Conflicting information on the Apollo update
Having read the Verge and other news sources regarding the Windows Phone 8 (Apollo) update, there are two different stories being told.
Nokia's Story Driving costs down
Stephen Elop has been beating the drum that Nokia's primary goal with Windows Phone is to drive the cost down. He states that Nokia needs to move Windows Phone down to compete with low cost Android phones and that there is room for overlap with their Asha and the Lumia line of phones. This would mean phones in the range of $80 - $120 range.
Microsoft's unofficial story
No devices will be receiving the Windows Phone 8 Apollo update.
If Nokia is driving costs of their Lumia Windows Phones down to the $100 range and a bunch of sites are saying that Windows Phone 7 devices will not be upgradeable to Apollo, how could those low-end devices run Windows Phone 8? And if Windows Phone 8 can run on this hardware, why won't we see updates to current Windows Phones?
A few explanations
1 - Play on words - Microsoft may not be handling the updates
In order to remain focused and manage resources, Microsoft may be putting their full effort into launching Windows Phone 8 on next gen hardware. With their resources spread thin it could delay Windows Phone 8 to attempt managing a rolling update as they did with Mango. In this situation, Microsoft may make it possible for OEM's to develop the update for their previous devices. Nokia may be the prime candidate here. They would be able to update their current line of phones to Apollo to keep their new customers happy (and loyal). But if MS were to be asked about the update prospects for current Windows Phones, the answer (until it is officially announced) would be no.
2 - New hardware interface requirements
Another possibility is that Windows Phone 8 would not be able to run on current Windows Phone's because of new hardware interface requirements for the OS. This could mean something like a new button layout or a touch screen that surpasses what is currently available on Windows Phone. By having requirements such as this, Windows Phone 8 would not be able to run on current phones without a reduced usability. Since this may not influence cost of development, Nokia could continue their race to lower their costs of handsets but previous devices would not support the new OS.
I'm not sure I agree that they are heading in this direction. If new interface requirements are implmented this would break the interface for current Windows Phone Apps that rely on this setup. Because Windows Phone Apps have been developed on Windows Phone 7 hardware, they would Apollo devices would have to have similar hardware requirements to run older Apps. The perfect example is the back button or similar touch screen sensitivity.
3 - New hardware specification requirements
Given that Apollo is a tweaked version of Windows RT, the most reasonable scenario appears to be that it may have higher hardware requirements than Windows Phone 7. Windows Phone 8 may require a Snapdragon S4 or Tegra 3 based SOC and 1GB of ram. If this is the case, we will see some really amazing hardware but none of the devices on the market will get the upgrade.
If situations 2 or 3 do come to fruition, I can only imagine that we will see the Windows Phone OS be fragmented into the Windows Phone 7 and Windows Phone 8 devices. Each OS will be compatible with the older Apps and possibly a refreshed API. Nokia would then be able to streamline WP7 as the low-end OS to replace Symbian and S40. I kind of hope this is the way things will work out. This is not fragmentation by abandonment, like other OS's, but deliberate and controlled fragmentation. It could make for very reasonable, excellent performing low end devices and impressive high end devices. We'll find out soon.