Foxconn to Make Smartphones for Microsoft, Amazon: DigiTimes Report - eWeek

Taiwanese news site DigiTimes reports that Foxconn has received orders to manufacture smartphones for Microsoft and Amazon to go on sale in mid-2013.

A Taiwanese tech news site DigiTimes reports that contract manufacturer Foxconn has received orders to manufacture a limited number of smartphones for Microsoft and Amazon that would go on sale sometime in mid-2013.

News media reports and analyst predictions that Microsoft might introduce it's own brand of smartphones have repeatedly circulated since the introduction of the Microsoft Surface tablet and Windows Phone 8.

DigiTimes said Foxconn International Holdings and its parent company, Foxconn Electronics, declined comment. Microsoft and Amazon did not respond to requests for comment from eWEEK.

The news site also added, citing unnamed sources, that “Microsoft and Amazon's own-brand handsets will only have a limited shipment volume initially and may become a new business model for the manufacturers in the future.”

Foxconn is a contract manufacturer for a number of electronic products including the Apple iPhone and devices from Nokia, Sony, Lenovo, Huawei and ZTE, DigiTimes noted.

Speculation about Microsoft manufacturing its own smartphones has been circulating ever since the company introduced the Surface, the first tablet computer with both hardware and software from Microsoft.

Digitimes Research, a sister company to the DigiTimes news site, reported that Microsoft building its own smartphone could upset relationships with its current original equipment manufacturer (OEM) partners who make devices running Windows Phone 8.

“Microsoft's launch of own-brand smartphones may result in a reduction in support for the Window Phone platform by hardware vendors, which should otherwise serve as a key factor to push for the growth of the Window Phone to become a third major platform in the segment,” Digitimes Research stated in a report published Nov. 19.

The leading smartphone platforms in the market are Google Android and Apple iOS, respectively, according to IDC research. Nokia only makes smartphones running Windows Phone 8 but, while HTC and Samsung also make WP8 devices, they also make devices running Android.

The Digitimes report says that smartphone makers will be competing in an expanding market for the products next year. It forecasts global smartphone shipments to rise by 30 percent in 2013 to 865 million units, representing 43.9 percent of all handset shipments.

Microsoft CEO Steve Ballmer didn’t confirm or deny reports about Microsoft making its own smartphone when speaking at a Churchill Club event in Santa Clara, Calif., Nov. 14. He said he believes that OEM partners will continue to make “the lion’s share” of products running Windows 8 or Windows Phone 8, be they PCs, tablets or smartphones. But he said Microsoft would not rule out manufacturing more of its own products such as the Surface or the Xbox game system.

“There is an innovation opportunity on the scene between hardware and software and that is a scene that should not go unexploited at all by Microsoft,” Ballmer said.

Microsoft did irk some OEM partners when it announced plans to launch Surface in competition with them. J.T. Wang, the CEO of computer maker Acer, famously urged in August that Microsoft “think twice” before going into the device manufacturing business.

It was unclear from the DigiTimes report whether Amazon would sell the smartphones with the Microsoft brand or brand them as Amazon devices, though the latter seems more likely. Amazon, which built its empire as an ecommerce site, has also ventured out into the hardware business with its Kindle line of e-readers and tablets.