At its Build conference in Moscone Center today, Microsoft took the wraps off its next iteration of Windows Phone. Version 8.1 is coming shipped with plenty of much-needed features.

Among the features is a new Lock Screen that’s customizable, “highly interactive and unique”. There’s also an “Action Center” which is essentially Microsoft’s version of the drop down notification center/drawer and Control Center found in Android and iOS. From here you can respond to notifications as well as control various settings for your device.

8.1 also has the ability for the user to change layout and design of the home screen. You can have three columns of live tiles, and have a wider variety of sizes and layouts. But perhaps the biggest news on the home screen front is that you can now set wallpapers. Unlike most OSes, it doesn’t fill in the background, it fills in the Live Tiles, keeping the black dividing gaps between them.

Among the biggest changes was Microsoft’s Bing-powered digital assistant, Cortana. Windows Phone’s answer to Google Now and Siri is capable of doing the usual: setting reminders, sending texts, telling you information and  a whole variety of other tasks. Like Google Now, it can keep you up to date with your flights (for instance) by scanning your email. Perhaps is most exciting feature is its name: Cortana. It takes me back 12 years to when I first played Halo on XBox. They could not have chosen a better personality for the job.

Cortana also lets you set an “Inner Circle” of contacts, and set “Quiet Hours” which is essentially a “Do Not Disturb” for Windows Phone.

She (or it) also has the ability to set people-based reminders. It can remind you about specific things. At the show, they demo’d a reminder to ask a contact about a puppy, or cook dinner for a partner. It works alongside other apps, like Skype, making a Skype call an actionable task through the assistant. It’s got a one-up on Siri here. Siri let’s you open apps, but – as of yet – you can’t action anything directly from Siri unless it’s a stock app. Cortana can add shows to your Hulu Plus queue, or check a specific friend’s Facebook feed.

If the demo is anything to go by, Cortana is going to be right up their with the smartest digital assistants.

Part of the update software announcement included a new Windows Phone app store. It’s been redesigned to increase engagement, hopefully get more developers on board.

Wi-Fi Sense lets you detect nearby wireless networks and suggest the “great” ones in your area. It can automatically connect, accept terms of use and sign you in.

Enhancements to the keyboard have been made. There’s a new “Swype” like feature which lets users drag from letter to letter and type really quickly.

All in all, it looks like a much needed update to Windows Phone, which hasn’t taken off quite as quickly as Microsoft would have hoped. Still, if the developers get behind the new features, and they prove a hit with users, there’s no telling how big it could get. Even if it takes a long time to get there.

As for a release date on Windows Phone 8.1, existing users will get updated within the next few months. New devices will launch with it installed from the end of this month.

Images via CNET and Microsoft