Bad news for those who anticipated the release of Windows Mobile 7. It appears that the next version of Microsoft’s mobile operating system won’t see the light of day until the second half of next year, despite being initially slated for early 2009. The company did not comment on the reason for the delay, but many speculate the obvious: they want to develop it further to compete with Google Android and the Apple iPhone.

Microsoft does have other plans in the meantime to keep the current iteration of Windows Mobile fresh. Particularly, before the end of the year they plan to release an improved browser that brings the rendering engine of “Internet Explorer 6” onto Windows Mobile, adding support Flash and Ajax content and applications.

The delay is a significant blow for Microsoft amid stepped-up competition from Google, Apple, and RIM. Then again, Windows Mobile has made big inroads into the smartphone market already and Microsoft does have the crucial advantage in corporate markets of owning Exchange, so a delay might not be that critical for Windows Mobile 7 – but hopefully it’ll help Microsoft get it right first time.