Microsoft Is Working On Building Its Own Phone, Says Nomura

Steve Ballmer Stephen Elop CES Microsoft NokiaNokia CEO Stephen Elop on stage with Microsoft CEO Steve Ballmer

Photo: Ellis Hamburger, Business Insider

Microsoft’s hardware plans may be greater than just a tablet.Nomura analyst Rick Sherlund drops this nugget in a note today:

Separately, our industry sources tell us that Microsoft may be working with a contract manufacturer to develop their own handset for Windows Phone 8. It is unclear to us whether this would be a reference platform or whether this may be a go-to market Microsoft branded handset. We would not be surprised if Microsoft were to decide to bring their own handset to market next year given that Microsoft has decided to bring to market their own Windows 8 ‘Surface’ tablet/PC products.

There are two reasons Microsoft might make its own hardware:

  • It has to figure out how to make money from mobile software. It doesn’t charge much for Windows Phone licenses. It could make more money selling phones like Apple.
  • Its biggest partner is on the cusp of collapse. Microsoft has tied itself to Nokia which is very close to collapsing. If Nokia does fall apart, then Microsoft will need a plan B.

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