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(Nasdaq: MSFT) has said its new software for smart phones, Windows Phone 7 series, is a "clean break" with the past. Now it’s clear just how clean that break is: The new phones, expected late this year, won’t run any applications written for older versions of Microsoft’s phone software.

, Microsoft executive Charlie Kindel, who handles contact with outside software developers, said that jettisoning support for older applications was necessary to make the new operating system as powerful and user-friendly as possible.

“For us, the cost of going from good to great is a clean break from the past. To enable the fantastic user experiences you’ve seen in the Windows Phone 7 Series demos so far we’ve had to break from the past,” Kindel wrote. “To deliver what developers expect in the developer platform we’ve had to change how phone apps were written. One result of this is previous Windows mobile applications will not run on Windows Phone 7 Series.

“To be clear, we will continue to work with our partners to deliver new devices based on Windows Mobile 6.5 and will support those products for many years to come, so it’s not as though one line ends as soon as the other begins,” he added.

The announcement is perhaps most disappointing to companies that have created their own software to run on Windows phones issued to their employees. The news also leaves software developers with a dilemma: they can write applications for Windows Mobile 6.5, which will soon be a dead end, or they can write for Windows Phone 7, which isn’t coming out until later this year.

Phone providers compete in part by providing support for as many applications as they can, and everyone is trying to catch up to Apple Inc.’s successful App Store, which has more than 100,000 applications. Microsoft is leaving behind tens of thousands of applications written for different versions of Windows Mobile that go back more than a decade.

Few of those applications are up to today’s standards. They’re also designed for phones that came with styluses for precise input. Windows Phone 7 Series is designed for touch screens that work well with fingers but don’t work with fine styluses.

“Different is often good. Especially when it’s different for good reasons. Windows Phone 7 Series is different because we reset everything we were doing to focus on end user experience. This extends directly to the developer platform,” Kindel explained.

“Developers, designers, and producers of applications, games, and content these days are demanding that we be different as well. Over the last year we’ve had face to face conversations with 100s of developers all over the world about what we should do with Windows Phone 7 Series. We heard they want:
1. to create truly compelling apps and games users will love.
2. to get more done with better tool productivity and platform capabilities.
3. greater opportunity; not just on the phone but across the PC, web, and TV/game console.
“Microsoft had to change its strategy to accommodate what developers have been asking for. Specifically developers told us to
• focus on the end user experience and take more responsibility for delivering integrated end user experiences.
• invest more deeply in the developer platform and developer experience.
• drive a standardized hardware platform creating a simpler ecosystem and a larger, consistent, opportunity.
“The Windows Phone 7 Series developer platform is as different as the new user experience. It’s fresh. It’s pure. And it’s powerful.
“We took the feedback we gathered from developers, looked at the full potential of Windows Phone 7 Series and landed on 3 basic goals for the platform we’re delivering;
1. Enable end users to be able to personalize their phone experience through a large library of innovative, compelling, games and applications.
2. Enable developers to profit.
3. Advance the ‘3 screen plus cloud’ vision
“The first one is pretty obvious: A key value proposition for Windows Phone is personal. We believe consumers will use games and applications to make their phone experience their own.
“(Did you notice we always talk about applications and games? A little factoid I heard today: According eMarketer, the number of people playing games on the phone has more than doubled in recent years;340M people will play games on the phone in 2010 up from 155M in 2007).
“But what do we mean by ‘profit’ in the second goal? When we talk with developers we hear them talk about three different “currencies”: making money, learning, and recognition. Some developers are in it for the money. They are either literally being paid to write code or they are writing code with the hope it will generate coin. “

Palm Inc. made a similar "clean break" last year, abandoning an operating system that was more than a decade old in favor of a completely new one. However, the new system is able to run applications written for the old one.

Kindel said Microsoft still will support Windows Mobile 6.5 "for years to come," and expects some new devices with that software will come out.