According to a Winrumors report, Microsoft CEO Steve Ballmer will keynote at the Mobile World Congress in February 2011, where he will unveil the second update to the company's Windows Phone 7 mobile OS.

Already, a first update to the Windows Phone 7 is planned in time for the forthcoming Consumer Electronics Show (CES) in January, which will introduce copy-and-paste functionality.

Noting that Microsoft's second Windows Phone 7 update will crack open the OS in an attempt to come at par with competitors, Winrumors said that the update "will introduce enhanced developer controls for applications. Microsoft is also expected to open up several new APIs that will allow for greater multi-tasking, in-app downloads and better customization for end users."

The report of the update comes at a time when All About Microsoft blogger Mary-Jo Foley has recently noted that there are rumors about Microsoft pulling the plug on Windows Phone 7 - which is currently available only on 12 handsets - if early sales are not encouraging.

However, the chances of Microsoft killing the project appear rather slim, more so because of the immense importance and prestige that is increasingly attached to the project.

In fact, Needham's Charlie Wolf in a Friday-issued note to clients: "The major event in the past quarter was the successful launch of Windows Phone 7, Microsoft's new smartphone operating system."