Microsoft and component suppliers in Asia are in the initial stages of testing a smartphone design, according to a report Thursday in the Wall Street Journal.
A source cited in the report says the phone has a screen size of between four and five inches.
Top smartphones from Samsung, Apple, HTC, and Motorola all have screen sizes in that range.
But officials at component suppliers added that they're not sure if the Microsoft phone would go into mass production, according to the report. Microsoft did not respond to a request for comment.
If Microsoft does follow through and pushes the device into commercial production, it would mean that Microsoft is a step closer to the Apple business model. Apple designs both the software and hardware for all of its marquee devices, including phones, tablets, and Mac computers.
Though Microsoft has just begun selling its first branded PC product, the Surface tablet, the bulk of PC design and production is still done by PC makers such as Hewlett-Packard, Dell, and Acer.
Redmond recently rolled out Windows Phone 8. Nokia, Samsung, and HTC are readying phones based on that operating system.