Microsoft is changing rapidly, with CEO Steve Ballmer saying the future lies in a "devices-and-services company." Company is designing a smartphone or should be said, a Surface Phone according to the current branding.
Unless Windows Phone manages to secure some improved momentum with version 8, then don't be surprised to see a Surface phone next year.
However, MS won't release its own Windows Phone device this year, as sources have told. Multiple insiders have confirmed there are no plans to introduce a Microsoft-branded Windows Phone device before the end of 2012, but that the company is likely considering it as a "Plan B." Microsoft officials continue issuing non-denials about a potential Surface phone. "We are big believers in our hardware partners and together we’re focused on bringing Windows Phone 8 to market with them," a spokesperson tells the media.
Courtesy: The Verge