A Microsoft Surface Phone may come in three versions but not until early 2017

Lumia 950 and Surface
Lumia 950 and Surface (Image credit: Windows Central)

With Microsoft's Windows 10 Mobile OS continuing to be developed with new builds nearly every two weeks it seems like a good time to wonder what Microsoft's hardware intentions are going forward.

Sources close to Microsoft's plans have told me that any 'Surface phone' by Microsoft (see my previous article for more context) won't see the light of day until sometime in 2017. The good news is there could be up to three variants for different pricing tiers and markets.

No more Lumias

The current Microsoft strategy when it comes to mobile is still one of retrenchment. Microsoft has pulled back development of the Lumia line, including product cancellations, for presumably a few reasons, including:

  1. Windows 10 Mobile is still being developed and improved
  2. Let OEM partners have some breathing room to create new hardware
  3. Give Microsoft time to come back with a strong product and something to disrupt the market

While Windows 10 Mobile has significantly improved with the latest 10586.164 release aka 'production build' the OS still has a way to go before it can be truly competitive in the consumer market. Two major updates – Redstone 1 for summer 2016 (now called the Anniversary Edition) and Redstone 2 for spring 2017 – will bring a lot of polish to the OS as well as new features including deeper integration with Windows 10 for PC.

Microsoft is also encouraging its OEM partners to get on board with Windows 10 Mobile, and Microsoft's retrenching means the company does not have to compete with those same manufacturers. As it is, the Lumia line still dominates the Windows Phone market with around 97 percent share (AdDuplex, March 2016). Microsoft needs to diversify that market if they want the ecosystem to grow and not be completely propped up by Redmond.

As it is now, there are no new Lumias slated for release by Microsoft to my knowledge. In effect, it looks like the Lumia line is being phased out indefinitely.

Instead, Microsoft appears to want to start its hardware line over again in 2017 when it has a more robust mobile OS and the right, groundbreaking hardware to make a splash. Presumably, that also means ditching Lumia for an all-new brand. However, Microsoft's exact plans here are currently not known.

New Microsoft devices in 2017

Panos Panay and Surface Pro 3

Panos Panay and Surface Pro 3 (Image credit: Daniel Rubino / Windows Central)

If I hazard a guess, it sounds like Microsoft is planning to re-enter the phone space with new hardware at the same time as Windows 10 'Redstone 2.'

None of this is particularly new or shocking as Mary Jo Foley over at ZDNet recently reported that Redstone 2 has been pushed back to spring 2017 to line up with new Windows 10 devices being launched by the company. That pushback is reportedly due to new hardware being readied and not the OS being behind in development.

None of this is particularly new or shocking

Mary Jo Foley notes in the same article that Intel's next-gen processor family dubbed 'Kaby Lake' won't be available until the end of 2016 and Microsoft may want to take their time this round of devices to avoid the issues they had with the Skylake family. That means we may not get a Surface Pro 5 or Surface Book 2 until early 2017 as well. A non-pro Surface 4, however, could still happen this year.

If my sourcing is correct, we can now add 'Surface phone' in that spring 2017 timeframe as well.

From a planning perspective, all of this would bring together one high-profile hardware and software announcement from Microsoft similar to the Windows 10 Devices event in late 2015. That could be fascinating.

Three versions?

In an interesting twist and tying in with the no new Lumias news Microsoft seems to be doubling-down on the concept of a Surface phone. Sources familiar with some of the early plans being discussed for Surface phone have told me that there could be three models planned:

  1. Consumer
  2. Business
  3. Prosumer / Enthusiast

No details about what exactly will separate those categories, but they will likely focus on features and various price points. Indeed, variations in processors, internal storage, and other features could be part of the differentiation.

If accurate, this is a modification or, at least, a reinterpretation of Microsoft CEO Satya Nadella's letter outlining their hardware plans for Windows Phone back in July of 2015:

"We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We'll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they'll love."

The one substitution is Microsoft appears to be vacating the low-end for a general consumer device. The Surface line has never been about budget-conscious products but instead premium ones, so it makes more sense to realign the phone category too. Adding to that shift is Android, which has surged in the low-end market in 2015 with releases from Huawei and Xiaomi. Those devices have flooded Chinese and emerging markets making competition perhaps too fierce for Microsoft's ambitions.

Microsoft appears to be vacating the low-end for a general consumer device

Going back to that letter from July 2015, Nadella talks about the long-term of which these Surface Phones appear to be now a part:

"In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones."

Microsoft giving up on the low-end and budget phone market may not be a bad thing at all. There are plenty of OEMs to pick up the slack including BLU and Alcatel, who have better infrastructure to compete at those price points. It also makes a lot of sense that Microsoft would want to follow the Surface plan to reinvigorate phones just like it did for two-in-one PCs.

What is a Surface phone?

Assuming any such Surface phone – or line of Surface phones – goes through as planned there is still the question of what it will bring to the table this different from the HP Elite x3.

Microsoft will likely bring its Microsoft Pen technology to the line especially with their recent announcements at Build with 'smart inking' being open to all developers and their deal with Wacom to create a Universal Pen Framework (UPF). I would say a pen-focused device is almost a guarantee at this point.

Continuum will also be a major feature as Satya Nadella recently reaffirmed his company's vision for mobile centering around that technology. The question is will Continuum differ enough from the current Lumia 950 and XL version and really push the 'phone as a PC' experience to a new level.

While we have heard Microsoft is working with Intel, it is not clear at all if an actual 'Intel-based' phone is in the works or if it would be ready in time. Pushing back a Surface phone to spring 2017 could buy Microsoft more time on that front and may be related to the later release date.

Pushing back a Surface phone to spring 2017 could buy Microsoft more time

An alternative vision may have Microsoft creating some Intel-powered dock that boosts Continuum when connected but lets the phone operate in pure Mobile mode when not needed. However, this is pure speculation on my part.

So, what happens between now and then? Fans of Windows 10 Mobile will have high-end devices from HP with the Elite x3, Alcatel's Idol 4 Pro, and Acer Jade Primo to keep the market going while releases from BLU and others could drive the budget market. There could also be releases from other manufacturers coming this year that are not yet ready for announcement.

Assuming the news here is accurate any Surface phone will come just before the 18-month mark since the release of the Lumia 950 and Lumia 950 XL. While that is far from ideal Microsoft will only have one chance to get a Surface phone launch right so it may be best to take their time instead of rushing the process.

Daniel Rubino

Daniel Rubino is the Editor-in-chief of Windows Central, head reviewer, podcast co-host, and analyst. He has been here covering Microsoft since 2007 when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and for some reason, watches. Before all this tech stuff, he worked on a Ph.D. in linguistics and ran the projectors at movie theaters, which has done absolutely nothing for his career.

  • This is news...
  • the article clearly says at some point "none of this actually news"
  • lol Posted from Crappy Old Laptop
  • As a hardware maker taking a year and a half off is never a good idea. But you know how Microsoft roll. They're much more an enterprise company than consumer these days.
  • No flagship for 1.5 years..sounds familiar. Posted from PornHub
  • Hilarious signature
  • Even funnier that you recognize that site, lol.
  • Last time WP platform without flagship. Now MS without flagship for next 12-18 month. Posted via the Windows Central App for Android
  • Well based on the article, we won't have flagship for 2016. It doesn't make sense either to release flagship for this year when they gonna release early 2017. So the gap make sense since we know have better idea of the roadmap. Unlike the past where Microsoft/Nokia kept silent and never release any flagship for x40 series with huge gap in between the last flagship 930 and now 950 series. We didn't even have 1520 successor as a 1530/1540, only now we got 950 XL as its successor which have even bigger gap in between. Even though not having a flagship this year is still not that a good news, at least they're pushing something better for early next year and we have at least some idea about it. So this bet better be really paid off by next year if this is a case. Also I think it's better Microsoft officially announced or give more obvious hint to customers that flagship will definitely come but not this year. If they can, at least one last Lumia mid-range will be a filler alongside with Surface 4. Also 3 Surface phones (or whatever they will call it) is a great idea but are they actually all considered equally a flagship with one "super-flagship", or will it be similar to what we have now with x50 family. For me, I wish to still have an entry-level Surface phone that serving as a reference device for entry-level devices, showcasing the best of W10M platform even for entry-level category that OEM can reference on, but still deviate it if they want even cheaper one. The point is that, having entry-level reference device showcase the platform that you can still have good quality phone for a low price. W10M can at least avoid the perception that it's bad on low-end hardware if OEM(s) didn't deliver consistent good experience for those phones, a reference phone can at least protect the perception to the platform. Android suffered with the perception that it's bad on low-end devices which still is, which is to blame mostly to the OEM who didn't make good optimizations to it, thanks to the bloatwares. This is why like Motorola phones with nearly stock Android have better performance even with more affordable price, based on the reviews and to my friend's phone. But anyways, it's great idea still to just focus on premium devices and let OEM fills up the rest, including the lower-price-point devices. Microsoft already have amount of control with W10M, so they can make optimizations to it on the base level. Sent from Turing Machine
  • Nice.
  • HP, Acer, and Alcatel are coming up with flagships, and they're happening in a space of months, not years. It doesn't matter that they're coming from OEMs other than Microsoft, they're still W10 Mobile flagships. Google is also not coming out with any android flagship in probably forever and nobody's complaining.
  • Google has an Android flagship every fall. This year it might even be late summer. Posted via the Windows Central App for Android
  • Microsoft is a software and cloud company, not a hardware maker ;)
  • Well, not purely so, MS makes the flagship stuff like the surface seres.
  • I truly hope that these are just Rumors. Take note that MS devices VP Panos wants their work to be secret. I think a September 1st model Surface smart phone could happen so Microsoft could have a Christmas gift for the Windows smart phone fans and test the Surface brand sale potentual
  • Yeah, that is not happening, no Windows devices this year, till spring 2017. Source: article above
  • I'm a big fan of Windows smartphones, but UWP really has to evolve more as an ecosystem, so the Surface Phone will have all the needed apps (or at least almost all). And it needs time. Posted with the Windows Central app for Windows 10 on HP 250 G1 notebook. It is a scary old monster, I think :D
  • Posted via UWP app for Windows 10 on HP Elitebook running Windows 7 and Windows 10 with a weak core i5 cpu and Bose speakers
  • My 950xl is cool for now. That's good timing since I just got my phone 2 months ago.
  • You mean to say that you'd buy another flagship phone about a year after you bought your current one? What's wrong with you people? 
  • I think the issue is more to do with how half baked the 950/XL were in the first place.
  • The Surface smart phones that use ARMS CPU's may still have an apps gap but the The Surface Smart phones that use Intel Mobile CPU's will have millions of desktop PC programs, games and ect it can run in contimuum mode plus be able to run all MS Windows 10 store apps plus Run all MS Universal apps which are now coming to the Windows 10 store. Microsoft is making Windows smart phones transform into smart phone / Pocket PC's hybrids. that is their big smart phone goal
  • Most x86 programmes only work with either a mouse or a track pad, whereas native mobile and UWP apps will function happily with touchscreen only. Unless you're planning on carrying a mouse around with you, few of these millions of apps will actually function on a phone.
  • I think the goal is to have two chips onboard. X64 and arm. But who knows how they will do it. X64 would make sense for continuum mode. Maybe she's born with it, maybe it's Lumia 950xl
  • You obviously have no idea of what you are talking about. buy a surface pro and get back to us when you are proven how wrong you are.
  • You do have a point however a laptop like dock is already created that Windows 10 mobile Continuum class smart phones connect up to for People to use who want a bigger screen. also you forgot the Windows Continuum class ARMS CPU and Intel CPU Windows smart phones are not for everyone but enough of them will be sold to make them worth Microsoft's time and money to create and sell. Folks the Smart phone  / Pocket PC hybrid device is coming and Microsoft is leeading the way to it's  creation come Hell or High water
  • Things are working pretty well, I'm really satisfied with Microsoft and Windows 10. Only downside is..it's working too slow. I expect Surface phone to have something new that will standout from others, like LED notifications, some cool design, something really NEW! Damn Microsoft, use your imagination!
  • "LED notifications" and "something really NEW" in the same phrase...
  • Can you name me a Lumia that has LED notifications? Yeah, new!
  • I think he was referring to the Blackberry feature you're proclaiming as new.
  • Ah, that addicting red light. It'