A New User Interface. Say goodbye to the Windows-like, multi-level menu system and say hello to the Metro user interface. Windows Phone 7 utilizes touch-friendly tiles (read: no stylus needed) and hubs that expand to make excellent use of a smartphone’s limited display. The interface borrows heavily from Microsoft’s ZuneHD music player and provides for quick navigation as shown in this demonstration video. The home screen tiles are constantly updated to show important information at a quick glance, much like widgets on other phone platforms.

Who’s Building the Hardware? LG, Samsung, Dell, Asus and HTC are all confirmed hardware partners, although it’s not yet clear if all of them will have phones for next week’s launch. The most likely candidates for the initial launch are Samsung, LG and possibly HTC, which has long been a builder of Microsoft handsets. Microsoft is reluctant to allow user interface customizations on Windows Phone 7, so don’t expect to see HTC Sense, a custom UI, on the new phones. Interestingly, every one of the initial hardware partners also sells Google Android devices: the most successful being Samsung with several million sales of its Galaxy S handset. Expect high-resolution, multi-touch displays paired with speedy processors that will help Windows Phone 7 devices compete with current smartphones such as Apple’s iPhone 4 and various Android handsets.

Games and Music. Windows Phone 7 integrates with both Microsoft’s Xbox Live and Zune services. Users will be able to view, share and modify their Xbox Live avatar, achievements and profile. More than 50 Xbox Live titles will be available for the small screen by the holidays, including Uno, Halo: Waypoint, and Guitar Hero 5, just to name a few. Multiplayer gaming will also be supported. Fans of the Zune subscription service will have unlimited access to over 6 million tracks in the Zune music library. The $15 monthly Zune Pass subscription also includes 10 monthly downloads to expand personal music collections.

Browsing the Web. Unlike most other smartphones that today use a WebKit browser, Windows Phone 7 will run a modified version of Internet Explorer. Tabbed browsing is a feature and tabs will load in the background, allowing for quickly browsing multiple web pages. Support for Adobe Flash won’t appear at launch, although Adobe has said to expect it in the future. As a result, tapping a YouTube video in the browser will open the YouTube application. Early video tests comparing Microsoft’s new mobile browser to an iPhone and Nexus One shows excellent performance, speedy web page rendering and a positive multi-touch experience.

Carriers. In the U.S., Microsoft’s new phone will initially be available for GSM networks, meaning AT&T and T-Mobile. Verizon Wireless has invested heavily in Google Android devices to combat the lack of an Apple iPhone in its portfolio, and will not be part of the initial Windows Phone 7 launch event. The CDMA carrier has said it will likely offer phones running Microsoft’s new platform in 2011. Sprint, the other main CDMA carrier here has not publicly committed to any new Microsoft devices.

Related content from GigaOM Pro (subscription req’d):

• Could Games Redeem Windows Mobile and Palm’s webOS?
• Why Carriers Still Hold the Key to Handset Sales
• Is an iPhone- and Android-Only World the Best We Can Do?

The investment firm said Microsoft is working with multiple manufacturers to create a “Zune-like” handset under its own brand. The phone would debut at Mobile World Congress in Barcelona next month or at CTIA in Las Vegas in March, Jefferies predicts, and Microsoft could release versions of Windows Mobile 7 as the device comes to market. That would be huge news for Microsoft in light of recent reports indicating that the newest version of Microsoft’s mobile OS might not see the light of day until next year.

The prediction comes amid a flurry of rumors regarding WinMo 7, many of which are centered around the operating system’s focus on entertainment and social networking. Jefferies expects the OS to feature premium services including a Zune video store and music offerings, and reports indicate WinMo 7 will support Xbox Live. The latest rumors indicate Microsoft will launch two flavors of Windows Mobile, targeting its traditional core business users with one version and younger consumers with another.

Regardless of when WinMo 7 comes to market, the dual-OS scenario would be Microsoft’s best play to get back in the smartphone race. Windows Mobile has increasingly been relegated to a business niche while Apple’s iPhone and other consumer-friendly gadgets find broad audiences. But a complete shift toward entertainment would risk losing the enterprise segment that represents Microsoft’s core wireless market. Targeting consumers as it continues to serve the business segment would be a big step toward regaining Microsoft’s relevance in mobile.

In-post image courtesy Microsoft.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Report: The Connected TV Marketplace
• Report: Monetizing Digital Content
• IT Is Google’s Key in Mobile Enterprise

Microsoft came out with Zune to compete with the iPod, added a couple of features, and proved to be one giant money sink for Microsoft. After a 54 percent decline in sales in the most recent quarter, John Paczkowski rightfully dubs it: Zune to be forgotten. It’s the same story with the BlackBerry Storm. What was supposed to be a hurricane has so far turned out to be a mild tropical disturbance. The Wall Street Journal says the Storm is off to a bumpy start, and has sold about 500,000 devices in its first quarter.

Now if Research in Motion (and Verizon) were smart, they would have tried to do something incredibly different with their BlackBerry Storm. Instead they spent $100 million on marketing a product that got panned by critics, was buggy enough for customers to complain and more importantly, turned out to be nothing more than a wannabe iPhone. The problem most touchscreen phones face is that they will always be compared to Apple’s iPhone and for a myriad of reasons will fall short of expectations. It happened before in the music player market — where the iPod, with its ease of use and elegant design set, itself on a higher pedestal.

And when it comes to touchscreen phones, iPhone occupies a similar top spot. Don’t get me wrong: The iPhone is by no means perfect, and at least twice a day I curse the device and AT&T’s network. But the Storm is even worse — enough for me to touch the screen, wait and scream.

I often write about companies forgetting to play to their own strengths and instead trying to follow others. Storm (and Zune) are good examples of this corporate disease. Why does RIM need to have a touchscreen device? Just because Steve Jobs tweaked Verizon’s nose? Verizon and RIM would have been better served if they had built a device that had touch capabilities but really played to RIM’s strengths — keyboards, multitasking and security. I love the BlackBerry Bold. It’s almost perfect for someone like me who gets a massive amount of email, loves to IM on the go and likes to Twitter all the time. Marry it to a great browsing experience and pack in better battery life and an awesome radio — and it would clean up in the smartphone market.

Meanwhile, I’m looking to trade in the Bold for the new T-Mobile 8900 Curve!

The post landed me on Yahoo Tech Ticker. Check out the video:

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Mobile Q4: All Eyes Were on Android, 4G and the Rising Tablet Tide

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Mobilize 09 Wrap-up
• A 2011 Green IT Forecast

Here, the Shins’ “Sleeping Lesson” plays during the Zune’s “Academy of Dreams” commercial. Points to Microsoft for getting their most recent album.

I can’t find a video of this Apple iPhone ad online, but it was on during tonight’s episode of Heroes (does it smell like nerd in here?). This spot doesn’t use the music, just the cover to the band’s earlier album “Chutes Too Narrow.”

Thanks to the magic of DVRs, digital cameras and my wife’s enduring patience, I was able to snap a pic: I’m not above a band using its music for ads, it’s just funny that two competing products are using the same pitchmen at the same time. Wonder which one the band uses.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Report: The Connected TV Marketplace
• Report: Monetizing Digital Content
• Content Farms: The Players, The Benefits, The Risks