Microsoft gearing Up To Move Towards Building Hardware, Sources Suggest

There is an increasing likelihood of Microsoft working on creating their own phone devices in an attempt to gain more share in the market, if sources are to be believed. This could be Microsoft’s backup plan, in case their current strategy of creating software for handset makers such as HTC and Nokia fails. An annual letter to the shareholders from CEO Steve Ballmer hinted at the possibility of Microsoft considering building hardware.

The latest version of Windows Phone, Windows Phone 8 was recently unveiled by Ballmer. Devices such as HTC 8X and Nokia’s Lumia 920 are among the most prominent devices running WP8. Analysts expect Windows Phone 8 to be Microsoft’s last chance to get back into the mobile space, at least in terms of smartphones. The possibility of Microsoft building their own handsets does not come as a surprise considering the software giant has already launched Surface, the Windows tablet. However, their decision to build hardware might put them into direct competition with handset makers who they have been in a partnership with for a long time.

Microsoft began working on Surface upon realizing that their partners Dell and Hewlett-Packard were unable to develop hardware that could give the iPad direct competition. With respect to handsets, Microsoft is not facing any concerns as yet. However, Microsoft is taking all precautionary measures in case their handset making partners fail in some way and to ensure that the company is not placed in a position to build their hardware from the very scratch, which includes building several prototypes which have been spotted in internet logs from time to time.

Microsoft currently views itself as a device and services company and moving into building hardware could be a significant shift for the company, as hinted by Ballmer. As of now, Ballmer refused to rule out the possibility of Microsoft manufacturing a phone. Component making partners of the company in Asia are already in the process of testing parts for building a Microsoft phone, as reported by The Wall Street Journal. Nevertheless, Microsoft is pleased with the HTC phones, with Ballmer personally promoting the new HTC 8X phone. Meanwhile, the spokespersons for Nokia and HTC did not comment on the matter.