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Microsoft is working with component suppliers in Asia to test its own smartphone design, people familiar with the situation said, suggesting the computer-software giant is increasingly adopting a variation of a business model favored by rival Apple, which designs computers and phones along with the software that powers them.
Officials at some of Microsoft's parts suppliers, who declined to be named, said the Redmond, Wash.-based company is testing a smartphone design but isn't sure if a product will go into mass production.
One person said that the screen of Microsoft's smartphone currently being tested measures between four and five inches. Apple's newest smartphone, the iPhone 5, has a four-inch screen, while Samsung's Galaxy S III phone has a 4.8-inch screen.
Speculation has swirled for months that Microsoft would make its own smartphone, after Microsoft unveiled in June its first homegrown computing device, the Surface tablet. The Surface went on sale last week, and it remains controversial among longtime Microsoft allies, some of whom believe the company is unfairly competing with their personal-computer models running Microsoft's Windows software.
In an interview with The Wall Street Journal on Monday, Microsoft Chief Executive Steve Ballmer declined to comment on whether Microsoft would make its own smartphone.
"We're quite happy this holiday [season] going to market hard with Nokia, Samsung and HTC," Ballmer said, referring to companies making smartphones powered by Microsoft software. "Whether we had a plan to do something different or we didn't have a plan I wouldn't comment in any dimension."
A Microsoft spokesman declined to comment.
Read more about Microsoft's plans at The Wall Street Journal.