Will Microsoft build its own smartphone? 'We'll see,' says CEO

Microsoft's (NASDAQ:MSFT) CEO left open the possibility that the company could build its own smartphone, though he made it clear Microsoft's current focus is on its Surface Windows 8 tablets.

Microsoft Steve Ballmer


In an interview with CRN, Microsoft's Steve Ballmer didn't directly answer a question about whether Microsoft would build its own smartphone to compete with Apple's (NASDAQ:AAPL) iPhone--but he didn't rule out that possibility.

"Look, we'll see what happens," he told CRN. "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."

Microsoft made waves last month when it introduced two tablets, dubbed Surface, that will run its forthcoming Windows 8 operating system--thus directly competing with its Windows licensees. Microsoft previously only sold its Windows operating system to PC makers like Hewlett-Packard and Lenovo, which then built the actual hardware. The action was widely seen as an attempt by Microsoft to counter Apple's successes in the tablet space.

In smartphones, Microsoft currently licenses its Windows Phone operating system to the likes of Nokia (NYSE:NOK), Samsung and HTC. A move by Microsoft to build its own smartphone could undercut the businesses of its Windows Phone licensees--particularly Nokia, which has bet its future on its Lumia Windows Phone gadgets.

Ballmer's statements about a possible Microsoft smartphone are notable in light of recent denials on the topic by other Microsoft officials. When asked by InformationWeek in June whether Microsoft had plans to build its own smartphone, Greg Sullivan, senior marketing manager for Windows Phone, said, "No, we do not."

Ballmer's comments to CRN were part of a wider discussion about Microsoft's battle with iPhone and iPad maker Apple, now the world's most valuable company. Ballmer said Microsoft will leave no "stone unturned" in its attempts to counter Apple's advances in both hardware and software innovation.

Indeed, Microsoft's new hardware-focused strategy was highlighted by the company's announcement that it would acquire touchscreen maker Perceptive Pixel. Terms of the deal were not disclosed.

For more:
- see this CRN article
- see this Wall Street Journal article (sub. req.)

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