Microsoft is planning to release its first Windows Phone 8.1 update complete with support for folders, interactive cases and more.

It has only been a few weeks since Microsoft started pushing its Windows Phone 8.1 update to Lumia smartphones and new reports are already outlining the features that will embrace the first update to Windows Phone 8.1.

Word is out t hat the Windows Phone 8.1 GDR1, which is the name of the update, is already undergoing testing with manufacturers and could begin rolling out in late August to September, Nokia Power User reports.

With the details in hand about the Windows Phone 8.1 update 1, it is clear that Microsoft will debut the long-overdue support for folders, which has been available on Android and iOS for a long time. The latest addition will allow Windows Phone users to drag one Tile on top of another to create a folder. It helps better organize the apps in different folders for simple navigation.

The report further adds that the update will bring support for interactive cases. This is again a technology that is seen in all leading flagships from Samsung, HTC and LG. Phone makers took a different approach toward designing their unique smart cases, for instance, Samsung S-View flip cover features a rectangular window, LG's smart case has a circular window with access for various shortcuts and HTC sports a unique dot case to display important information on the front cover. It is about time Windows Phone enters the trending space and brings a smart case of its own.

According to The Verge, Microsoft's decision to support smart cases comes in favor of HTC's ongoing preparations for a Windows Phone version of the new One. One can expect a smart case that can perform various actions like its Android counterpart.

NPU also pointed out other improvements to the Windows Phone 8.1 with GDR1 update such as phonebook entry for Cortana to support a car's navigation system to assist car drivers with voice commands, support for 1280 x 800 screen resolution and 7-inch devices, medium Live Tile for Store app, support for Voice over LTE and dual SIM.

Microsoft hasn't confirmed the existence of the first Windows Phone 8.1 update but the information comes from inside sources familiar with Microsoft's plans.