Windows Phone 8.1 is the third generation Microsoft's Windows Phone mobile OS and succeeds Windows Phone 8.

On Feb. 10, the OS was on preview to developers and is slated for launch at Microsoft’s Build Developer Conference in San Francisco, California to be held from April 2-4, 2014.

First of all Windows Phone 8 phones can be upgraded to Windows Phone 8.1. The OS was initially codenamed ‘Windows Phone Blue.’ The OS would be a series of updates to the current Microsoft OS.

Rather than wait to bring new features to Windows Phone 8, Microsoft chose to add updates and new features to the existing mobile OS. The updates added “DataSense for non-Verizon devices, support for quad-core processors, 1080p high-definition screens of up to six inches, the addition of a "Driving Mode," and extra rows of live tiles for larger "phablet" devices.”

After the formal announcement in April, Windows Phone hardware is slated to arrive in June.
Windows phone devices including the end of the line Lumia 520 will receive the 8.1 update, according to wpcentral.com.

The 8.1 is believed to be a significant revamp to the Windows mobile OS, say analysts. After a series of General Distribution Releases or GDR updates, the 8.1 OS will give way to the ‘Threshold’ release in 2015, which would be Windows Phone 8.2. or possibly even Windows 9.

The touted feature on Windows 8.1 will be Cortana and photos and videos of it have already leaked. Cortana is to Microsoft as what Siri might be to the iPhone or Google Now to Android. The video on wpcentral.com is the first time Cortana has been showed to the public.

Source; Youtube – Cortana

Source: YouTube – Action Center in Windows Phone 8.1

Here are some potential new features of Windows Phone 8.1 as listed by wpcentral.

“Action Center (hands on video)
• Notification center – Alerts, non-Toast notifications, update history, more
• Quick-access to customized actions, including Wi-Fi, Bluetooth, Plane mode, etc.
Apps + Store
• Apps can capture audio/video from themselves; be limited for copyright concerns
• App and Game data stored on SD cards
• Apps on SD Cards are only allowed from ONE originating phone. If it detects that apps from another phone are installed on the SD Card, then it will ask to delete those first
• App Suggestions by location
• Backup of App + Game data to OneDrive (if developer enabled)
• Facebook app comes with OS, updates independently, hooks into OS
• Filter through installed apps by usage/install date
• Manual Update checks
• Option to update store apps automatically
• Option to update store apps when only on Wi-Fi
• Single sign-in for apps (like on Windows 8) with Microsoft Account; sign in will persist across devices + apps with permissions prompt
Calendar
• Google calendar support, with multiple calendars
• Weather in calendar
• Week view in calendar
Camera
• Burst camera mode, including auto-deletion of bursts
• New layout
Bing
• Bing smart search (similar search system as Windows 8.1)
• Podcast app powered by Bing, full featured
Browser
• Internet Explorer 11
• IE 11 to save and remember your password for websites
• JavaScript and HTML for app development
• Upload files through Internet Explorer 11
• Tabs now show up individually in multi-task window
• WebGL and Normal mapping support
• YouTube Player including HTML5 video support
Developer
• Background tasks: Bluetooth signal strength, Chat message notification, Device connection change, Device use trigger, Gatt characteristic notification, Location, Push notification, Rfcomm connection, System event, Timer
• XAP replaced by APPX
• Audio/video transcoding that’s hardware accelerated
• New dev tools including: SemanticZoom, DatePicker, TimePicker
• Actionable notifications for apps
• Silent/ghost notifications for apps
Email
• Encrypted and signed e-mail support
• New Email sync options with accordance to usage patterns (i.e. If you get a lot of mail on particular days and if you don’t check mail every day).
• Option to always download emails and pictures within them
Enterprise and Office
• Enterprise enrolled phones can have their passwords changed and remotely locked
• Password protected Office document support
• Office Lens support for scanning documents with camera, import into Office with OCR
• Rebranding of SkyDrive to OneDrive
• VPN support built in
• S/MIME to sign and encrypt email
• Access to corporate resources behind the firewall with app aware
• Auto-triggered VPN
• Certificate management to enroll, update and revoke certificates for user authentication
• Enhanced MDM policies to lock down functionality on the phone for more enterprise control, in addition to richer application management such as allowing or denying the installing of certain apps.
• Enterprise Wi-Fi support with EAP-TLS
General User Experience changes
• Start screen backgrounds
• Back button no longer closes apps, instead it suspends them
• Double-Tap to unlock your phone (Feature from Lumia devices on Amber Update and newer)
• Double Tap to Power Off
• Favorite photos by tapping a heart icon
• File picker
• Kid's Corner - Password won't be displayed (bug fix)
• Live Tiles – mark as red by swiping from the left over the Tile
• Live Tiles – Three column support (maybe)
• Navigation bar for phones without physical keys on the front
• Notification if charger isn’t of adequate power
• Quiet Hours - Disable notifications during pre-selected timeframe
• Screenshot button combination is now Power + Volume Up
• Search button will be the new way to open Speech (aka ‘Cortana’)
• Separate volume controls for ringtones/notifications and music/media
• Set default Voice Navigation app for the OS
• Swipe down to close apps in multitasking view
• Voice Narrator for Accessibility
Keyboard
• General keyboard enhancements, show emoji when typing
• Swipe keyboard option - “Write, when I swipe through letters”.
Media
• Audio/video transcoding, Hardware accelerated
• Media editing: audio and video; Audio effects, video effects; Slow motion video
• Xbox Music and Xbox Video as standalone apps instead of the Music + Video Hub (allowing more updates to be pushed)
Messaging
• Change default SMS app. You can also change which SMS app will show notifications.
• Mute Thread - Optionally silence text threads, no longer receive notifications or Live Tile updates
Phone + Contacts
• Contact list sorting of those with phone numbers
• Call duration (press and hold reveals a "details" menu in call history)
• In-call speech commands. You’ll be able to say “Call XXXXXX”.
• Inner Circle of contacts. Up to 40 contacts can be in the inner circle.
• Operators can also install certain applications once a SIM card is detected
Sense
• Battery Power Sense – App to monitor which apps draw the most power
• Battery Saver (under Battery Sense) will have an app exclusion list
• Data Sense – Operators can now control Data Sense limits remotely
• Wi-Fi Sense – Sharing secured WI-Fi Networks with contacts if they have Wi-Fi Sense. They don’t get to see the shared password though
• Wi-Fi can auto re-enable after a set duration of time
• Wi-Fi Direct
System
• Bluetooth 4.0 LE
• Chkdsk for SD cards to ensure card health
• Geofence monitoring support. Geofence is a boundary around a place of interest to you. Location services can monitor geofences to tell your apps when you’re entering and leaving them. This would be really good for IFTTT
• Miracast, PlayTo, mirror and project via wireless display or USB-out
• Mouse and keyboard support (HID)
• Stereoscopic 3D support
• The phone will have to update to the latest version before you can restore it to factory settings
• Trusted app list for NFC that will remove the need for asking whether you want to open a particular app
• Virtual SmartCard support
• Wallet supports tickets and membership cards
• Windows Phone 8.1 apps won't run on 8.0 devices until they upgrade”