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1) Whatever WP7 hardware you pick is highly optimsed and the performance you get is significantly better than what merely looking at the tech specs would suggest. So while there are technically better devices you really dont feel you are missing anything performance wise. Case in point, the 2nd gen devices with their FFC's seem to be handling video calling better than the single core androids did, and the better GPU seems to make the already smooth OS smoother still. So you get better performanc with a newer device but 1st gen devices still feel snappy and work with all applications.
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Apple does the same thing. Only issue is, not all features make it back to the older devices based purely on performance alone. Others, for differenciation, etc.
But one other thing to note...
Apple has been either on the bleeding edge or on the upper cut on SoC, too. Their A4 was already fast for it's time, A5 was unmatched when it was released, and still has the fastest mobile GPU. The samsung SoCs before that were no slouches, either (SGX535 GPU). MS, on the other hand, launched on the Qualcomm snapdragon S1 chips, which were already outperformed by the S2 chips out the door, and were not even competitive in any sense vs the S3 chips that followed soon after (S2/S3 made on a smaller fab process vs S1). Only now, we see S2 chips, which are hopelesly outmatched by current gen chips. Yeah, MS doesn't need much processing power, but app resume/load times are still bad, web browsing certainly could be faster, and all S1/S2/S3 designs are still limited badly by the fact that the second memory channel is off package, so it's almost never implemented, hanpering it's performance even further (not even going to mention the memory bandwidth benefits of Tile Rendering in PowerVR GPUs - which is a technology MS developed in Tailsman, lol).
In the short run, I can see why MS isn't pushing the edge of performance, mainly due to limitations of current SoC. Hopefully S4 with a new arch and fab process alltogether will come soon, and allow the next push of WP7 devices to have good HW to back them up. (ST-E NovaThor has it's share of flaws, too... more so than Snapdragon IMO)
More hopefully, however, MS and it's partners will make a phone and software ecosystem that is worthy of a massive "Droid-esque" marketing push that put Android seriously on the map.