Microsoft to Start Making Smartphones, Upsetting Yet More Hardware Partners?

It really does look like Microsoft might be trying to become the new Apple by eventually making all its own hardware and software, tightly coupled to a closed walled garden ecosystem. According to anonymous sources at some of Microsoft’s parts suppliers, Microsoft is testing a smartphone design, but isn’t sure if it will release it as a commercial product. One person said that the screen is between four and five inches in size. This compares with its primary competitors, the Samsung Galaxy S3 at 4.8 inches and the iPhone 5 at 4 inches.

The WSJ interviewed Microsoft CEO, Steve Ballmer, asking if Microsoft would make its own smartphone, but he declined to comment. That seems like a reasonably certain admission that they are. Of course, making all their own hardware changes Microsoft’s business model of a software-only company with hardware partners, to a hardware and software company which inevitably competes with their hardware partners, straining relations with them. Looking at the Windows 8 tablet market where Microsoft makes their Surface tablet, already several major hardware manufacturers such as HP have either pulled out of making such devices altogether, or delayed them, such as Acer. It will be very interesting to see how Microsoft’s strategy unfolds.