Microsoft denies MWC smartphone launch

A report by Rob Sanderson and Mark McKechnie at Broadpoint AmTech cited “multiple industry sources” stating that Microsoft would be announcing a hardware platform to rival sales of iPhone, Blackberry, Android or the forthcoming Palm Pre handsets.

"We do not see this as landscape changing, much like their Zune launch," the analysts wrote.

The announcement provoked a storm of online comment and rumours of a new move by Microsoft in the mobile and hardware sectors coinciding with Mobile World Congress (MWC) this year.

However Redmond has reacted to quell speculation; “Microsoft is not doing a phone,” he said.

The report follows a prediction in November by Canadian Canaccord Adams analyst Peter Misek that the company would be launching a handset at MEC in Barcelona. That prompted a similar official response from Scott Rockfeld, Microsoft's director of Windows Mobile.

Microsoft has traditionally relied on third party manufacturers for its platforms. The company has close ties with HTC, the fifth largest handset vendor in the world.

But the Zune player is struggling, with sales dropping 54 per cent in the last quarter, against stellar comparible returns for Apple. While Motorola has recently said that it would continue using Microsoft's mobile platform most of the growth with other operating systems.