Microsoft will not manufacture its own smartphones, executive says

Despite reports to the contrary, Microsoft will not be manufacturing its own Windows-branded smartphone, a company executive has said.

After the company unveiled its line of Surface tablet PCs last week, the rumour mill has suggested Microsoft would apply the same strategy to its smartphone division. But senior marketing manager for Windows Phone, Greg Sullivan said the company did not intend to produce its own handsets.

"We have a strong ecosystem of partners that we are very satisfied with," Sullivan said. So far, HTC, Nokia, Samsung and Huawei are among the manufacturers revealed to be developing Windows Phone 8 devices.

A Nomura analyst told clients last week that Microsoft has a deal with a contract manufacturer to produce Windows Phone 8 phones.

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

But there is also speculation that, rather than produce its own handsets, Microsoft may acquire Nokia, once the world leader in mobile phone sales. The Finnish manufacturer has had a difficult time competing in the booming smartphone market, with its stock having dropped to just above $2 a share. Microsoft is already investing significantly in Nokia, helping the company transition from its previous Symbian operating system to the Windows Phone platform, which it adopted last year.