Microsoft to build its own Windows Phone, reports say
Rumors of a Microsoft-made phone have resurfaced, with three new reports claiming the Redmond-based company has mobile hardware ambitions.
Boy Genius Report and China Times both claim that Microsoft is working on its own Windows Phone hardware, but neither publication names any sources. WPCentral also reports that Microsoft has a phone in the making, and cites an unnamed source. The phone is supposedly in testing now, and is unique from all existing Windows Phone 8 hardware.
This isn't the first talk of a Windows Phone from Microsoft. In June, Nomura analyst Rick Sherlund, citing “industry sources,” wrote in a note to clients that Microsoft was “working with a contract manufacturer to develop their own handset.”
A Microsoft-made Windows Phone isn’t unreasonable. It might have seemed unthinkable a year ago, when the world was still waiting for Microsoft and Nokia to launch the first fruits of their collaboration. However, that partnership no longer seems ironclad, now that Microsoft is treating HTC's Windows Phone 8X and 8S like flagship devices. Might Microsoft burn Nokia (again) by creating its own Windows Phone? Possibly.
Microsoft’s own Windows 8 Surface tablet proves the company isn’t afraid to challenge its own hardware partners – for the good of the platform. If anything, Windows Phone needs more help right now than does Windows 8, since it’s failed to gain traction after two years on the market.
The question is what Microsoft stands to gain by making its own phone. A few possibilities come to mind. For example, Microsoft may have some hardware innovation in mind, similar to the Surface’s keyboard dock and integrated kickstand, and it may not trust its existing hardware partners to implement such an innovation. Pricing may also be a factor if Microsoft is willing to undercut its partners to promote the platform. Finally, Microsoft may want to have a device upon which its own brand name is prominently featured – even more so than it currently is on HTC phones.
Officially, Microsoft gave ZDNet's Mary Jo Foley the same non-denial that it did a few months ago: “We are big believers in our hardware partners and together we’re focused on bringing Windows Phone 8 to market with them.”
My guess is that Microsoft is quietly putting together its own hardware in case those partners don't pull through. There's speculation that Microsoft did the same thing with Surface, and only decided to announce the tablets after seeing PC makers' uninspired designs. Depending on how Surface performs, Microsoft may see fit to deploy the nuclear option for Windows Phone as well.