Microsoft Branded Smart Phone on the Way?

Though Microsoft naturally insists the release of its own line of branded tablets does not pose any risk of channel conflict with its traditional partners, that might not be the case. Nomura analyst Rick Sherlund says he has learned that Pegatron is also working on a handset for Microsoft. 


The project isn’t likely to be completed until 2013, but will contradict Microsoft's assertions that it is not competing with its customers. Google has faced the same issue with its ownership of Motorola Mobility.


The Microsoft move would emphasize for all third party device manufacturers that the mobile phone world is changing. Microsoft now will supply operating systems for third parties, but also will compete with its own branded devices, as Microsoft has signaled it will do in tablets.


Given Apple's highly-developed content ecosystem, the Android application community and now Microsoft's own move into tablets and, presumably, smart phones, third party suppliers who do not own their own operating system and content communities will find themselves at a serious disadvantage.