Updates are in the works for Microsoft’s Windows Phone 7 platform that may make it more enticing to mobile developers, according to Tom Warren at WinRumors.

Sources tell Warren that the update, which is expected to be announced at the Mobile World Congress event in February, will offer developers more freedom with their apps by opening up greater multitasking support, in-app downloads and better customization for users. The news is buoyed by a Business Insider report from yesterday that also pointed to a February update that would relax app restrictions,  based on the word of a mobile app company head.

Microsoft was notoriously restrictive with the initial apps that hit Windows Phone 7. In conversations with developers, they mentioned that Microsoft paid extremely close attention to even minor aspects of their apps — like the exact pixel width of their app’s margins. Clearly, Microsoft wanted to convey that its platform’s apps were polished and iPhone-like from the start. Now that Windows Phone 7 is beyond the launch hump, Microsoft can afford to give developers more flexibility.

Previous reports also pointed to Microsoft announcing a smaller Windows Phone 7 update in January at the Consumer Electronics Show. That update will apparently bring copy and paste functionality, as well as support for CDMA networks like Verizon and Sprint (which was delayed initially).

It’s unclear how these two updates will coexist. They could potentially be one and the same — with Microsoft unveiling some aspects in January, and more in February. But I think it’s more likely that we’ll see the first update within the first few months of 2011, and the bigger update in the following months.

Microsoft is also expected to announce a Silverlight update for Windows Phone 7 at the Mobile World Congress, and it’s apparently working on overhauling its mobile version of Internet Explorer.

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