I’m not going to make some great revelation, as if I know the answer to this question. I have not asked my sources, and if anyone with irrefutable knowledge of the answer told me then I wouldn’t pass it on. But I will apply a little ‘softie experience to trying to answer it. You see, I can think of only one reason why Windows Phone 8 would not come to existing phones. And I’ll explore that shortly.
First let’s jump to the main technical issues blocking Windows Phone 8 from running on existing hardware. Done. Yes that was quick. As anyone who has followed Windows 8 on ARM (WOA) knows Microsoft has had Windows NT running on phone hardware for many years. Years before the Windows Phone 7 effort began. There is nothing about the speed of the processors or amount of memory in Windows Phone 7 that would prevent Microsoft from running Windows Phone 8 on those devices.
Microsoft and its partners are very specifically going after the low-end of the Smartphone market, which would include devices well below the specs of devices like the Nokia Lumia 900. So we have more evidence that it wouldn’t be a problem to upgrade most, if not all, first and second generation Windows Phone 7 devices.
Now let’s talk about business reasons. Indeed carriers are not going to care about, or want to put effort into, upgrading existing phones. And in many cases I agree with them. When Windows Phone 8 ships nearly anyone out there with a first generation Windows Phone 7 device will be approaching the two-year mark. For super rare devices like the Dell Venue Pro it makes absolutely no sense to offer an upgrade to Windows Phone 8. And even for the more popular models like the Samsung Focus or HTC HD7 it is quite possible that carriers will decide to offer customers replacement phones at no cost (as long as they renew) rather than push out the WP8 upgrade. That leaves Nokia’s phones along with the few second generation phones from HTC and Samsung as theyonly likely candidates for an upgrade. To take several million customers and abandon them, and make no mistake that is what not offering them an upgrade would feel like, less than 6 months into a two-year contract would be disastrous. Alienate your influencers and early adopters? The platform has weak enough consumer support already, so that would be fatal. The carriers might be that stupid, but Microsoft’s Terry Myerson is not. What, you say? Microsoft already did this once with Windows Mobile 6.x. Two answers for you. First, the Windows Mobile customer base was primarily enterprise users and Microsoft was going for consumers, so they took the risk that they would gain far more than they would use. Why not take that risk again? Exactly because it would be the second time. There is no more “willing suspension of disbelief” magic for Microsoft, they must build on the Windows Phone 7 customer base or Kin-themselves. Microsoft will make a Windows Phone 8 upgrade available, at least for second generation phones, unless…
So let me get to one scenario where Microsoft could decide not to make a Windows Phone 8 upgrade available, and to the alternative they would have to pursue. Current Windows Phone chassis specs have a screen resolution of 480×800 (aka WVGA), the minimum for a Windows 8 (not Windows Phone 8) Metro app is 1024×768. So what would be a natural minimum screen resolution for Windows Phone 8 Metro/WinRT apps? Perhaps not WVGA. In other words, although Microsoft has made it quite clear that existing Windows Phone 7 apps will run on Windows Phone 8, what if new Windows Phone 8 Metro apps could not run on WVGA displays? That would mean it makes little sense to put Windows Phone 8 on the older WVGA devices made for Windows Phone 7. Another way to look at it would be that Microsoft needs to kill off WVGA, rather than supporting it in new Metro apps, in order to avoid the long-term fragmentation for developers.
So if abandoning second generation Windows Phone 7 device owners destroys the platform and supporting WVGA unacceptably fragments the platform then what is Microsoft to do? Well, let us assume there are 10 million second-generation Windows Phone 7 devices on contract when Windows Phone 8 ships. Then Microsoft and its partners could simply offer to replace them all with free Windows Phone 8 devices. Oh, I’m sure there would be some strings (e.g., extend your contract by a few months so you have two years from when you received the new device), we won’t debate that right now. Assuming a manufacturing cost of $250 per phone, and that Microsoft bearsnthe bulk of the cost of the replacement phones, it would cost Microsoft $2.5 Billion. They have the cash, and it would go on the books as a one-time charge (similar to the $1 Billion charge they took to fix the Red Circle of death in the XBox 360). Wall Street would be fine with it, perhaps even applaud them for stepping up to align Windows and Windows Phone.
It was fun speculating about both a potentially real reason for not upgrading Windows Phone 7 devices and a way to address the resulting existential customer satisfaction problem, but that all still seems like a long shot to me. I continue to believe that, despite people with good sources having contrary information, Microsoft will offer a Windows Phone 8 upgrade to some subset of the existing Windows Phone 7 devices. I just can’t see Microsoft playing Russian Roulette with Windows Phone.