Microsoft said to be building its own smartphone

Once Microsoft unveiled its Surface tablet, its first foray into designing its own mobile hardware, this summer, you had to imagine that a Redmond-built smartphone wouldn’t be far behind.

And sure enough, according to a new report from a highly regarded news outlet, the Windows company is currently working with suppliers in Asia to test its own smartphone design…

From The Wall Street Journal:

“Microsoft Corp. is working with component suppliers in Asia to test its own smartphone design, people familiar with the situation said, suggesting the computer-software giant is increasingly adopting a variation of a business model favored by rival Apple Inc., which designs computers and phones along with the software that powers them.

One person said that the screen of Microsoft’s smartphone currently being tested measures between four and five inches.”

Wait, didn’t Microsoft just enter in a huge partnership with Nokia for this very reason, to design Windows Phone hardware? Yes. Well wouldn’t this irritate Nokia and other Windows Phone partners?

Nokia’s CEO Stephen Elop says no. The 50 year-old executive says that he would actually welcome a Microsoft-made smartphone, saying it would help stimulate sales for all WP manufacturers.

And stimulation couldn’t hurt. Despite receiving high critical acclaim, Windows Phone has yet to gain any traction in the market. In August, comScore had WP smartphone marketshare at just 3.6%.

But Microsoft certainly has the clout and the cash to change that. The question is, with Android and iOS platforms so far ahead, is it too late for Microsoft to catch up, even with its own smartphone?

What do you think?