to make. One was described as pulling out a drawer. In the surprisingly resilient desktop metaphor of files and folders, what could be more natural? Or perhaps raising your hand palm up to show the task bar or dock? Trace your finger in a counter-clockwise circle to undo, clockwise to redo?

User experience reflects both the needs of the user and the capabilities of the device. For a few years now we’ve been satisfied with running our fingers along a slab of glass, producing an electrical signal interpreted as a point or blob — mainly because capacitive screens got good and cheap, and nobody wants to plug a mouse into their phone. But there are many other ways of interacting with our new mobile objects and information. Soon the glass touchscreen will seem as quaint as the command-line interface.

And yet, some are no doubt thinking, we still have some command-line interfaces in use. Sure. And mice and keyboards are still better for productivity, and a pen and paper is better for sketching out ideas, and headphones are better for listening to music in public. There are countless use cases and potential applications of technology, but it’s good to recognize when one should give way or simply isn’t applicable.

Microsoft is working hard at this, and you’d better believe that Apple is too, though they aren’t nearly as open about their research. And for once, they seem to actually be missing a piece of the technology pie: Microsoft has a head start on them in the world of NUI, having purchased and developed depth and personal sensors for at least two years now. Apple can always throw money at the problem, but it’s pretty clear that Microsoft has perceived this rare advantage and will be using it as a wedge wherever possible.

This shouldn’t be taken as an indication that Windows 8 is going to be anything other than advertised, but I think it will be a test bed for some major changes coming down the line. Microsoft wants to change the way people interact with computers because it sees, hopefully not too late, that the old way, the PC way, treating a computer like a box that computes things, is on its way out in a hurry. So if computers are going to be a part of the real world, they need to be able to live in that world. Eyes, ears, and who knows what else. It’s only creepy until you can’t live without it.

[images: Matthew Fisher/Stanford, Wolfgang Herfuntner]

A video detailing the new features of Windows Phone 8 Apollo — originally intended for Microsoft’s smartphone partners — has leaked into the hands of PocketNow editors.

Yay!

In my opinion, Windows Phone Mango is a solid platform that’s quicker and smoother than anything I’ve seen on Android. Still, when looking at devices from Microsoft, Apple, and Google side-by-side, the Windows Phone always seems to lose in the spec department. That said, WinPho boss Joe Belfiore has plenty in store for us come Q4 2012 (the rumored release date of Apollo).

As far as hardware is concerned, Microsoft is ready to take it to the next level, adding support for multiple cores, NFC, and full microSD card storage. Apollo will also support four different screen resolutions, though Belfiore apparently wasn’t very forthcoming with specifics on those.

Developers are going to love this next part. According to PocketNow, developers will be able to use most of the same code when porting a Windows 8 app over to the Windows Phone platform. Of course, both platforms will share the same Metro-style interface, and that NFC radio will allow for tap-to-share capabilities between various Windows 8 devices.

Microsoft used to tout its Tango video chat app, but it would seem as thought that Skype acquisition isn’t going to waste. Windows Phone 8 will have Skype baked right in, taking video chat and VoIP calls to a much higher level of audio/visual quality. Redmond expects at least 100,000 apps in the Marketplace by the time Apollo launches, at which point developers will have native code support and the ability to implement app-to-app communication.

Now that most of our data plans are no longer unlimited, keeping track of data consumption is more important than ever. That said, Apollo will offer up a live tile for data usage called DataSmart. According to PocketNow, the feature will give precedence to WiFi connections. IE10 will include built-in server-side compression, which should reduce data usage, and the Local Scout tile will eventually hook you up with real-time locations of nearby hotspots.

Windows has always been a powerhouse in the enterprise, and it’s about time the same was true for Windows Phone. That said, Apollo will bring with it BitLocker encryption support for full-disk encryption, along with the option to deploy company-specific apps behind enterprise firewalls.

I’ve said it before and I’ll say it again: Windows Phone is on its way people, and with such a hearty update on the way, I’m only that more confident in my prediction. I’m in good company, too.

We’ve known for some time that Microsoft would be bringing official Kinect support to Windows this week, but one thing they kept quiet was the fact that they’d be debuting a new version of the hardware as well.

It’s not tiny, as some hoped, or built into the bezel of a laptop, as we know it will be eventually, but it does improve on the original in a few ways.

The most visible improvement for most people will be a slight improvement of the minimum distance required for the device to operate. The Xbox 360 Kinect required you to be around 50cm away at least, and the Kinect for Windows will go down to 40cm — about 16 inches. That means it can sit on a monitor on a user’s desk and capture movements without the user having to scoot back at all.

Other improvements are of the softer variety. Microsoft has improved the tracking software, providing an improved raw sensor stream, better color/depth synchronization, and more accurate skeletal tracking.

On the downside, the new version costs quite a bit more: the new Kinect for Windows is going for $250, while the 360 version is selling for just $100 at the Microsoft Store right now. The justification for the price seems to be that the new version has been updated to support multiple systems and situations, rather than the standard 360 hardware it’s been running on for the last year. And I’m guessing they’re not subsidizing this price quite as heavily.

The official SDK won’t work with the 360 version, it seems, though you can still download the beta SDK, which works fine but officially can’t be used for commercial applications.

Microsoft says they’ve been working with hundreds of companies and seeing lots of unique applications and ideas, so hopefully we’ll see some of those hit soon. In the mean time our Kinect tag has lots of projects that demonstrate the versatility of the device.

Microsoft and BlackBerry maker Research in Motion (RIM) are teaming up today on the public release of BlackBerry Business Cloud Services for Microsoft Office 365, a name which surely Microsoft itself had a hand in creating. The new service will allow corporate customers to manage their deployed BlackBerry devices using Exchange Online, the hosted version of Microsoft’s messaging platform.

The addition comes at no extra cost to current subscribers of the Office 365 suite or the standalone Exchange Online offering, and supports any BlackBerry devices, whether on a business or consumer data plan.

Once enabled, the managed BlackBerry smartphones will be able to sync with Microsoft Exchange Online email, calendar and organizer data. BlackBerry Balance, a new technology that helps admins manage the corporate data on the device, while leaving personal data untouched, will also be available with this new offering. I.T. will be able to manage the phones using a web-based console, but employees will have access to self-service tools for password and device resets, remote lock and remote wipe functions.

BlackBerry Business Cloud Services is live now in 50 countries. More info is here.

Partnerships like this are one of the reasons why some mobile industry insiders believe that RIM could be a viable acquisition target for Microsoft. The companies are already working so closely together to integrate their technologies, and both share a similar end user customer base: the enterprise market. Reports that RIM has even engaged in takeover talks with Microsoft emerged in December, but nothing has yet to come of that. Instead, the company’s recent moves like the co-CEO step-down and (misguided) statements from new CEO Thorsten Heins (“I don’t think any drastic change is needed”) imply that company is attempting a turnaround, not putting itself on the auction block. At least for now.

Microsoft’s quarterly earnings statement didn’t have any big surprises. It was generally good news: record total revenue, growth in many key sectors, big sales in Xbox, 525 million total Windows 7 licenses sold, and they even seem to be losing a little less money in the Online Services area. But all that is a side show. 2011 was a big one for Microsoft in mobile (at least, big in that they took major actions), but for their core businesses it has been a hold-steady year. 2012 will be an adventure.

Windows 8 is Microsoft’s next big thing. And trends suggest that by the time Windows 9 comes around, things in the personal computing industry may look a lot different. The way they handle this next phase will set the stage for the inevitable “post-PC era” changes.

Look at the changes they’re building into Windows 8. The unification of the UI with Windows Phone and, to some extent, Xbox. A focus on non-standard form factors. ARM support. Integration of cloud services and apps. They’re getting ready for a final battle that they know will end in capitulation by the PC side, but when that time comes, they want to have negotiated a good position from which to bargain.

PCs aren’t disappearing, of course, and much of Microsoft’s income is from their enterprise, server, software, and services divisions. Those will be around for a long time yet, and businesses will be running on Microsoft for years to come. But the zeitgeist is moving on.

Online Services is still costing Microsoft half a billion dollars a year, which could be seen either as an ongoing investment or a failure to launch. They’re losing less than they did this time last year, though, on account of some decent growth.

What we’re seeing is the awkward early-middle stages of an attempted enclosure strategy by Microsoft, and part of that strategy is reducing the role Windows plays. If Windows was originally the center of Microsoft’s army and mobile and services were the flanks, things are changing so that things are more equally weighted. Both mobile and Windows will be accessing the same services; Windows will be more mobile, and mobile will be more Windows. It’s actually a bit Apple-esque: you use one, you’re far more likely to use the rest. It’s a winning strategy if you have good products. Microsoft has good products, but they’ve never been particularly good at saying why you should use them over the competition.

One thing they’ve got going for them: the developing market. Places like China and India are a wild card, markets billions strong that are disconnected from the normal Western software trends. But as they emerge further onto the global stage and their consumers have more to spend, they’ll become a more potent market force. Microsoft noted in their call that developing markets were growing faster than developed ones. It shouldn’t come as a surprise, and certainly Microsoft sees what’s coming.

Will a newly-empowered middle class in China buy Macs? Will they buy Android tablets? Or can Microsoft get a foot in the door with, say, cheap Windows Phone 7 devices like the Lumia 710?

The next year will show Microsoft positioning itself for major product synthesis. The post-PC era isn’t here, as some people are fond of suggesting, but it is coming, and Microsoft wants to guarantee itself a part in it. Not an easy task for the company that pioneered the PC era. They almost seem obsolete by definition — but the straitlaced Microsoft has been loosening up ever since Vista, and they might just have learned enough to ride this next wave without washing out.

Microsoft just reported its second quarter 2012 earnings with record revenues of $20.9 billion, an 5% increase from the same period of the prior year. The previous record, as far as I can Bing Google, was 19.95 billion in quarter 2 of 2011 (another holiday season).

Microsoft’s operating income, net income, and diluted earnings per share for the quarter were $7.99 billion, $6.62 billion, and $0.78 per share, compared with $8.17 billion, $6.63 billion and $0.77 last year.  Perennial loser the Online Services division (which includes Bing) lost another $458 million and Entertainment (which includes xBox) and Windows operating profits were also down.

“In addition to the continued strength of our commercial business, this holiday season was the strongest in Microsoft history, thanks to good sales execution and compelling products like Xbox 360 and Kinect,” said COO Kevin Turner in a release, “We are seeing a lot of excitement for new devices, from Windows 7 Ultrabooks to new Windows Phones, as well as growing anticipation for Windows 8.”

The company beat Wall Street’s revenue estimates as analysts were expecting earnings of $0.76 per share, with estimates ranging between $0.68 and $0.80. And it hit expected revenue square (about $20.9 billion), with estimates between $21.4 billion and $20.2 billion.

Microsoft’s earnings call will be at 2:30PM today, and you can follow it live here.

The Surface has been around since 2007, but the new and improved SUR40 is a much more usable device. Microsoft and Samsung were showing off the new touch-capable table in NYC today, and I was lucky enough to get up close and personal with it.

The specs in and of themselves are impressive: 40-inch 50-point multitouch screen with a 1080×1920 resolution, AMD processors, 1GB of memory dedicated entirely to graphics, a 4-inch profile, and a host of USB/HDMI ports. It’s the computer you always wanted, save for the fact that it looks like a kitchen table and costs about $9,000.

But chances are this won’t end up in your living room. Instead, it’ll show up in your favorite retail store, at a hotel, or at the mall. That’s because this device has been specially engineered for that environment, and the needs presented within it.

That is where PixelSense comes into play. It’s an engineering technique that basically replaces the original five cameras on the Surface with hundreds and possibly thousands of tiny sensors embedded straight into the LCD panel. That means it’s no longer the conductivity of your finger directing the screen, but the screen reading your movements.

In fact, the screen sees you even as your hand hovers over the table; Microsoft has simply told it not to recognize that.

Another cool feature of this PixelSense-equipped screen is that it can detect the orientation of your finger. That means that if I want to drag an image of some shoes I’m interested in over to my corner of the Surface, the screen immediately recognizes the direction of my finger (and thus, which direction I happen to be facing) and can realign the image to face me.

But that’s just a tiny piece of what makes this thing awesome. Since the screen reads everything (and not just conductive energy), it can also handle real world objects. Oh, and it can tell which way they’re facing thanks to a small optical tag located on the bottom of the object.

Before I delve into it, just think about the retail implementations of this. Here’s one I didn’t see in action but thought would be cool:

You walk into a Foot Locker and see a pair of Nikes that are calling out to you. The only problem is that they only have them in all white and you know you’ll scuff them up. You’d prefer something a bit louder. Perhaps a royal blue?

Plop the shoe down on the Surface where a unique optical tag on the sole of the shoe can be read. Instantly you’re in Nike ID, customizing that same pair of shoes into what you want them to be.

As it does with just about any product, the Surface will generate a Microsoft tag for your shoes that can be read by your smartphone, which can then take you to a purchasing site or be saved for girlfriend’s input.

The new SUR40 is made with Gorilla Glass and is also spill resistant, using drains around the bezel to keep any spilled liquids out of the internals. Again, perfect for retail. What’s interesting is even a few drops of water are read by the Surface thanks to PixelSense.

In short, it’s all about interacting in a new way with the brands you enjoy. I saw a few different implementations of it and found myself wishing that all shopping was done this way.

For example, FujiFilm has a deal in place in Australia (but was too shy to name the retailer just yet) where the Surface can be used to make picture books. Just plug in your USB, SD card, or the like, and your pictures are then uploaded to the device (no worries, they’re never saved to the hard drive). From there, you can drag, drop, customize, add text, and finally print out a receipt to be taken to the front counter.

Absolut Vodka also has a Surface-friendly app, though no one was that clear on whether or not it’ll be live in any venues anytime soon. Still, the app lets you be the DJ, and offers different mixed drinks based on the music you’re playing. Again, you can whip out your phone to read the tag matching this or that drink and save the recipe straight to your phone.

Kia has an app that works in a very similar way to my imagined Foot Locker/Nike app, which will let you customize the vehicle (paint job, interior colors, rims, entertainment system, etc.) while you’re in a dealership.

If high-end makeup is your thing, you’ll also be excited to learn that Neiman Marcus’ luxury beauty brand Le Métier de Beauté is using the SUR40 as a consultation table in the coming months. You can customize shades of certain eye shadow or blushes which appear on-screen as soon as the actual product is placed on the table, save the “recipe” of your end-result to your phone, along with a picture of yourself post-makeover. That way you can go back home, apply the makeup yourself, and still look like you walked out of the salon.

Two of my favorites mostly concern information, and the transference of information.

Royal Bank of Canada (RBC), for example, created an app that lets you work out your finances, savings, and any other special offers from the bank right on the Surface. That way you aren’t relying on the employee to give you information that is in your best interest, but can actually see the effects of whatever change you might be making to your account right in front of you. Full transparency is something the banking industry could use a hearty helping of, and also something that would probably lead more bank users to participate in programs and special offers.

Microsoft also showed me an app that will map out the inside of an airport and show you various retailers and food vendors in your terminal. The app not only shows special deals and offers from said vendors, but gives you the time it takes to walk there so you don’t miss your flight.

Of course, the possibilities are endless. If you have a loyalty or member card at a certain retailer, you can use that on the Surface to bring up your information and see if you have any rewards points to go towards a purchase, or take a look at which products are on sale. Companies can also choose to use the SUR40 for product comparisons, removing the employees and all of their “sell-more” mentalities from the purchasing decision.

Performance-wise I didn’t see any hiccups or issues at all, and I’d honestly love to have one of these in my living room as a coffee table. Sadly, I’m about $8,400 short. (The SUR40 costs $8,400.) Luckily, it’s available and shipping now so if you’ve got the dough it can be yours for the buying. If not, it’ll still be a lovely new technology to have in stores, train stations, and the like, and I can’t wait to see this thing roll out big time.

If you’re wondering why we didn’t stop by to test out the Samsung SUR40 touch-table, AKA the Surface 2.0, during CES, there’s a good reason: we did that last year. The device, while impressive, isn’t exactly new. But as it has little in the way of competition — the Surface is the nonpareil of touch tables — they probably didn’t feel they needed to get it out in any kind of hurry.

The device, which costs $8400 and ships this month, must be quite a bit more attractive than the original to companies eager to spruce up their public spaces. The old Surface was kind of a chunk, and the limited resolution was no help, either. Oh, and the price. The new Surface beats it handily in every respect. It’s flatter, lighter, wall-mountable, and 1080p.

As we learned last year, the SUR40 also has what they call PixelSense, tiny sensors built in between the pixels of the image that can detect light. It’s through these, not capacitive or resistive sensors, that your touches are detected. This also means it can read things like QR codes, whole-hand gestures, and text.

Here’s our hands-on from last CES:

One problem I see is that companies aren’t always willing to do what it takes to make a Surface effective. When we were at CES, we passed countless touchscreens and displays showing menus, promotions, local info, and so on. They were all pretty terrible: no multitouch, buggy and unresponsive UIs, and kind of useless info. But doubtless they cost only a fraction of what a Surface cost. Are restaurants and hotels going to be satisfied with this level of quality? Many, I fear, will be. To truly take advantage of what the Surface 2.0 has to offer, it will take thousands of dollars in development and training. Imagine checking in to your hotel via Surface, or ordering food on it. Great! But not easy.

Fortunately the development community for Surface has been around for a long time and is serious about what they do. I got a chance to hang out with a few developers, and it seemed to me that the capabilities of the thing are huge, but only for those dedicated to it.

At all events, the device should ship soon, and it might be just the thing to make your lobby or waiting area more interesting. You can pre-order or find out more at Samsung’s Surface page.

This may seem a bit of inside baseball, but it’s a fairly interesting fact for folks looking forward to thin-and-light Win8 devices running ARM chips rather than Intel. According Computer World, devices running ARM versions of Win8 will not be able to run other OSes, like Android, thanks to something called Secure Boot.

A version of Secure Boot is built into many mobile devices – namely phones and tablets – in order to avoid bootloader mobile attacks and, obviously, to keep things locked down. Windows Phone, for example, prevents folks from installing anything into the bootloader nor can they run off-brand software. However, folks love them some Linux and for these devices to be completely locked down could disappoint the hacker contingent.

Microsoft says that you can disable Secure Boot on larger systems, however, noting in the design documents:

It’s clear from this that Windows 8 is both a mobile and a desktop OS, depending on the install. The question, then, is what you lose in the move to ARM chips? More info as we get it.

Microsoft this morning announced that it has signed a patent licensing agreement with Android device manufacturer LG, its eleventh deal of the kind.

Microsoft says effectively 70 percent of all Android smartphones sold in the United States today are covered under its patent portfolio, not mentioning the fact that they’re also suing Motorola Mobility and NOOK maker Barnes & Noble over their Android devices.

Continuing a tradition that we hope will stand the test of time, Microsoft’s head of communications, Frank Shaw, took to Twitter to taunt Google.

First, Shaw tweeted “Hey Google – we are the 70% #anotherandroidlicense” with a link to their press release, and later said:

Can we just agree to drop the patents-as-weapons meme? When effective licensing enables companies to share IP, the metaphor falls apart

—
Frank X. Shaw (@fxshaw) January 12, 2012

The second one is of course a bit disingenuous, since pretty much every player in this industry employs patents as weapons, will at some point, or wishes they were in a position to do so.

Shaw isn’t alone in his endeavor to try and get a response out of the Google camp, by the way.

Here’s Brad Smith, Microsoft’s EVP and General Counsel, tweeting:

It's time to recognize that in #patent world, lawsuits are the 1%; license agreements are the 99%. #anotherandroidlicense

—
Brad Smith (@BradSmi) January 12, 2012

And here’s Horacio E. Gutiérrez, Corporate VP and Deputy General Counsel, tweeting:

How should the smartphone industry resolve IP disputes in the software stack? Let’s try licensing

—
Horacio Gutierrez (@horaciog) January 12, 2012

We love this stuff. We want more. Come on, Google, it’s your turn. Keep this going.

Update - no comment needed:

hey @robinwauters Google is responding like crazy on G+ i'm sure and it will show up in their search results shortly. tcrn.ch/xQzWiZ

—
Frank X. Shaw (@fxshaw) January 12, 2012

Microsoft has signed a patent licensing agreement with LG, maker of tablets, phones and other consumer electronics devices running Android or Chrome OS.

This marks the 11th deal with a device manufacturer leveraging Google’s operating system software; other major agreements were struck with the likes of HTC, Samsung and Acer, among others.

Now that the LG deal is done, Microsoft says more than 70 percent of all Android smartphones sold in the United States today are covered under its patent portfolio. Evil, or genius?

Either way, Android is turning into quite a cash cow for the Redmond software giant. No wonder Google refers to their methods as pure extortion and a sign that they’re afraid of Android.

Terms of the deal with LG were, per usual, not disclosed, although it’s worth pointing out that Microsoft says it expands upon a pre-existing agreement between the pair.

We’re anxiously awaiting Google’s response to this announcement.

Over at WindowsITPro, Paul Thurott outlines some details of Microsoft/Nokia’s (purported) marketing plans for Windows Phone in 2012. Amongst them: a $10 to $15 commission for retail sales people who sell Windows Phone handsets over Android or iOS.

In turn, John Gruber asks: “If this strategy was on the table, why didn’t Microsoft start this a year ago?“

Here’s why: because it’s an admission of failure.

Microsoft’s obstacle isn’t an easy one. When people walk into a phone store in search of a new smartphone, the sales dude generally offers up two choices: iPhone or Android. Meanwhile, the only people being handed Windows Phones are the ones who asked for them right off the bat.

Now, why is this? Is it because Apple and Google are coughing up piles of cash to get the sales reps to push their phones? Nope — while carriers and specific OEMs might offer spiffs for the sales of certain handsets, I can’t find evidence that Apple or Google themselves ever have. (I’ve been asking sales folks and carrier reps if they ever got a cut from either company all morning, and the only answer I got besides a bunch of “No way”s was a “Hah! If Apple paid me a special commission, I’d be rich.”)

It’s because, for the time being, Windows Phone just isn’t good enough.

That’s not to say that Windows Phone isn’t good, period — it is! But it also came out incredibly late in the game. When you’re the last one off the line, you have to do something so amazing, something so much better than what the folks leading the pack are doing, that you change the race entirely.

iOS did this by making smartphones simple, embracing the concept of “Apps” better than anyone else had before, and by riding that massive wave of momentum that comes from being Apple’s next shiny thing.

Android did it by becoming the anti-iPhone. One handset? “Heck no! Put it on all of them!” said Google. A tightly monitored, “walled garden” for an App Store? “Nope! Do what you want!” Google did everything that Apple would not (for better or worse), for the consumer and everyone else in the industry.

Windows Phone, meanwhile, has very few tricks that anyone could inarguably say that it does better. Oh, it does plenty of things — and it does them all differently. But different isn’t better; it’s just different.

When phone guys sell phones, they’re selling whatever they think will be the easiest sale and make their customer (and their managers) happiest. They do this not necessarily because they’re wonderful people who have deep compassion for everyone who sets foot in their store — but because dealing with angry people (and their returns) sucks. For now, this means iPhone or Android. Both do all of the snazzy things people see in the commercials. Both have a bazillion apps. Both have such massive user bases that few would ever look out into a crowd of people all with smartphones in hand and think “Crap. Did I pick the wrong phone?”

By offering up a chunk of change for each sale — especially when it seems that no one else is — Microsoft is essentially saying “Yeah, we know you don’t really want to sell this. We know that we don’t really have any killer features yet. How about some cash?”

Find your killer feature, Microsoft. Don’t just buy love.

Analysts at Credit Suisse are forecasting slower growth in mobile phone shipments worldwide for this year, at a growth rate of 2%. The increase is higher than previous forecasts but is down from the 12% growth it had projected for 2011, according to this Reuters report.

According to the firm, they’re expecting to see 1.85 billion handset sales in 2012, up from the 2011 forecast of 1.82 billion. They’re also surprisingly bullish on Nokia’s fate in the new year.

Perhaps the bigger takeaway from the analysts’ projections is how well it expects smartphones to fare in the coming years. By 2015, they are predicting that smartphone sales are on track to reach annual shipments of over 1 billion. The sales of these devices will eventually account for nearly 80% of handset industry revenue.

In somewhat related news, the brokerage also upped Nokia to “outperform,” saying that the handset maker will start to benefit from its transition from Symbian to Windows Phone in the second half of 2012, and will reach a “crossover” point in Q3 when Windows Phone begins to outsell Symbian.

Credit Suisse’s Kulbinder Garcha raised his price target to €6 from €4 on Nokia, saying, “Nokia’s focus on Windows will allow the company to drive a recovery through 2012 in both its top-line and earnings.” He raised his 2012 and 2013 EPS estimates to €0.25 and €0.60 per share, from a prior estimate of €0.24 and €0.40.

Garcha says his firm believes Nokia can command a 13% market share within the Windows Phone ecosystem, given its “sensible and aggressive pricing” and “decent support for Windows ecosystem as confirmed by our recent survey of carriers. (Really?) “And the quality of the Windows platform is quite good,” he added.

OK, the last one he can have – Windows Phone’s quality is good. But the first two are essentially stating that there’s a good chance that Windows Phone can make it as a viable “third ecosystem” after iOS and Android, and that carriers are interested in pursuing that option. This is based on surveys of 27 executives of global telcos who were found to be “widely supportive” of Nokia/Windows Phone.

Hmm. Given this great support from carriers (???), it’s odd that retail employees are reportedly being paid off by Microsoft and Nokia $10-$15 per handset sale to recommend Windows Phone to customers, then, isn’t it?

Features:

• 3.7 inch display (480×800)
• 8 GB storage, 512 MB RAM
• 1.4 GHz Qualcomm MSM8255 Snapdragon
• Microsoft Windows Phone 7.5 Mango
• MSRP: $50 with two-year contract

Pros:

• Small and light
• Windows Phone 7 Mango
• Bright, crisp screen

Cons:

• Weak plastic case
• Odd, huge main button
• Some odd port placements

Windows Phones, like Android phones, are hard to review. The operating system is obviously the same across the board and so the real question is “How does the hardware stand up to competitors?” The most important thing to consider here then is whether this phone stands a chance against similarly-priced Android feature phones and whether or not Nokia’s big gamble on WinPho has paid off? I’m leaning towards “Yes.”

First, I won’t address Windows Phone Mango (WinPho 7.5) in this review. We’ve written plenty about it in the past and we did a full review of the platform here as well as a discussion of the Mango update. There is plenty to love about Windows Phone, but we’re really talking about Nokia’s hardware.

Nokia did very little to change the stock Windows Phone experience. They added Nokia Drive app and a special “We Care” button that basically says they collect information about your phone and your use of services to improve Nokia products, a nod to a post-Carrier IQ world where we assume our phones are spying on us. Other than that, you are looking at a fairly standard Windows Phone 7 installation.

With that out of the way, let’s talk about…

The Phone
The phone itself is solid and slim, with a bit of a bulge on its rounded back. The 5 megapixel camera, while usable, is no great shakes but call quality and battery life were good. I got about 30 hours of standby with only a little use (with push enabled) and in my stress test (constant website updates over wireless) I saw 90 minutes. This evens out to about a day of strong use but you will need to recharge this thing every evening.

The phone is quite comfortable to use and the excellent Mango updates add a few interesting features to Windows 7.5. Nokia’s tweaks include a new color scheme (aptly named “Nokia Blue”) and the Nokia Drive application. T-Mobile has stuck their T-Mobile TV service on the Lumia and, for some reason, another navigation app in the form of TeleNav. You also have Xbox connectivity through the Xbox live apps.

The Good
I’ve been playing with a great number of phones this month, culminating in the truly excellent Samsung Galaxy Nexus. We have, however, avoided looking into lower-end Android phones because the experience has been poor. Burned too many times by phones like the Motorola CLIQ, the shambling, me-too models weren’t for us.

This phone changes that attitude. Many believe Windows Phone is too little, too late. Heck, I most of us thought the same thing. But it’s not. Carrier availability, aside, if I were to lay out three lower-end phones in front of a consumer – even a savvy consumer like you! – and you had to choose among, say, the iPhone 3GS (at 99 cents or whatever the price is on AT&T as there is no T-Mo iPhone analog), the LG DoublePlay at $49, and the Lumia 710, the Lumia and the iPhone would be the ones to pick. If you’re a T-Mobile customer on a budget? It’s a no brainer. I never thought I’d say this, but I’m bullish on Windows Phone.

The Bad
All is not roses and petunias, however. This thing costs $50 after two-year contract and you can tell. The front glass panel, while delightfully dark with a small bezel, features the goofiest-looking buttons I’ve seen this side of an N95. Nokia’s design language likes to place multiple features on a single, long button, so this button handles the “back” function, the “home” button, and search on one long piece of plastic that looks like a puffy sticker. It works, but it ain’t pretty.

The phone has no front-facing camera, which suggests that video chat won’t be available for the 710 any time soon. Mango brings support for mobile hotspot/internet sharing functionality, but it seems to be strangely absent on the 710. The plastic casing is also fairly chintzy, implying less “luxury” and more “phone you get for a penny at the T-Mobile store.” This is by design (and I mean that in a good way.) The Lumia 710, in short, is Nokia’s first commodity Windows Phone. While many oohed and ahhed over the Lumia 800, there will be none of that here. This is a good, solid phone for good solid folk. It is the good brown gravy in Nokia’s kitchen arsenal while the 800 is the bechamel.

Do these factors matter? Sure, but considering some of the unmitigated garbage that populates the lower price sections of most carriers, I’m happy to overlook some minor cosmetic affronts for the value for money offered here.

This phone reminds me of Windows Mobile devices like the Wing and the Blackjack. Those phones – aimed at, I’m not making this up, “scheduling moms” (or something to that effect – were designed to wrest the final Motorola RAZRs from consumers around the world and replace them with smartphones. Then iPhone came along and did just that, leaving Microsoft with unsold hardware and an OS that was by all rights garbage.

Microsoft regrouped – and took its own sweet time doing it – and figured things out. Thus the 710 was born.

The Bottom Line
Be aware that this is not an encomium of the Lumia 710 in particular but a sort of “Wow, they really did it” for Microsoft and Nokia. The 710 is obviously competing against the Radar 4G on T-Mobile and Windows Phone is still missing a few features like unified inbox and a video chat service, but you’re dealing with a few trade-offs. Microsoft is acting like Apple with WinPho, meting out improvements over time rather than fragmenting the OS over multiple devices.

If Microsoft knows anything it’s how to make code work on disparate and underpowered systems. If Nokia knows anything it’s how to make cheap phones for the millions. Together, these guys are creating a sort of low-end vortex that could pull the base out of the phone sales pyramid. See, the manufacture of the low end supports the mid-range which supports the high end. Until now, Android owned both the low-end while sharing the mid- and high-range with Apple. When Nokia floods the low-end with capable, usable, and fun devices, someone will have to worry.

Is this the Windows Phone to buy? If you’re in the market now (and you’re on T-Mobile), go for it. As Ross Miller notes CES is next week but I have my doubts that anything announced there would steer you one way or the other. Otherwise, keep an eye on Windows Phone. It’s only going to get better (or at least more popular) and when it does, expect a sea change in the way we think about feature phones.

Mobile industry watcher Eldar Murtazin took to Twitter today, claiming that Microsoft and Nokia executives will be meeting each other shortly to discuss the possibility and terms of a deal involving the sale of the Finnish phone maker’s smartphone division (including “one or two” manufacturing plants).

Such an agreement between the two tech giants, which Murtazin says could be finalized in the second half of 2012, would leave Nokia with nothing but its ‘dumbphone’ or feature phone business, mapping services subsidiary Navteq and Nokia Siemens Networks, the flailing networking and telecom equipment company (a joint-venture with Siemens).

Murtazin also asserts that current Nokia head honcho Stephen Elop will resign from his chief executive role in the course of this year (possibly to return to Microsoft, where he used to run the Business Division?). Furthermore, Windows smartphones would no longer be branded ‘Nokia’.

Finally, Murtazin says the decision to make the move is entirely Microsoft’s to make at this point, and that they’re particularly interested in purchasing Nokia’s valuable mobile patent trove.

Let’s back up for a second.

First, we should note that Murtazin has been telling everyone who would listen that this deal was in the works since May 2011, mere months after Microsoft formed an alliance with Nokia to make Windows Phone the primary platform for Nokia-made smartphones.

Nokia vehemently denied that such a sale of its smartphone division to Microsoft was ever on the table, but I’m increasingly leaning towards believing that it was – and that it still very much is.

Murtazin isn’t always right, but some of his predictions about everything related to Nokia’s business have been pretty spot on in the past, and the man has had some massive scoops, often breaking major news before any official announcements were made, as a result.

We should also note that Murtazin is not the only one whispering about a potential sale of Nokia’s smartphone unit. Such a move would make sense, after all; Nokia certainly hasn’t exactly been heading in the right direction in recent years.

On that note, it’s worth reminding you that Microsoft and Nokia were also rumored (see WSJ report) to make a joint bid for troubled Blackberry maker Research In Motion just two weeks ago.

If Microsoft were to buy out Nokia’s smartphone division, the deal would be reminiscent of Google’s (pending) acquisition of Motorola Mobility, and put the Redmond software giant in a slightly better position to compete with Apple, ‘Googorola’ and other Android handset vendors.

Rumor today, reality later this year? I wouldn’t be too surprised.

Also read: Chart: How Google And Apple Won The Smartphone Wars

In the gaming world, there are gamers, there are hardcore gamers… and then there are flight sim players. These guys exist on a plane of dedication that they can claim almost exclusively, with a degree of commitment matched only by their spiritual brothers: the train sim players.

Alas, no level of dedication can pay to keep the lights on if the fan base simply isn’t big enough… hence the layoff of Microsoft’s entire Flight Simulator team back in 2009. Looking to start afresh and bring new blood (and new wallets) into the fan base, Microsoft’s taking a different approach with their latest game, Flight: it’s going freemium.

Microsoft Flight will be free-to-play when it’s released sometime this Spring… as long as you’re only looking to fly over Hawaii’s Big Island. If you’re looking to expand your horizons with new locations (or to fly in any other planes besides what comes included), you’ll need to cough up some change.

This is… actually quite clever. Microsoft’s problem has never been getting a few people people hooked — it’s getting them to play in the first place. With a freemium model, the user base should spike straight up. And for every player that sticks around and invests in a triple monitor set-up with dedicated cockpit controls, they’ll have a mountain of DLC awaiting. The first hit is free, as they say.

We’ll have to see just how well the game gets embraced by Flight Simulator’s current fan base, though — so far, most of the audiences comments seem to be harping on it as little more than a minor upgrade or bashing its graphics engine. But hey — it’s (sorta) free!

If you’re not a Windows fan, then these next few months may not be too pleasant for you. WinSupersite’s Paul Thurrott reports that Microsoft and OEM friends like Nokia and Samsung will be spending around $200 million in order give Windows Phone a big U.S. marketing push in early 2012.

It’s quite a handsome sum, but the platform is in dire need of a shot in the arm. While the platform is picking up steam when it comes to app submissions, comScore’s most recent report shows that Microsoft’s mobile platform only accounts for 5.2% of all smartphone subscribers in the U.S.

That hefty marketing budget will be used to build awareness around all of the new Windows Phones that should soon see the light of day at a carrier store near you. Nokia’s Ace in particular will be enjoying a turn in the spotlight — BetaNews reported earlier today that Microsoft and AT&T will give the Ace the full hero treatment, which in this case means a concerted advertising push and in-store promotions.

Thurrott also notes that the time and money will be spent to bolster Windows Phone awareness with retail employees. While Windows-focused trainings are a given, Thurrott also mentions that sales incentives may on the books:

“The amount of payments are $10 to $15 per handset sold, depending on the number sold, for some handset models.”

It’s an interesting idea but it has the potential to make things a little dicey. If true, the plan will certainly entice employees (especially commissioned ones) to push Windows Phone like crazy. The inherent downside to it though is that customers may ultimately end up with a device that isn’t quite right for them.

Educating employees (and making a good time out of the process) is a great way to make sure that the platform’s strengths and features get a fair shake during a sale. Paying employees a little extra to push one platform over another seems more than a little disingenuous, especially when a customer could potentially be stuck with an unwanted device for a few years. It’s a very fine line to tread, and it’s possible that Microsoft could be left with some ill-will and unsatisfied users if a few salespeople take things too far. Thurrott makes no mention of specific carriers or retail outlets that have agreed to the spiff scheme.

In any case, I’d prepare for a veritable blitz of Windows Phone promotions and media soon. If Microsoft and company play their cards right, we won’t be able to think of buying a new phone without thinking Windows.

Internet Explorer 6 — long a thorn in the side of many web developers because of its quirks, limited feature support, and cockroach-like resistance to extinction —is finally on its last legs in the United States. And Microsoft is celebrating.

In a post on the Windows Team blog, Roger Capriotti, Director of Internet Explorer Marketing, writes that Internet Explorer 6 is now down to less than 1% market share in the United States according to the most recent data from Net Applications. It’s far from the first country to reach that milestone — Austria, Poland, Sweden, Denmark, Finland, and Norway have done it already — but it also had far more Internet users to convert. Alongside the US, Microsoft also notes that the Czech Republic, Mexico, Ukraine, Portugal and the Philippines have all dipped below the 1% mark as well.

And while it might sound a bit odd to hear about Microsoft celebrating the demise of software it built long ago, this isn’t a change of heart for the tech giant — the company has been doing its part to help IE6 die for quite a while. It created the IE6 Countdown, which tracks the progress of countries worldwide as they work to move people to more modern browsers (Capriotti writes that the site has been visited by 2.75 million people and has drawn 5.6 million views). And when Denver-based design firm Aten Design Group held a funeral for the woefully out-dated browser back in 2010, Microsoft sent along some flowers.

Of course, while Microsoft would love for all of these former IE6 users to upgrade to the latest version of Internet Explorer, that doesn’t seem to be happening. Recent reports from StatCounter and NetMarketshare show IE trending downward — from 59.22% to 51.87% between February and December 2011, according to NetMarketshare — while Google’s Chrome is making steady gains (11.41% to 19.11%, in the same report).

Update: Note that it’s only IE 6 that’s down to below 1% marketshare, not IE on the whole.