Rumors have been flying for months that contrary to appearances, Microsoft Corporation (NASDAQ:MSFT) hasn’t quite given up on mobile. Its Lumia smartphones are not the path to Windows 10 becoming a mobile powerhouse. Instead, a Surface Phone has been reportedly hiding in the shadows.
Details of prototypes are beginning to emerge. And if they reach production, the Surface Phone will be the most powerful and flexible mobile device yet.
The Latest Surface Phone Rumors
Microsoft’s current smartphone entries — the Lumia phones acquired with its ill-fated purchase of Nokia Corp (ADR)’s (NYSE:NOK) phone business — have been a disappointment. Windows 10 Mobile holds a worldwide market share of less than 1%.
However, it has been widely suspected that Microsoft has been secretly working on a Surface Phone even as it lets those Lumia smartphones whither.
It appears that the Surface Phone is in the prototype stage and details have begun to emerge. Nokia Power User, a website known for early scoops on Nokia and then Microsoft mobile devices published leaked specs this morning. They point to a new line of smartphones that are more powerful than anything we’ve seen before, including from rivals like Apple Inc. (NASDAQ:AAPL) and Samsung (OTCMKTS:SSNLF).
According to NPU’s sources, the new Surface Phones will run a Qualcomm, Inc. (NASDAQ:QCOM) Snapdragon 835 CPU, with as much as 6 GB of RAM. This is Qualcomm’s newly unveiled flagship mobile processor. One of the prototypes is running x86 apps using Continuum. And there is reportedly a keyboard accessory that would turn the Surface Phone into a tiny, ultra-mobile Windows laptop.
The Surface Phone — paired with the expected 5.5-inch QHD display — is shaping up to be not just a flagship smartphone, but potentially the first entrant in a whole new category of mobile devices.
Microsoft’s Surface Success
While the Lumia and Windows 10 Mobile have been a letdown, MSFT is on a winning streak with its Surface hardware.
Designed in-house, with premium build and optimized to take full advantage of Windows 10, these devices have become category leaders. The Surface Pro 4 tablet, Surface Book laptop and new Surface Studio PC are each flagship devices at the top of their respective classes.
Each has also either created an entire new category (like the convertible Surface Pro), or redefined what devices within an existing product category are capable of.
It only makes sense that Microsoft would extend that Surface brand and design aesthetic to smartphones. And based on the Surface strategy alone, the expectation is that a Surface Phone would push the boundaries of what a smartphone is and can do.
Taking on the iPhone 8, Galaxy S8 and next Pixel Phone
At this point, the rumor mill points to a late 2017 launch date for the Surface Phone. That would make next year one of the most dramatic since the start of the smartphone era.
Apple is releasing its 10th anniversary iPhone 8 and will be using every trick in its design book to ensure it’s a smash hit. Samsung will coming hard with the Galaxy S8 and Galaxy Note 8 as it attempts to recover from the Galaxy Note 7 disaster. And Alphabet Inc. (NASDAQ:GOOGL) will be releasing the followup to its first smartphone, the Pixel Phone.
The Surface Phone will have to be something special to stand out in that pack, and to convince people to switch to the virtually unknown Windows 10 Mobile platform.
Based on what we’re hearing, MSFT understands that and is planning to launch a Surface Phone that sets a new standard for what a smartphone is capable of.
Considering the company’s Surface winning streak, a Surface Phone in 2017 could prove to be a spoiler for some of these mobile rivals.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
