Microsoft is reportedly working with component suppliers in Asia to test its own smartphone design. The latest rumor comes from The Wall Street Journal and is added to previous reports, despite Microsoft's official stance to deny them. The paper cited "people familiar with the situation" and unnamed "officials at some of Microsoft's parts suppliers" to report that the Redmond-based company is testing a smartphone design, although it isn't sure if a product will go into mass production. The device's screen measures between four and five inches, the report added.

Microsoft may be adopting a variation of a business model favored by rival Apple, which designs computers and phones along with the software that powers them.

Speculation has swirled for months that Microsoft would make its own smartphone, after Microsoft unveiled in June its Surface tablet last June.

In the smartphone market, Microsoft has recently released the Windows Phone 8 OS and is going to market with devices by Nokia, Samsung and HTC.

A coupe of weeks ago Stephen Elop, the chief executive of Nokia, said during a conference call that he welcome a Microsoft-made phone because he believed it would be a "stimulant" to sales for all companies making Windows Phone devices.

In April 2010, Microsoft launched and sometime later killed a line of youth-oriented low end smartphones called "Kin."