Microsoft has announced that current owners of Windows phones like the Nokia Lumia 900 will not be allowed to upgrade to Windows 8. Instead, they will be able to download Windows 7.8, which includes some but not all Windows 8 features.

Windows 7.8, for instance, will have a start screen similar to Windows 8 with smaller touchscreen tiles. The phones, however, will not be equipped with Near Field Communications, the technology required for mobile payments.

Earlier models of Windows phones do not have NFC chips and could not make use of NFC software.

The announcement could spell doom for the Nokia Lumia 900, the much hyped Windows phone that has seen sluggish sales in both Europe and the U.S. The Lumia 900 does not support the next-generation hardware and multi-core processors designed to run Windows 8.

Windows 8 also features a new development code, which will open up the market for manufacturers who want to build smartphones that will run the new platform. Windows 8 will support both dual and quad-core support and SD card expansion as well as NFC technology.

Stephen Elop of Nokia tried to downplay the fact that the Lumia 900 would be shut out of Windows 8. “We have a lot of exciting capabilities coming as part of a pattern of updates for the existing Lumia products,” Elop stated in an e-mail. “This includes some of the most significant visual elements of WP8 – for example, the new start screen. As we have always been, Nokia is committed to delivering a long term experience to any purchasers of our products.”

In addition to adversely affecting Nokia, the disappointment over the lack of a Windows 8 upgrade may also adversely affect AT&T. The telecommunications giant has thrown its weight behind the Lumia 900, including delivering a strong endorsement of the phone from CEO Randall Stephenson last May.

Amazon.com recently dropped the sale price of the Lumia 900 to $10 for qualified AT&T subscribers who were eligible for upgrades. People who switched over to AT&T from another carrier at the same time paid $40 with a two-year contract.

The Amazon.com price for the Lumia 900 is currently back up to $49.99.

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