Review: It's strike 3 for Microsoft's Windows Phone

Three strikes and you're out! The third version of Windows Phone -- Windows Phone 8 -- finally adds basic compatibility with corporate Exchange server security settings, but not much else. Despite an initially enticing look, Windows Phone's user interface remains a frustrating blend of simplistic and difficult, with occasional touches of brilliance that render the poor usability even more frustrating.

You really have to wonder what the Windows Phone team does most of the year, given how little significant change there has been from 2010's Windows Phone 7. Certainly, it's not making a serious effort to compete with Apple's iPhone 5 or the leading crop of Android smartphones such as the Samsung Galaxy S III, both of which are years ahead of Windows Phone. A year ago, I compared Windows 7.5 to Android 2.3 "Gingerbread," which was significantly lagging iOS 5 at the time, and found that Windows Phone 7.5 wasn't even as good as Android 2.3. A year later, Android 4.1 "Jelly Bean" is out and giving iOS 6 a run for its money, but Windows Phone 8 has barely moved.

[ See how the Nokia Lumia 800 series and HTC 8X compare to the iPhone and leading Android smartphones. | Learn how Windows Phone 8's security capabilities compare to iOS and Android. | Keep up on key mobile developments and insights with the Mobilize newsletter. ]

What's new in Windows Phone 8? As noted, the biggest improvement for users is support for on-device encryption and some Exchange ActiveSync (EAS) policies, both typically required for corporate usage. The browser is now Internet Explorer 10, which is a little more HTML5-savvy than the previous IE9. The home screen (what Microsoft calls the Start screen) tiles now have two additional sizes: a quarter-size tile so that you can cram more tiles and thus scroll less to find them, and a double-wide tile for live tiles that display a lot of information that's otherwise too hard to read. (Tap and hold a tile until an arrow icon appears at its lower-right corner; tap it to toggle through the three sizes.) The lock screen now displays alerts, like iOS and Android, and the Kid's Corner mode lets you create a custom workspace for others to use, typically with a limited set of apps.pe

Windows Phone 8 also integrates several Microsoft services -- the Xbox Music and Xbox Video stores, as well as SkyDrive cloud storage, Skype messaging system, and Microsoft user accounts -- that Windows 8 supports. The new Wallet app lets you collect loyalty and other electronic cards, similar to the Passbook service in Apple's iOS 6. Hardware support is improved: Windows Phone 8 devices can now use SD cards and have screens with 15:9 or 16:9 ratios. Near-field communication (NFC) is supported by the OS, so hardware makers can now make phones that support NFC-enabled mobile payments or data sharing (like Android and BlackBerry OS).

Hardware: HTC 8X versus Nokia Lumia 800
I've been testing Windows Phone 8 on two of the three smartphones in the United States that support it: the HTC Windows Phone 8X and the Nokia Lumia 800 series. (The Nokia Lumia 920, whch was unavailable for testing, also runs Windows Phone 8.) Before I get into the details of Windows Phone 8 itself, let me compare the two devices. The two smartphones are fairly similar, as Microsoft gives Windows Phone makers very little leeway to differentiate. But the Lumia 800 is definitely a lower-end device, whereas the HTC 8X aims higher.

The HTC 8X is thin, weighs 4.6 ounces, and has a contoured, colored, easy-grip case, whereas the Lumia 800 is thick, weighs 5.1 ounces, and has a blockier all-black case. The HTC 8X is much more comfortable to hold. Both have 4.3-inch screens, but the HTC 8X has a higher-resolution display (342 pixels per inch versus the Lumia 800's 217 ppi). Both use the 1.5GHz Qualcomm Snapdragon CPU. Both have an 8-megapixel rear camera with LED flash. The HTC 8X has a 2.1-megapixel, 1080p front camera whereas the Lumia 800 has just a 1.2-megapixel, 720p front camera.

The HTC 8X's screen is crisp, and the color balance very nice when playing back movies. Its speakers also produced clean, loud, well-balanced audio, despite their tiny size. The Lumia 800's screen is not as bright, resulting in muddier video, and its speakers are quieter and produce flatter sound than the HTC 8X.

The HTC 8X has either 8GB or 16GB of storage, and no expansion capability, whereas the Lumia 800 has just 8GB of internal storage but can accept an SD card with up to 32GB of additional storage. Both support 5GHz and 2.4GHz Wi-Fi networks. But neither has video-out capabilities as iPhones and many Android smartphones do. Battery life for both is adequate, with a full day's use per charge. The HTC 8X's battery rundown is similar to Android: It lasts about 24 hours when idle, like most Android smartphones, whereas the Lumia 800 uses little energy when idle, providing several days of power, like an iPhone.

Lumia 800-series models are available for AT&T (as the Lumia 820), T-Mobile (as the 810), and Verizon Wireless (as the 822), and the HTC 8X models are available for AT&T, T-Mobile, and Verizon. Keep in mind that T-Mobile has generally poor coverage; both of my test devices were the T-Mobile models, and I frequently couldn't get data service in either San Francisco or the Central Coast region of California for the week I used them. T-Mobile also lacks LTE service, so the Lumia 810 and the T-Mobile version of the HTC 8X don't have LTE-capable radios.

Although the Lumia 800 series skimps on the hardware side, it does come with a raft of useful Nokia apps -- including Transit for mass-transit routing, Creative Studio for enhancing photos, Cinemagraph for animating photos, Panorama for taking auto-stitched panoramic photos (a feature available in several iOS 6 and Android 4.x smartphones), Transfer My Data for Bluetooth copying of contacts from other devices, and the beta Drive+ for GPS navigation. The HTC 8X has a few basic extras of its own, including a unit converter, flashlight, and photo enhancer.

At AT&T and Verizon, the HTC 8X costs $550 for the 16GB model, while the Lumia 800 series costs $400; a two-year contract drops $350 from those prices. At T-Mobile, the list prices are $50 more, but the discount for a two-year contract also increases by $50. Of the two models I tested, the HTC 8X is the more appealing smartphone. You might consider the $450 Nokia Lumia 920 instead; it has beefier hardware as well as Nokia's special apps, but it's also both larger and heavier than the 8X and Lumia 800 series.