Microsoft just previewed a major update to their smartphone OS Windows Phone 7 codenamed "Mango". Mango contains 500 new features and will be rolled out in the coming fall on new devices and as a free update for existing Windows Phone 7 customers. Microsoft aims to improve usability by better app organization, multitasking and new internet features including Internet Explorer 9.

Microsoft Windows Phone 7.5 "Mango" UI: Home screen integrates Xbox Live, IE9 Brings you full web experience, while third screen shows your "one stop shop" personal profile

Microsoft Windows Phone 7.5 "Mango" UI: Home screen integrates Xbox Live, IE9 Brings you full web experience, while third screen shows your "one stop shop" personal profile

With the update Microsoft finally delivers the pledged multitasking functionality that people were missing since the launch of the smartphone OS. Multitasking allows apps to be run in the background, for example you could stream music in the background while doing something else. But Microsoft didn’t stop here. The live tiles now work more dynamically and show more information. These can also be personalized to show information about particular persons or groups.

Also the way how apps are integrated into other features has been considerably extended. Relevant apps will be connected with search results, this is called App Connect. Microsoft explains this by an example. Say the user searches for a movie, you get show times and theater locations. App Connect then shows the option to directly buy a ticket via the Fandango app.

In order to facilitate the various forms of present communication, in Mabgo it is organized around persons not apps or services. It allows the user to seamlessly switch between text messaging, Facebook chat and Windows Live messenger within a single conversation. Twitter and LinkedIn can now be integrated into contact cards and support for Facebook check-ins is added as well. Furthermore, it is now possible to link multiple mail accounts to a single inbox.

Last but not least in the major WP7 update, Internet Explorer 9 gets integrated. IE9 adds support for HTML5 and full hardware acceleration. This gets complemented with some new search features. Local Scout provides information about nearby restaurants, shopping and other activities. Visual search enables the user to search based on photographed bracodes, QR codes and Microsoft Tags without utilizing a separate app. Bing now also offers music search, which allows to find a song by simply holding the phone to an audio source.

There was no word about Skype integration, but it’s probably a bit too early for that considering the deal just went through. In order to strengthen the ecosystem, Microsoft announced it will support additional languages, including Brazilian Portuguese, Simplified and Traditional Chinese, Czech, Danish, Dutch, Finnish, Greek, Hungarian, Japanese, Korean, Norwegian, Polish, Portuguese, Russian, and Swedish. Also the Windows Phone Marketplace should become available in more countries.

While some partners like Acer, Fujitsu and ZTE announced to bring new phones to market, there is no concrete information about Windows Phone products from Nokia. The finnish phone giant reportedly wants to skip Windows Phone 7 and leverage a future version named Windows Phone 8 in 2012. Until then, expect further market share losses of the company. In the first quarter of 2011, Nokia shipped more than 107 million phones, commanding 25.1% of the worldwide phone market according to Gartner.