Microsoft will likely debut its Surface Phone in early 2017, according to a report from Windows Central, which cites sources close to the project. The smartphone will be available in three models targeting various markets and budgets.
We most recently heard an update on the rumored Surface Phone in December 2015, when a report stated Microsoft decided to cancel a Windows Phone slated for May 2016. The company instead decided to create a Surface Phone, built by Panos Panay and the team behind Surface Pro 4 and Surface Book.
If the most recent report is true, we'll see Microsoft's new smartphone within the next calendar year. There aren't many hardware details, but it has been suggested Surface Phone could include an Intel processor and run x86 apps.
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Specs will likely vary among the three predicted Surface Phone models. The Windows Central report claims the variants could be designed for consumer, business, and "prosumer," or enthusiast, markets. There were no additional details on pricing or features that would distinguish each phone.
However, it is possible to make some predictions based on the features built into the Surface and Surface Pro hybrids. We'll most likely see Windows 10 features like Windows Hello and Continuum, and it wouldn't be surprising if the team included a stylus compatible with the new Windows Ink feature coming in the Windows 10 Anniversary Update.
Surface Phone isn't a new topic in the Redmond rumor mill. Microsoft has been decreasing the focus on its Lumia lineup, which was most recently updated with the Lumia 950 and 950 XL during an October 2015 device launch.
Even during the event, there was a sense Microsoft was turning away from the Lumia brand. Its two newest handsets seemed to take a backseat as executives highlighted features built into the Surface Pro 4 and Surface Book.
Despite updated hardware and free subscriptions to Office 365, the 950 and 950 XL failed to impress. Sales didn't do much to improve Microsoft's struggling mobile business, a problem that has plagued the tech giant for years.
One might think Microsoft had decided to abandon the mobile market in its entirety, but it continued to churn out updated builds of its Windows 10 Mobile operating system. What's more, in March 2016 it began upgrading older Windows Phone handsets to Windows 10, indicating the OS is ready for rollout.
It's worth noting several businesses outside Microsoft are adopting Windows 10 Mobile. As Panay and the Surface team continue to work on Surface Phone, more OEMs have begun rolling out smartphones running Windows 10.
An example is HP and its new Elite x3, a premium smartphone designed for business users. The Elite x3 is intended to be the core of a "mobile ecosystem" and, through the power of Continuum and compatible devices, can serve as a smartphone, phablet, laptop, and desktop.
Given Microsoft's enterprise pull, it's easy to assume at least one of its Surface Phone models will bear some resemblance to the Elite x3, but of course it's still too early to tell. We hope to learn more in coming months.