In last week’s mobile market wrap-up, I referenced a rumor that Windows Phone 7 is launching next month. I’ll admit I was impressed at the speed with which Microsoft completed the development of Windows Phone 7 and that they hit their end of year release target, which I thought was an impossible goal they set for themselves earlier this year. Well, last week the caveats started to emerge. Apparently, in a trade-off for schedule, Windows Phone 7 will be available on GSM phones only, which eliminates the largest carrier in the US, Verizon, from launching the device until mid-2011 at the earliest. While the engineering side of my brain understands the trade-off, the marketing side sees one word – FAIL! After seeing how the iPhone’s lock to AT&T’s network has limited its market share in the US, I am surprised that Microsoft would take this shortcut. I guess if you had to cut one of the two technologies, CDMA would be the first to go since it is not as prevalent worldwide as GSM. However, for a project of such importance to Microsoft, I would have figured supporting both technologies would have been a top priority. I have a feeling that Microsoft will regret this trade-off as it will allow Android to become even more entrenched as the smartphone OS of choice on Verizon.

In other handset news, Nokia and BlackBerry maker RIM, two manufacturers that are falling out of favor with investors, made major announcements last week. At their self-hosted Nokia World Show, Nokia touted that they are still the industry leader with 260,000 smartphone activations a day (compared to Android’s 200,000 and iOS’ 80,000). Unfortunately, perception is reality, and while Nokia still has the lead, they are suffering from a perception problem that John Biggs at MobileCrunch so eloquently describes. Along those same lines, RIM announced earnings last week. While the results blew past analyst expectations and a bright future was painted by management, the reality remains that Android continues to rapidly close the gap on RIM’s dominance in North America according to the latest ComScore stats. Both RIM and Nokia had better not be content to rest on their laurels because as they say in the mutual fund world – “past performance is not an indication of future performance.” I’m not surprised that Nokia and RIM are doing well when you look at past and current stats. When you look at trends, though, both Nokia and RIM should be concerned, and I mean very concerned.

As usual, I wanted to wrap up this week on a fun note. Motorola is launching a Star Wars themed R2-D2 Droid handset later this year on Verizon. While the hardware and wallpapers for the device look cool, they are not nearly as cool as this prototype Star Trek Communicator themed Nokia device. It’s quite a shame that only 14 were made back in 2008. I’m not even a Star Trek fan, and I found this concept prototype just too cool. Definitely worth spending the 9 minutes to watch the video.