Microsoft is reported to be working on its own smartphone design and working with Asian suppliers, in a bid to take plunge into smartphone market.
Wall Street Journal cited unnamed officials at some of Microsoft's parts suppliers who said the company is testing a smartphone design but it is not sure whether the company will go for mass production of a product.
According to the reports, company is testing a smartphone with a screen size between 4 and 5 inches.
If the company brings in a smartphone into market, it will be in the league of companies like Apple who design smartphones and computers while developing software to run them.
Earlier this year, Microsoft had announced Surface, a new line of tablet PCs that are powered by company's Windows 8 operating system making its first foray into computer manufacturing since the 80s.