Microsoft's Windows overhaul carries new risks for Nokia

Troubles afflicting Finnish mobile handset maker Nokia Corp. could get worse before they get better.

Microsoft Corp.'s overhaul of its smartphone operating system set for launch this autumn will change the basic software so extensively that won't be able to run on Nokia's new line of Lumia handsets. This could mean sales of the Lumia devices, which have so far failed to ignite, may flag further as customers hold out for the next generation's wow-factor functions.

The Windows Phone software update, displayed for the first time at an event in San Francisco on Wednesday, shows the Redmond-based software giant is ratcheting up the technology to bring it in line with Windows 8, a soon-to-be-launched revamp of Microsoft's computer operating system that will also work on tablets.

This is a major blow for Microsoft's main smartphone partner Nokia, whose new range of Lumia mobile phones and smartphones launched late last year and early this year run the old version of the Windows Phone operating system. The new version Microsoft's software is so different from the old one, that the Lumia devices won't be able to run the new software.

"The reason a full update to the Windows Phone 8 platform is not possible [for current Lumia devices] is primarily due to the jump in hardware capability for future devices, which can't be made available on existing hardware," said Nokia spokesperson Doug Dawson.

He added that Nokia therefore will try to make sure that current Lumia users will get "many of the benefits" that the Windows Phone 8 software upgrade is bringing about, such as an improved camera function, a user interface that is similar to that of Windows Phone 8 and games from Zynga Inc.(ZNGA).

Malik Saadi, an industry analyst at Informa Telecoms & Media, said Microsoft's eagerly anticipated Windows Phone 8 operating system fixes many of the issues with the old Windows Phone software and could satisfy consumers' appetite for innovation, but he recognised the hardship it will cause to Nokia during the transition period.

"Operators and users will hold on until the new devices are in the market this coming autumn," Mr. Malik said."This will have

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