Although Microsoft's CEO Satya Nadella stated that the company would not rush back into the smartphone market to try compete with Apple and Samsung, Microsoft is allegedly ready to start trial production of its flagship smartphone at the Taiwan-based ODM Pegatron.

The CEO also mentioned that they are working on "the ultimate mobile device," but hasn't provided any details about it. According to a Chinese-language Commercial Times report cited by DigiTimes, Microsoft is expected to announce the Surface Phone in 2017.

Rumor has it that the Surface Phone would arrive in the fall of 2017, which is in line with the start of trial production. Not much is known about the handset except it is powered by Snapdragon 835 SoC and could have up to 8 GB of RAM and 512 GB of storage.