The new Windows 10 mobile devices were expected to bail out Microsoft's phone business after the software giant had written off billions of dollars on the Lumia business. However, the company seems to have given up on the new mobile operating system. Terry Myerson, Executive Vice President of the Windows and Devices Group at Microsoft, said in March that Windows isn't the right platform to generate developer interest, at least in the current year. “We’re going to do some cool things with phones, but this year phones are an important part of our family but not the tip of the spear,” he added.
As early as in December, rumours spread like wildfire on Microsoft attempting to outsource its phone-making business to its Surface team which recently churned out popular hybrid tablets and laptops like the Surface Book and the Surface Pro 4. It was also reported that the next Surface phone would feature Intel's mighty x86 Atom processors along with existing Windows 10 features like Continuum to offer brilliant performance along with connectivity with every other Windows device available right now.
However, even though Microsoft may not launch successors to the Lumia 950 and 950 XL phones this year, other manufacturers like HP, Lenovo and Vaio have launched several Windows 10 phones to keep the operating system afloat in the medium term. While Lenovo launched three new Windows 10 tablets at Consumer Electronics Show in Las Vegas earlier this year, Vaio launched Phone Biz, a 5.5-inch Windows 10 phablet with 16 GB of storage, a 3 GB RAM, a 13 MP rear camera and a Snapdragon 617 processor and HP launched the Elite X3, a formidable 6-inch device featuring an OLED display with a resolution of 490 ppi, a 4,150 mAh battery, the latest Snapdragon 820 processor, an Adreno 550 GPU and 4 GB of RAM.
However, if Microsoft itself does not intend to manufacture any more Windows 10 phones in the short term, it is quite possible that other manufacturers may lose interest too. In such a case, the rumoured Surface phone may just be the face-saver that Microsoft would wish for. Last month, it was widely rumoured that Microsoft may launch the Surface phone at IFA in Berlin which is expected to take place in September. Windows Central speculated that Surface phone may not be an all-metal phone, so it is possible that we may be looking at a plastic or a composite material body here. The website also reported back in October that a prototype of the Surface phone is currently under testing in Surface' labs in Redmond.
As per latest reports, it seems that the Surface phone may not get launched at IFA in Berlin after all. Both WinBeta and Windows Central claim that since Intel has stopped producing its Atom line of processors citing irrecoverable losses, the Surface phone is now expected to be launched in the first half of 2017. The Atom x86 processors were supposed to enable the Surface phone to run Win32 applications which Lumia 950 and 950 XL cannot. Since all legacy Windows app runs by businesses are based on the Win32 architecture, the Surface phone cannot claim to be a phone for businesses without Win32 support. This means that the Surface phone project is stuck indefinitely until Microsoft finds a new processor which can enable Win32 apps to run on the Surface phone.
At this point in time, if we consider all the rumours to be true, Microsoft will either need to shut funding the Surface phone development and give its Windows 10 phones another chance or try to create a new chip on its own to keep the project, and its smartphone business, alive.