After releasing a ground-up version of its operating system for mobiles called Windows Phone 7 in 2010, Microsoft is attempting a second time to capture the turf it lost to the iPhone and Android devices.

After showcasing its updated version of WP7 under the new moniker "Mango" in May, Microsoft has officially signed off on the release to manufacturing build of Mango, an action which the Redmond, Wash., giant termed as "important milestone."

The first phone to grace the updated Windows Phone 7.5, or Mango update, is Windows Phone ISI12T, manufactured by Fujitsu Toshiba Mobile Communications. It will be launched in September.

Coincidentally, rumors swirling the Web state that Apple will launch its next rendition of the iPhone, the iPhone 5, in September as well.

Windows Phone ISI12T, which will be introduced in Japan, is touted by the company to be the first waterproof and dust-proof device. The phone sports a 3.7-inch WVGA LCD display and offers a whopping 13.2 MP camera. The phone weighs about 4 oz. and has 32GB memory on board. The phone is powered by a Qualcomm MSM8655 chipset, which is also found in the HTC Thunderbolt.

Earlier in the month it was reported that HTC would be releasing a Mango-based phone called HTC Eternity. The phone is reported to have a 4.7-inch WVGA Super LCD display. It is powered by a single-core 1.5GHz MSM 8255 processor with 512MB RAM and offers 16GB internal memory, and weighs about 5.9 oz. and is about 0.38-inch thick.

The phone also comes equipped with an 8MP rear-facing camera with dual-LED flash. The camera offers 720p video capture capability. HTC Eternity also features a 1.3MP front-facing camera. It also offers Wi-Fi, Bluetooth, GPS and DLNA support and has a 1,650mAh battery.

Microsoft had confirmed Acer, Fujitsu and ZTE Corp. as key OEM partners to manufacture Mango devices.

The new Mango update brings in 500 new features and is crafted to mate the Smartphone experience "around communications, apps and the Internet," according to a release. Mango assorts apps and content around subject specific hubs, contextualizing content rather than displaying apps independently.

Also, Mango has been designed to integrate native phone functions with Microsoft's cloud offerings like Xbox Live, Microsoft Office 365 and SkyDrive services.

It also adds intuitive ability to Mango as the OS stitches Facebook, Outlook, LinkedIn, Windows Messenger and Twitter together. If a user wants to send a message to someone, Mango gauges which is the best format to deliver the message based on the availability of the person on specific social site.

As Microsoft gears for the launch of its Mango devices it has key challenges ahead of it as Google is also expected to launch the next version of its Android OS, Ice Cream Sandwich, with Nexus 4G by Thanksgiving. Thus it will face both Android and iOS 5 phones that already have a head start.