Microsoft’s new smartphone operating system is set to hit retail shelves this fall, with a European launch hinted at October. But will the Redmond-based firm’s latest bid to regain its place in a tightly contested smartphone market have the desired impact, or will it add to a growing list of the software giant’s recent failures?

Ask anyone with the slightest insight into the mobile phone industry about Microsoft’s prospects for its much-touted Windows Phone 7 operating system and they will typically come up with the same answer: a failure in the making.

This is the first and perhaps most towering of obstacles Microsoft will have to topple if it is to even entertain the idea of gaining back some desperately needed mindshare and market share for the troubled mobile platform.

To the average person, Windows does not even cross their mind anymore when ‘smartphone’ and ‘operating system’ are mentioned in the same breath. Instead, iPhone and Android, two new platforms that haven’t existed even half as long as Microsoft has been a part the mobile market, are now rolling off everyone’s tongues.

Windows Mobile, for all intents and purposes, is a prehistoric dinosaur that is extinct from the average consumers’ minds.

Windows Phone 7 is a chance for Microsoft to start from ground zero and in all likelihood, their last chance to claw back into contention with the big players.

But is it all doom and gloom for Microsoft? It seems rather cruel and shortsighted that people are so willing to write off the software giant before it has even released its new smartphone operating system. Or is it?

Microsoft’s recent OS efforts, the case in point being Vista, have been, well disastrous to say the least. Though Windows 7 redeemed it somewhat, it did so mostly on the back of some aggressive marketing. Microsoft’s relentless drive to come up with an answer to Apple’s iPad epitomises the company as a whole: lost and desperate. And need we be reminded of the ‘Kin’ debacle?

If anything is clear from these failures, it is that Microsoft is becoming increasingly incapable of innovative, forward-thinking ideas. Instead of being proactive, it seems capable only of being reactive, chasing after the successes of other companies.

For years it had the chance to dominate a smartphone market which had been practically handed to it on a silver platter, but let complacency and success in the desktop market get the upper-hand and is now paying the price.

Windows Phone 7 is a do-or-die endeavour for the company, one that it cannot fail in and Microsoft head-honcho Steve Ballmer knows this better than anyone.

When asked what would happen if Windows Phone 7 was a failure at Microsoft’s annual presentation to analysts, Ballmer could only respond: "It won't be.”

The typically bullish CEO was uncharacteristically realistic about the company’s uphill struggle to make up for lost ground in the mobile market.

He said: "It's probably fair to say we've got a lot of work to do.

"It isn't all going to happen overnight."

No, it’s not. But fortunately for Microsoft, it has found some much needed allies to at least try.

HTC, Samsung, LG, Dell and Asus are all confirmed to be working on Windows Phone 7 smartphones slated for release later this year.

The names HTC and Samsung may cause some to doubt whether they are wholeheartedly onboard the Windows Phone revolution, given their success with the Android platform, and the fact that Samsung has its own Bada OS to promote, but there are always two sides to a coin.

HTC and Samsung actually have a reputation to protect, which they are not going to squander with something they think is destined to fail. If there is a glimmer of hope for Microsoft’s operating system, they are going to make sure they are first in line to reap the benefits.

Truth be told, despite all these ramblings about Microsoft’s numerous failures, I actually think it has made a genuine attempt at creating something worthy of competing in a world where iPhones and Androids rule.

Instead of a desperate, last-ditch attempt at reviving Windows Mobile, it has created an operating system from scratch and came up with something that looks authentically new, and in my opinion, looks good, too.

The simple, minimalist look of the user-interface is not a cut-and-paste job of the iPhone OS as you’d expect and is immediately pleasing to the eye with large typography and vanilla icons that show that less really is more.

While the integration with social networking services, Xbox Live and Zune HD will play a big part in enticing younger, more casual users, it is the tight integration with all Microsoft’s best Office applications, complete with Exchange support, that is sure to strike a chord with business users and help it compete against the behemoth that is BlackBerry.

To wax lyrical about all of Windows Phone 7’s wonders is beyond the scope of this article. But what I’ve seen of it so far has impressed me enough to say that Microsoft may yet make a modest comeback, provided it plays its cards right.

For starter, it needs to use the Windows Mobile’s fiasco to its advantage. The only way Windows Phone 7 can rise above the failures of Windows Mobile is by reinventing itself with a totally new operating system and it would seem Microsoft is finally getting the message.

However, a newer, snazzier look isn’t going to be enough to make it a worthy alternative to the smartphone leaders. To really stand out, it needs to offer something that users won’t find on other platforms, or at least not as well implemented.

It simply will not suffice to just set up app store and expect users to patiently wait for the apps to come. It has to be populated with hundreds, if not thousands of killer apps from the outset and a damn good app store to go with it.

Right now, Microsoft limits the number of apps per developer can submit to five, which can be both good and bad. It’s good because it should, in theory, make developers work on five really good apps instead of 50 lame ones. It’s bad because numbers do matter to some people.

The iPhone app store has well over 225,000 apps and God knows how many more being added each day. The Android Market has already crossed the 100,000 apps milestone.

Microsoft’s app store, the Marketplace, will virtually start from scratch. The reason being, Windows Mobile 6.5 apps will not be compatible with Windows Phone 7. So there is a lot of work to be done and not much time to do it.

Something also needs to be done about the striking omission of any sort of multitasking for third-party apps. While the reason for this is unknown, I hope for Microsoft’s sake it is simply a case of the APIs required to allow multitasking for third-party apps not yet being ready. To keep it out altogether could spell disaster for the operating system now that even the iPhone has basic multitasking.

Last but certainly not the least, there’s the issue of marketing. There are billions of dollars in Microsoft’s coffers. And Windows Phone 7 could badly use them for a big promotional push.

And this is not just hyperbole. A significant part of the iPhone’s success has come from the simple but clever advertising that highlighted just what the device is good at. Microsoft needs to practically buy out the airwaves when Windows Phone 7 launches and make sure that even average Joes understand why this OS kicks its competition in the rear.

A strong marketing campaign, a great line-up of handsets and great applications - these are the most basic and yet most important things Microsoft needs to get right. Get them wrong and Windows Phone 7 will suffer a horrific and premature death.