Microsoft's Windows phone 8.1 OS has been a hotly discussed topic of late. Firstly, the Windows Phone 8.1 grabs attention with Microsoft's personal digital assistant Cortana (available only in the US as of now) that correctly predicted the outcome of as many as 15 out of 16 of the recent Fifa World Cup matches.

Then, it is the Live Lock Screen app which the Redmond-based company made available in beta for users throughout the world.

Now, according to a report in The Verge, the first update to Windows Phone 8.1, currently termed Windows Phone 8.1 Update 1, will be available as a Developer Preview version starting next week.

This means that developers throughout the world should be able to lay their hands on Windows Phone 8.1 Update 1 from the first week of August 2014.

Microsoft is reportedly giving finishing touches to the next Windows Phone 8.1 update, and the company recently showcased various new enhancements within the update, to smartphone manufacturers.

Windows Phone 8.1 update 1 is expected to incorporate various enhancements for both original equipment manufacturers (OEM) and general users alike.

One important feature that the update is expected to bring along is the support for users to create folders on the Start Screen.

Users should be able to create new folders by just dragging a tile on top of another. Users can then rename the folder, and access all their applications directly from within the newly created folder.

New tiles can be added to the folder by tapping and dragging the selected tile inside the new folder.

On paper, the latest folder mechanism seems similar to Apple's iOS in which users create folders by dragging and dropping app icons on top of each other.

Once official, this new feature of the Windows Phone 8.1 should serve as the USP of the OS.

Along with the 'Create Folder' option, there is another feature that allows OEMs to take advantage of smartphone cases.

With this, users should be able to use their Windows Phone 8.1 smartphones (with interactive covers) more intuitively.

Currently, Android devices from manufacturers such as LG and Samsung synchronise with interactive phone cases.

The Verge report also states that HTC has already tested the interactive phone cover sync feature with a custom version (built to run Windows Phone 8.1) of its HTC One. This aspect could lead to new HTC Windows Phone 8.1 smartphones being launched.

Microsoft recently started rolling out the Windows Phone 8.1 update to users across select countries. The company has also begun seeding the Lumia Cyan update to owners of its Lumia smartphone range.

Both the Windows Phone 8.1 and Lumia Cyan update reached Australia and New Zealand recently.

Windows Phone 8.1 update 1 general release should follow the Developer Preview release.