Microsoft is reportedly working on a smartphone with brand-new software

It’s been rough going for Microsoft’s smartphone business for the better part of a decade, but the PC software juggernaut isn’t ready to throw in the towel just yet. According to Thurott, Microsoft is redoubling its efforts with a new device and software.

Sources tell the publication that Microsoft’s new phone, which is being tested internally, runs a never-before-seen “separate branch” of Windows Mobile, Microsoft’s smartphone operating system. It will deliver “new experiences” with an interface that’s “different than what we know today,” but reportedly at the expense of “older” applications — some Windows Mobile apps might not work on this new version, according to Microsoft.

The release date could be as little as a year away, according to Thurott.

There’s precedent for unusual smartphones from Microsoft’s skunkworks division. One of the company’s canceled flagships, known internally as the Lumia McClaren, used proximity sensors to detect when fingers were hovering over the screen. The phone’s screen stayed awake as long as you held it in your hands, and Live Tiles, the animated shortcuts on Windows Mobile’s home screen, expanded as fingers got closer. Other labor-saving features included the ability to answer calls by holding the phone to your ear, as well as the option to set the phone down on a table to enable speakerphone.

It’s one of a number of setbacks Microsoft’s mobile division has suffered in recent years.

In 2014, Microsoft acquired Finnish company Nokia for $9.5 billion, but was forced to lay off 18,000 employees when phone sales failed to turn around. Things deteriorated from there — in 2015, mounting development costs forced Microsoft to write down $7.6 billion and slash 7,800 jobs.

In 2016, Microsoft washed its hands of Nokia’s hardware business, selling its manufacturing facilities, brand, and digital services to holding company HDM Global.

But rumors of a new Microsoft-made smartphone persist. The most credible suggest it’ll come in three models — a consumer model, a business model, and an “enthusiast” model — and run Redstone 3, an unpcoming version of Windows Phone with native support for Win32 apps like Google’s Chrome browser and Adobe Photoshop.

In an interview with Marketplace’s “Make Me Smart,” Microsoft CEO Satya Nadella said the company’s next phone might not look like a phone.

“We make phones today, we have (original equipment manufacturers) like HP making phones … and we picked a very specific area to focus on, which is management, security, and this one particular feature that we have called Continuum, which is a phone that can even be a desktop,” Nadella explained. “So when you say, ‘When will we make more phones,’ I’m sure we’ll make more phones. But they may not look like phones that are there today.”

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