Microsoft May Be Making Own Phone, Analyst Says

Microsoft Corp is considering making its own smartphone to kickstart sales of its Windows mobile software, according to a Wall Street analyst who has followed the company for many years.

The lovely large-screen Nokia Lumia 900, is not eligible for the Windows Phone 8 upgrade. It happily embraced the Windows Mobile tributary OS Windows Phone 7.8 for its current devices and will just as eagerly build new Windows Phone 8 devices. Photo: VentureBeat/Flickr

Microsoft Corp. may be developing its own Windows Phone handsets, which is different from its current practice of working only with partners like Nokia Oyj, according to Rick Sherlund, an analyst at Nomura Holdings Inc.

Sherlund wrote in a note today, citing industry sources, the company may be collaborating with a contract manufacturer to build a phone, writes Bloomberg.

“Our industry sources tell us that Microsoft may be working with a contract manufacturer to develop their own handset for Windows Phone 8,” wrote Sherlund in a note to clients on Thursday.

“It is unclear to us whether this would be a reference platform or whether this may be a go-to market Microsoft-branded handset,” wrote Sherlund.

Rick Sherlund covered Microsoft for Goldman Sachs when the bank brought Microsoft public in 1986, according to Reuters.

However, Microsoft did not confirm or deny the speculation.

“We’ve got several great hardware partners that we’re working really closely with,” Microsoft’s Greg Sullivan told Mashable, “and we’re excited about what’s coming later this year with Windows Phone 8.

“That’s where we’re focused right now. Nokia, HTC, Samsung, Huwaei, Windows Phone 8 this year — we’re stoked,” he added.

The romour follows the launch of Microsoft-designed and -built tablet hardware the Surface tablet on Monday, Microsoft’s effort to join the fast-growing mobile computing market and to tackle Apple’s iPad head on.

Microsoft, the world’s largest software company, which is running to keep up with Apple’s iPhone and Google’s Android devices, said the common core means customers will have a greater choice of phones and applications, and be able to switch between multiple machines more easily, reports The Sydney Morning Herald.

On Wednesday, Microsoft officially announced at an event in San Francisco its new phone software, called Windows Phone 8. Windows Phone 8 is the latest version of Microsoft’s mobile software, set for release in October.

Smartphones with the new Windows Phone 8 program are to go on sale in the fall from Nokia, Huawei Technologies Co., HTC Corp. and Samsung Electronics Co.

Microsoft  didn’t mention plans for its own phone. The company needs to boost its share of the phone- software market, which was 2.2 percent in the first quarter, lagging behind Apple Inc. and Google Inc.

Microsoft used to build its business on creating software to be used on other companies’ hardware, but the success of Apple’s iPhone and iPad have demonstrated that making both and integrating the two smoothly has its benefits.

“We would not be surprised if MSFT were to decide to bring their own handset to market next year given that MSFT has decided to bring to market their own Windows 8 tablet/PC products,” Sherlund wrote with the use of Microsoft’s stock ticker.

If Microsoft did make its own phone, it would be a blow for struggling Finnish handset maker Nokia, which pledged to use Windows software in its smartphones under a multi-billion dollar pact last year.

If Microsoft wanted to be in the handset business, it might even consider buying Nokia, suggested Sid Parakh, an analyst at fund firm McAdams Wright Ragen, although he said that was unlikely.

“Microsoft can’t afford not to have phones sell. They have to find a way of selling it,” said Parakh. “It’s a significant piece of their long-term vision of integrated devices.”

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