Microsoft 'testing' own smartphone in Asia: report

Microsoft 'testing' own smartphone in Asia: report

Summary: The Wall Street Journal reports the software giant is 'testing' its own smartphone with Asia suppliers, but the rumors don't seem to stick. Will Microsoft "do a Surface" on its own smartphone?

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Microsoft is reportedly "testing" its own-branded smartphone with Asia component suppliers, according to sources speaking to The Wall Street Journal, suggesting a further push by the software giant into the hardware market.

"Officials" at some of Microsoft's component suppliers said Microsoft is "testing a smartphone design," but "isn't sure if a product will go into mass production." The sources say the device measures between four- and five-inches -- a display size-range comparable to the 4-inch display Apple iPhone, and the 4.8-inch display Samsung Galaxy S III.

It's the rumor that just won't die.

Screen Shot 2012-11-02 at 10.15.33

Last week, Microsoft chief executive Steve Ballmer left the door open on the potential for Microsoft to make more hardware, possibly a smartphone, and maybe even a smaller 'mini' Surface to help compete in the 7-inch market.

He said:

We have committed ourselves on a path where we will do whatever is required from both a hardware and a software perspective -- and the cloud innovation perspective -- in order to propel the kind of vision that [Microsoft] has.

But Microsoft still has strong ties with Nokia with the Lumia smartphone range, in spite of Nokia's crumbling financial situation. In October, the Finnish phone maker saw a Q3 loss of $754 with net sales down by 19 percent on the previous quarter, and the company is burning through its cash by $450 million a quarter.

That said, Nokia isn't the only phone maker Microsoft is saddling up to. HTC and Samsung, to name two, are also purveyors of Windows Phone-powered smartphones, and the software giant's ties to its remaining partners shows that Microsoft is not putting all of its eggs in one Finnish basket. 

ZDNet's Mary Jo Foley went with similar sentiments: "Leaving the door open with evasive non-answers is likely to hurt Microsoft's premier Windows Phone partner Nokia," she said. Of all reasons for Microsoft to develop a smartphone: "Nokia's fiscal health would be a far more believable reason, in my opinion."

Microsoft keeps dropping hints that it may (or is) developing a smartphone. The business implications are interesting. Microsoft's venture into own-branded tablet computers sufficiently riled some of its PC makers, notably Acer, whose chief executive warned the software giant to "think twice." By heading down a similar route in the smartphone space may open Microsoft up to more partner attacks -- in spite of how "laughable" they were -- but also damage existing relationships with hardware makers.

Windows Phone currently has 3.6 percent of the market, according to comScore figures, compared to Android's 52.6 percent and Apple iOS' 34.3 percent.

Microsoft still has a way to catch up, and it's not widely believed that a range of own-branded phones will make much of a difference. After all, the Lumia line-up and bevy of other Windows Phone-powered handsets hasn't done much good.

ZDNet has put questions out to Microsoft, but did not respond outside U.S. business hours.

Image credit: James Martin/CNET.

Topics: Windows, Microsoft, Mobile OS, Smartphones, Tablets

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17 comments
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  • Of Course Microsoft Will Do A Phone

    It's inevitable that Microsoft will do this. Just as with tablets, all its OEMs either have thriving, profitable Android businesses or are looking to go out of business completely. So the only company left to make a go of Windows without any competing distractions is Microsoft itself.

    What a pity Windows itself is so fragmented now...
    ldo17
    • Thriving?? Lol

      Riddle me this? What Android OEM is making a profit other that Samsung?
      IamTiger
      • Re: What Android OEM is making a profit other that Samsung?

        Off the top of my head, other companies with profitable Android businesses: Asus, HTC, Huawei, Lenovo, Sony, Oppo, ... how many names do you want?
        ldo17
        • @ ldo17

          Not that fast!

          The devil is in the details.

          What you say is called gossip. Facts are something else.

          It looks like Android licenses will garner the dominant marketshare in smartphones and 7-inch tablets. While 10-inch tablets and above including consumer touchscreen notebooks, ultrabooks, convertibles, all-in-ones and desktop PCs will be shared between Microsoft and Apple.

          Essentially, iOS/OSX and Windows are here to stay and make money. While Android will dominate the small form-factor device segment including smartphones and 7-inch tablets but except for Amazon, Samsung and Google itself, it will make no money for anyone else including HTC, Motorola, Asus etc.
          Check this out from supplier website digitimes.com:
          "
          In view of booming sales of the Nexus 7, 7-inch Android tablets are expected to take up at least 70% of the total sales volume of non-iPad tablets, with the remaining 30% to be for 10-inch Android and Windows 8/RT models, according to sources from Taiwan-based supply chain makers.

          The sources pointed out that the 10-inch Android tablets may see a significant drop in demand as they will be sandwiched by Windows 8/RT tablets and 7-inch Android tablets. Many players are already cutting 10-inch Android tablet projects and turning to develop Windows 8-based models.

          "
          calahan
          • Re: What you say is called gossip.

            No "gossip", just referencing the companies' own quarterly reports.

            The previous poster asked who else was making a profit from Android other than Samsung, I gave examples to show that lots of companies are doing so.
            ldo17
    • Agreed

      Of course they will, they have copied Apple's OS, Mobile OS, Pads, Pods, business models so why not Smart Phones. The only problem is they usually don't do a very good job of it.
      KBabcock75
    • Please explain...

      How Windows is fragmented? You have a desktop and phone OS built and designed off of a common kernel and shell. There are 2 flavors, one for ARM and one for x86 allowing application development to pan multiple hardware devices.

      I would hardly call that fragmented...
      omdguy
  • Microsoft did this before

    Microsoft previously released its own phone, called the Sidekick, which cost more than the iPhone to develop (factoring in the purchase of Danger Inc). Of course, the Sidekick failed (after Microsoft's cloud service collapsed).

    Microsoft tried its own phone yet another time, and called it the Kin, which had an advertising budget bigger than iPhone's development budget. Yep, the Kin was an epic fail.

    Microsoft has already had the Zune. Maybe its next phone could be called the Lume. Would you buy one?
    Vbitrate
    • My bet

      is Surface Phone, a companion for the Surface Tablet.

      As for whether or not I would get one, it would depend on the phone.
      Michael Alan Goff
      • surface phone

        i got a surface, if they make a phone like that i would buy one, because they do a good job. You don't need the best specs of everything to make a good product.. i know google is making nexus 10 tablet with very high specs, but the surface to combine with my desktop and soon a phone would be the best!!, developers will make great software for windows 8 which will be good if you have tablet and phone from windows...
        gevabar
    • Zune was great...

      From my experiences the Zune was the best mp3 player I ever used. I think Microsoft has had problems with marketing. That is definitly something that they could take from Apple which is a marketing powerhouse.

      Had the Zune had that kind of promotion it would have been successful. I don't know anyone who bought one who did not like the actual hardware and product.
      heathman
      • Re: I think Microsoft has had problems with marketing.

        Which is like saying "this fish has trouble swimming". The only reason Microsoft was ever able to sell any of its products was because of marketing, not because the technology was any good. If their marketing machine has now fallen over, what hope does the company have left?
        ldo17
      • Zune was Great

        The zune was good but what killed it was lack of apps! Windows 8 is not a finished product. There are so many things and little things you can not do. I am talking about settings and small things that microsoft did not think of and will cost them sales. You only get one First Impression! With microsoft making the hardware and android taking off so well I think PC companies are starting to look at linux. They would have to all come together and make one well Supported OS that devs would build for. This would be the death of microsoft.
        imsimsj
  • I hope they do!

    If they produce a phone as handsome as the Surface tablet, I'd definitely buy one!
    newyorkcitymale
  • Microsoft 'testing' own smartphone in Asia: report

    Microsoft is bringing competition to the mobile space.
    Loverock Davidson-
    • Microsoft is bringing competition to the mobile space

      I know! We can tell by the market share they have and all the people I see walking around using the windows phone! What a Joke!
      imsimsj
  • MS Phone

    If Microsoft made their own phone as a reference and priced it like the nexus 4 (299$ unlocked 8gb 349$ 16gb) with the same sort of high specs I might get one. Besides that though I don't see any reason to get one vs a nokia / htc.

    Honestly I would like to get a WP to try it since my android is dead atm but really see no good option other than the nexus since I'm a year off from an upgrade and don't want to spend 2x as much on something different for the same specs :P
    jagoob