There are gathering rumours of the Microsoft Surface phone, and at some point one has to feel where there is smoke there is a fire.

The latest news is ChinaTechnews.com reporting that Microsoft has secured a distribution deal for the handset with large Chinese retail chain Suning.

Apparently the deal was negotiated by Jean-Philippe Courtois, Microsoft’s global executive vice president and Microsoft worldwide president, who apparently recently visited Suning’s new headquarters in Nanjing for the first time, and implemented comprehensive talks with Zhang Jindong, chairman of the Chinese consumer electronic retail chain.

According to reports in Chinese local media, the two companies reached an agreement on their comprehensive cooperation over the next few years, and they expressed cooperation intent in various sectors, including e-commerce, product sales, and marketing.

Part of this agreement was that Microsoft’s new smartphone, which will be launched in 2013, will be first sold via the retail channels of Suning.

The companies have a long history, stretching all the way back to 2007, and is currently hosting Windows experience stores in Suning stores.

Do our readers think, given all the reporting, the device is real? Let us know below.