Is Microsoft planning to enter the hardware mobile phone biz?

According to Doug Freedman, an analyst at Broadpoint AmTech, this might very well be the case. Freedman believes Microsoft is working on a Windows Mobile handset design featuring the NVIDIA Tegra chip and that this handset could show its face in the next six months or so. If this speculation is true, it would be NVIDIA’s second Tegra design win after HTC.

Since the rumor first was reported on News.com, Microsoft has officially responded by denying such a rumor and stating:

“Microsoft has no plans to make a phone..Our core focus has been and will continue to be providing software plus services and working with our partners to deliver great phones. Our partners have been integral in our success to date, and we are excited about the innovation we are bringing to the market together.”

I would tend to agree that Microsoft will stay away from the branding business when it comes to mobile handsets. Its Windows Mobile business is certainly an important (and probably lucrative) one and any Microsoft-branded phone would certainly stress existing business relationships – not to mention push third party hardware manufacturers to other alternatives (and there are plenty to choose from these days).

So what of this rumor? We’re betting this turns out to be a new reference design for a future handset that could be made by a number of hardware vendors. The real winner in such a handset design would be NVIDIA which has been trying to break into the mobile handset business for some time now.  Truth is – having an NVIDA chip inside a Windows Mobile is only one half of the equation. The rest would have to lie in major usability improvements to Windows Mobile.

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