With the public unveiling of Windows Phone 8 today, the question on everyone’s mind is ‘Will Windows Phone 7 devices be upgradeable to Windows Phone 8?’ No, but Microsoft is offering a somewhat acceptable solution in Windows Phone 7.8.
So, why won’t you be able to update your Windows Phone 7 device to WP8? It all boils down to hardware. With NFC chips, multi-core processors, and faster GPUs. The key difference between WP7 and WP8 from a visual standpoint is the start screen, which 7.8 devices will receive. They just won’t be privy to things like NFC.