Report: Microsoft working on its own smartphone design

Microsoft (NASDAQ:MSFT) is working with Asian component suppliers on its own smartphone design but has not decided if it will go into mass production, according to a report in the Wall Street Journal.

The report, which cited unnamed sources, including at the component suppliers, is certain to fan speculation that Microsoft will produce its own branded phone, akin to its Surface tablet. The report said the screen of the phone design being tested measures between four and five inches, which is currently the range for most high-end smartphones.

Microsoft declined to comment, but Microsoft CEO Steve Ballmer told the Journal earlier this week: "We're quite happy this holiday [season] going to market hard with Nokia (NYSE:NOK), Samsung and HTC. Whether we had a plan to do something different or we didn't have a plan I wouldn't comment in any dimension."

In October Ballmer suggested Microsoft would do what it takes to make its software successful. "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 told the BBC.

Citing unnamed sources, The Verge reported in October 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.

And Microsoft has solid carrier support this holiday season too: AT&T Mobility (NYSE:T), T-Mobile USA and, perhaps most importantly, Verizon Wireless (NYSE:VZ), plan to sell Windows Phone 8 devices this month. AT&T will launch the Nokia Lumia 920, Lumia 820 and HTC Windows Phone 8X in November. T-Mobile will release the $99 Lumia 810 and $149 8X. And Verizon will launch the Lumia 822, 8X and in December the Samsung Electronics Ativ Odyssey, presumably a variant of the Ativ S that Samsung announced in late August.

Microsoft needs the new wave of smartphones and marketing to spur adoption. According to research firm IDC, Microsoft captured just 2 percent of the global smartphone market in the third quarter, in contrast with Google's (NASDAQ:GOOG) Android, which captured 75 percent, and Apple's (NASDAQ:AAPL) iPhone, which garnered 14.9 percent.

In other Windows Phone news, Microsoft kicked off its "Build" developer conference this week by urging developers to write applications for Windows 8 and Windows Phone 8. The company gave each paying attendee a Lumia 920, one of its Surface tablets and 100 GB of free space on its SkyDrive online storage service.

Microsoft also admitted that its Windows Phone 8 platform does not have a notification center like iOS and Android "because we ran out of time," according to Thomas Fennel, a program manager at Microsoft. "It's very, very important to me… we get tons of feedback from developers that they want something like that as well. I promise we're thinking very, very hard on that one," he said, according to The Verge.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this The Verge article

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