Microsoft Surface Phone rumours point to a release next year

Microsoft is secretly working on a new "Surface Phone," with development led by the company's new Devices head Panos Panay, according to an exhaustive report by Windows Central.

There have been rumours that Microsoft is working on such a device for some time - but it is only recently that they have had any credibility.

The thinking is that Panay has been unhappy with the company's flagship Lumia line of phones - but it is only now that he has received a promotion putting him in charge of all Microsoft devices, and not just the Surface brand, that plans are coming to fruition.

Previously, plans to make a Surface Phone had been beset by internal politics between departments, about who would manage the project. This appears to have now been sorted. The new device is being colloquially referred to as the "Panay Phone," such is his level of personal involvement.

Surface Phone with Intel inside?

At the moment, it still appears to be early days with the engineering team exploring different technologies, but the suggestion is that the new device will use chips supplied by Intel rather than Qualcomm.

The upshot of this being that this enables crazier speculation about how the new phone may conceivably run "x86" (intel) architecture software - which would mean it would have more in common with desktop PCs and laptops than other phones.

Perhaps this isn't quite so mad though - Microsoft has recently been touting "Continuum" as a means to turn a phone into a desktop-style experience, so perhaps it wants to take things to the next step and aim for full software compatibility?

The idea behind a Surface Phone would be to further try to carve out a new category of device, which can be both mobile and desktop - to provide another key differentiation from Microsoft's competitors on Android, as well as Apple.

A Surface Phone would certainly be a much needed kick for Microsoft's phone business. Though the Surface team has been consistently innovating with the likes of the Surface Book, the latest flagship mobile, the Lumia 950 was rather underwhelming.

The Surface Phone is expected to be released around May next year - to coincide with the significant Windows 10 "Redstone" update which will be rolling out around the same time (Yes, "Redstone" is a reference to Minecraft).

Of course, it is worth remembering that at the moment this is all based on rumours. Though Windows Central doesn't name its sources, it is usually fairly reliable. So we'll have to wait and see if Microsoft will say anything about it - though we wouldn't expect any official confirmation at least this side of Christmas.