Microsoft's best hope for a smartphone comeback is due in the second half of next year
This phone, designed by the Microsoft Surface team, is apparently referred to internally as "Panos' Phone" - after Surface boss Panos Panay, who took over Microsoft's device business this past July.
Tapping the Surface team is something of a Hail Mary play - while Microsoft has had success with tablets and now a laptop, the company's smartphone marketshare is a piddling 3% globally. The company wrote off billions of dollars from its acquisition of smartphone maker Nokia and phones running Microsoft's Windows operating system have not been huge sellers.
According to the report, Microsoft is still experimenting with different designs and form factors for this new phone, fabricating new prototypes right on the company's campus.
It could come as soon as the summer of 2016, lining up with the release of Windows 10 Redstone, a big update to the newly-launched operating system. Windows 10 Mobile, the smartphone version of the operating system, just released alongside the Lumia 950 smartphone in the last few weeks.
The bad news is that this potential Surface Phone could mean that the all-metal Windows 10 Mobile phone that Microsoft was said to be working on has been canceled, per the Windows Central report.
Desktop Windows software?
The upside is that this means that the engineering talent behind the very well-received Microsoft Surface Book laptop and Microsoft Surface Pro 4 tablet/laptop hybrid would at least attempt to bring their magic to Microsoft's seriously struggling phone business
Windows Central reports that Intel is somehow involved with the development of this new Surface Phone, which might mean that the device could run full, desktop Windows software.
If that's the case, it would be a huge coup for Windows 10 Mobile. Right now, one of the Lumia 950's best features is that if you hook it up to a monitor, keyboard, and mouse, you can actually use it as something approximating a full-blown PC.
That said, it's a concept held back by the fact that it can only run apps from the struggling Windows Store app market, meaning that you don't get truly full-fledged version of software like Microsoft Office, even in PC mode.
While it's still pure speculation at this point, if a Surface Phone is able to run full Windows apps, it would go a long way towards helping Microsoft sell phones to businesses, if nothing else. It would be a competitive edge that neither Apple nor Google could replicate.
But Microsoft has spent the last several years trying to make this whole "smartphone" thing work. And while it's definitely going through the motions, if this Surface Phone fails to make a splash - well, Microsoft is burning through its last chances pretty quickly.
Microsoft did not respond to a request for comment at the time of publication.