Although Microsoft has been largely absent from the mobile scene in the past couple years, and Windows Phone 7 launched with relative success, Microsoft is still a very minor player in a smartphone industry dominated by Android and iOS. RIM is up there as well with Blackberry…for now. But, RIM is on its deathbed and may not exist at this time next year.

Many analysts have predicted that Microsoft will be a strong competitor in the years to come–projecting Microsoft to be number two behind Android, and with greater market share than Apple’s iOS. It seems like Windows Phone 7 was the beta run to work out the kinks and hold Microsoft’s place in line, and WIndows Phone 7.5 is the real deal.

Only time will tell.

The patent war is a win-win for Microsoft. As a result of patent licensing agreements already in place, Microsoft made an estimated $150 million from Android devices–five times the profit generated from its own Windows Phone 7 platform. Microsoft’s proposed licensing agreement with Samsung could net another $285 million. Essentially, Microsoft benefits significantly from the success and popularity of Android.

Of course, part of that success and popularity is driven by the fact that Android is an open source mobile OS that manufacturers don’t have to pay licensing fees for. If the patent licensing agreements eclipse the cost of licensing Windows Phone 7, Android may not be as appealing, and vendors may turn to using Windows Phone 7.

While that makes sense as a win-win for Microsoft, it also seems like extortion on some level–like Microsoft will punish vendors for using Android to drive them to embrace Windows Phone 7. Smells like the making of an antitrust suit of some sort.

Nokia, on the other hand, I’m not so sure about. It is still a dominant player in the global mobile phone market, but it has less of a footprint when it comes to the exploding market of smartphones, and is almost unheard of in the UNited States right now. Nokia needs a strong smartphone to establish some relevance as a foundation to reinvent itself.

Nokia is in a virtual freefall, and hopefully the first of its WIndows Phone 7 smartphones–expected at the end of this year–can help it get back on course.

In Windows Phone 7 Mango, Windows Live Messnger is woven into the fabric of the messaging hub and provides one-stop access to instant messaging, text messaging, social networks, group chat, and more. An Inside Windows Live blog post explains the seamless integration, “For example, if we’re both online in Messenger, it will use Messenger IM so that we can share rich photos and more, but if we’re Facebook friends or just have each other’s phone numbers, it will automatically select the right service for our conversation. Of course, you can always choose (and easily switch to) the service you want to use for any given conversation based on presence, network availability, cost, and personal preferences.”

I used a Windows Phone 7 smartphone for a couple weeks, and found it capable, but I wasn’t blown away. By the end of the two weeks I was anxious to get back to my iPhone 4. But, I have to say that I am looking forward to taking Windows Phone 7 for another spin once Mango hits the street. Microsoft really seems to be innovating and developing Windows Phone 7 into a solid smartphone contender.

I can’t say that I rely heavily on the copy and paste functionality on my iPhone. In fact, I rarely use it. But, it is a feature which users expect on a smartphone. The iPhone originally did not have copy and paste either. After complaints and user backlash, though, Apple added the feature two years after the initial iPhone with the release of iOS 3.0.

Meanwhile, Microsoft was sitting on the smartphone sidelines–letting Windows Mobile die a slow death by attrition while it scrapped it all to go back to the drawing board and engineer a completely new mobile OS. That decision–the decision to build Windows Phone 7 from scratch rather than continuing to try and incrementally improve on the shaky foundation of Windows Mobile–was brilliant. But, if you are already sitting out the smartphone game during development, and if you have already delayed the release of your new mobile OS for other reasons, why not just wait another month or two to put the copy and paste functionality in there?

Overall, Windows Phone 7 seems quite capable and I think Microsoft should be commended. It may not threaten to surpass iOS or Android any time soon, but it is a solid mobile platform that should earn its fair share of the smartphone pie. I just think it was silly to launch such a major platform hobbled out of the gate by something as silly as copy and paste functionality.

It has it now, though. So…hooray! Any Windows Phone 7 users out there? I’m interested for feedback on the platform in general, and your initial thoughts on the copy and paste functionality. Was it worth the wait?

Tom Warren reports on the WinRumors blog that the copy/paste function in Windows Phone 7 is not easy to use–making it something that will just frustrate users and probably won’t get much use. Warren explains, “I had troubles getting the copy dialog box to surface on multiple occasions and it seems to respond randomly to various means of tapping on the screen. Copying isn’t always copying either, pictures do not copy despite being selectable. I tested copy and paste in native Windows Phone applications to ensure this wasn’t an experience broken by a third party. All-in-all copy and paste feels rushed and like an afterthought from Microsoft, it could be a lot better.”

Apple originally lacked copy and paste in iOS, and it already survived the user backlash and eventually implemented it. Microsoft–while it was sitting on the sideline–should have watched rival smartphone platforms and learned from their mistakes. Not including copy/paste at launch and claiming it will be added in an update is like introducing a new car without a seatbelts and letting users know that you plan to install them very soon.

Microsoft took a gamble by sitting on the smartphone sideline for so long while scrapping Windows Mobile and starting over from scratch to develop Windows Phone 7. The result is an innovative mobile OS that brings something new to the table rather than just offering yet another “me too” copycat version of Apple’s iPhone, or iOS.

However, even after the long wait there are parts of Windows Phone 7 that seem unpolished, or just not finished at all. Maybe copy/paste version 2 will come in some future update and make things better.

That said, the smartphone market is dominated by three players–Google Android, RIM BlackBerry, and Apple iOS, and Microsoft is swimming upstream to try and regain some of the market share it has lost as WIndows Mobile waned. What Microsoft needed was a smartphone manufacturer with the industry respect and production capacity to drive more significant sales.

Then, along came Nokia. A Nokia that has found itself floundering in the smartphone arena and looking for a winner as well. A Nokia now led by former Microsoft executive Steven Elop. A Nokia that could be “swayed” to embrace Windows Phone 7 for the right amount of cash–say $1 billion.

It remains to be seen whether the partnership will result in any success for either Microsoft or Nokia, but at least now Nokia has a fresh OS to focus on, and Microsoft has some production scale that might eventually enable it to compete on more even footing with the big boys. I don’t expect WIndows Phone 7 to dominate these rivals, but if Microsoft engineers and markets it right, there is no reason it can’t be a four-way race.

Although Microsoft has been falling behind smartphone platforms like iPhone and Android, and steadily losing market share, it still has a solid chunk of the smartphone market, and an audience of companies and business professionals that rely on Microsoft operating systems and applications and are anxiously anticipating the reincarnated mobile platform from Microsoft to provide the sort of seamless integration only it can provide.

Windows Phone 7 smartphones are not expected to be available until the fourth quarter of 2010–in time for the holiday shopping season. But, the reviews thus far based on what analysts and journalists were able to ascertain at the Mobile World Conference seem quite positive. Suggestions that Microsoft should just give up on its mobile platform, and rumors of its impending death seem premature, or exaggerated at best, at this point.

Essentially, Windows Phone 7 is not simply an incremental update to the waning Windows Mobile platform–Microsoft threw out the blueprint and started over to create a mobile operating system that matches style and functionality to go head to head with the iPhone and Android smartphones to reclaim market share and maybe even claw its way to the top of the smartphone heap.