Microsoft ‘to build own smartphone’ if Nokia and HTC don’t deliver on WP8

Seattle giant’s fall-back plan if key partners fail to compete with Android and Apple

Microsoft is secretly planning to make its own smartphone and is already testing one design, according to those in the know at its parts suppliers.
It’s claimed the phone would effectively serve as ‘Plan B’ if key partners such as Finland’s Nokia and Taiwain’s HTC fail to shift sufficient handsets using the Seattle software giant’s new Windows Phone 8 (WP8) OS.
Both Nokia and HTC are struggling in the handset market, with the Finnish company – headed by former Microsoft executive Stephen Elop – no longer figuring in the world’s top five list of smartphone makers. Just over a week ago it was also forced to undertake a €750 million ($979 million) bond sale in a desperate bid to prop up its rapidly sinking cash pile.
Similarly HTC has had problems trying to keep up with competition from Apple and Samsung and has been rumoured to be seeking help from the Taiwanese government.
At Microsoft’s recent launch of WP8 among the devices showcased were Nokia’s Lumia 920 and HTC’s 8X smartphones, though the Seattle giant’s CEO Steve Ballmer has already shown his willingness to build hardware if need be, even if it means competing with long-time partners, through the creation of the Surface tablet running Windows software.
It was built amid Microsoft concern that that its existing partners such as Hewlett-Packard and Dell hadn’t been able to compete head-to-head against the iPad
Meanwhile the stakes surrounding WP8 couldn’t be higher for all sides. Latest IDC show that three out of four smartphones now sold are Android devices with Apple’s iPhone accounting for most of what’s left of the market.
According to reports in the Wall Street Journal, Microsoft now wants to be sure that if partners like Nokia and HTC don’t deliver it won’t have to start building its own hardware from scratch and at short notice.
The newspaper has previously reported how Microsoft’s component-maker partners in Asia are already testing parts for a Microsoft phone.
Neither Nokia or HTC have commented on the rumours.