They aren't exaggerating.

Analysts say Microsoft's success with Windows Phone 7 (WP7) is as well as to the overall future prowess of the software giant, which is best known for its desktop operating systems and office productivity software. Analysts regard the WP7 announcement as important to the entire company.

"On a scale of 1 to 10, this announcement is an 11" to both in mobile and Microsoft overall, said Ramon Llamas, an IDC analyst. "This is where the rubber meets the road. It's huge."

Microsoft must prove it has overcome its dismal performance with the current Windows Mobile OS and the that launched in the spring but was killed two months later.

More daunting is how well WP7 can distinguish itself with consumers against 's and an array of Android devices, as well as the persistence of Research in Motion's BlackBerry with the corporate crowd.