Microsoft's Ballmer promises more branded hardware, stays mum on smartphone

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On the eve of the launch of Microsoft's (NASDAQ:MSFT) first branded tablet, the Surface, CEO Steve Ballmer said that the software giant will produce more branded hardware, but did not specifically say if the company will release its own smartphone.

"Is it fair to say we're going to do more hardware?" he told the BBC. "Obviously we are... Where we see important opportunities to set a new standard, yeah we'll dive in."

Despite the proclamation, Ballmer declined to say if those plans included a smartphone. "We have committed ourselves on a path where we will do whatever is required from both hardware and a software innovation perspective and the cloud innovation perspective in order to propel the vision that we have," he said.

Ballmer has previously been coy about whether Microsoft will produce a Windows Phone device that would directly compete with the likes of Nokia (NYSE:NOK), Samsung Electronics and HTC, which are all licensing Windows Phone for their own devices. "Look, we'll see what happens," Ballmer told CRN in July. "We have good partners with Nokia, HTC in the phone space. I love what we've got going on with the Surface. We are going to focus on Surface and our other Windows 8 tablet partners and see if we can go make something happen."

Citing unnamed sources, The Verge reported earlier this month that Microsoft won't release its own Windows Phone this year but that the company is likely considering it as a backup plan for the future. In lieu of that, Microsoft is working closely with its hardware partners. For example, Microsoft will jointly market HTC's first two Windows Phone 8 devices, the Windows Phone 8X and 8S. Microsoft plans to formally unveil Windows Phone 8 on Oct. 29.

Ballmer said in September that there is "a big challenge in front of us" for Windows Phone 8. Microsoft and its handset partners will need strong carrier support to increase Windows Phone adoption; Microsoft captured 2.7 percent of the global smartphone market in the second quarter, according to Gartner. Executives from Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), Sprint Nextel (NYSE:S), T-Mobile USA and U.S. Cellular have voiced their support for the platform. Verizon, AT&T and T-Mobile plan to sell Windows Phone 8 devices in the fourth quarter.

For his part, Nokia CEO Stephen Elop seemed to welcome the idea of a Microsoft-branded Windows Phone. "Well, I think it's certainly a stimulant to the ecosystem," he said of the possibility during Nokia's third-quarter earnings conference call last week, according to a Seeking Alpha transcript. "As I said earlier, we're encouraging HTC and Samsung and Microsoft or whomever to have devices in the market and to be making whatever investments that help spur the ecosystem on. As it relates to the competitive aspects of it, of course, anyone else in the ecosystem is some form of competitor. That being said, we're very proud of the unique differentiation that we are bringing to the Windows Phone platform."

For more:
- see this BBC article
- see this Reuters article
- see this GigaOM article
- see this The Verge article
- see this separate The Verge article

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