From the first time I got a good look at Windows Phone 7, it had all the earmarks of the end of the line for Microsoft's mobile aspirations. After spending an hour with a beta version of Windows Phone 7 in July along with a room full of developers, I was shocked (as were they) at how much was missing from the OS and thus how incapable it was -- there were no signs of copy and paste, multitasking, devicewide search, or HTML5.

Now that Windows Phone 7 is shipping, the truth is even worse. I spent several days this wek reviewing a Windows Phone 7 device; in the process, I realized Microsoft made even more boneheaded decisions than I thought possible. You can get the detailed analysis in my deathmatch comparison between Windows Phone 7 and the iPhone 4, but Microsoft's made several additional and unthinkable lapses.

What's really sad, however, is that it didn't have to be that way. Windows Phone 7 does have a strong user interface -- much better than I originally thought (I take back that earlier criticism) -- that could still serve as the basis of a successful mobile platform if Microsoft moves very quickly.

What's wrong with Windows Phone 7 is partly technological and partly strategic, so moving from the bad 1.0 version to a strong 1.1 version by this spring (any later is pointless) would be no mean feat. Let me explain.

Technology miss: Windows Phone 7 is highly insecure

Windows Mobile was second only to the BlackBerry when it came to being secure. Even the military could trust it. By contrast, Windows Phone 7 is less secure than most other mobile OSes, with even fewer security capabilities than Google's Android OS. The big three missteps are lack of on-device encryption, lack of support for complex-password policies, and lack of VPN. These are basic requirements of any business to allow access to their corporate email and networks.

I really want to know how much security Microsoft will have to relax on its own network so that its employees, who are all being issued Windows Phone 7 devices, will be able to access it.

The result is that Apple's iPhone -- which started as a consumer device -- is now the second most secure device after the BlackBerry, and it's gaining trust at financial institutions, hospitals, and other regulated businesses, while Windows Phone 7 can't even be considered. How stupid was that decision?

Full story:Windows Phone 7: Why It's a Disaster for Microsoft