It's hard to overestimate how important the launch of Windows Phone 7 is to Microsoft . The smartphone isn't just another gadget--it's the future of computing. Mobile, location-aware, constantly connected, cloud-based, touch-based--this is where computing is going. And Microsoft has squandered an early advantage by letting Windows Mobile rot, turning from a once-promising mobile OS to an embarrassment.
Windows Phone 7 might be the last chance Microsoft has to enter the smartphone market. It's got innovative ideas, great hardware partners, and perhaps the best services (Xbox, Zune) of any of the major tech companies, but it's very late to the game. Google  is only now, starting with the release of the Motorola Droid last November, starting to become truly competitive--it took a solid two years. Apple  defines the category, and has since 2007. Palm/HP  is the great unpredictable underdog. And BlackBerry lurks in the shadows, a lumbering, vanilla giant who, lest we forget, is still the market leader.
There have been some discouraging signs from Microsoft recently. The six-week life of the Kin  is a very, very bad sign, a clumsy struggle in which Microsoft came out looking out of touch, incapable of realizing a doomed product, and misunderstanding of the entire smartphone category. A recent look at the Windows Phone 7 offices  shows a slight edge of panic, with the team leader seemingly making apologies for the platform even before its launch. It's all been very worrisome.
But this is a good sign. Word came today  that Microsoft is paying top-level developers to create apps for Windows Phone 7, providing free tools, handsets, and just straight funding for development. Microsoft is even offering revenue guarantees, with the promise that if the guarantees are not met, Microsoft will pay the remainder out of pocket. That's a great step, and a good way for Microsoft to leverage its near-bottomless pockets to help out the new platform. It's all circular: Good apps ensure good sales, good sales ensures more good apps (since devs can make more money off a bigger audience), more good apps equals, um, more good sales. More good!
Thanks to the App Store, a solid array of third-party software has become essential to the experience of using a smartphone. Palm's WebOS failed, in part, because of a dearth of good apps. Android's App Market is exploding in quantity, but the quality is still iffy. If Microsoft can ensure a good crop of utilities, games, timewasters, news apps, and multimedia at launch, it would go a long way to improving Windows Phone 7's chances.