Microsoft Tests Smartphone With Asia Suppliers - WSJ.com

This would be consistent with rumors that Microsoft built its own super-sized Chinese factory for Surface and other device types

"Microsoft Corp. 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 Inc., 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."

Microsoft Tests Smartphone With Asia Suppliers - WSJ.com