Surface Phone is purportedly being developed behind closed doors at Microsoft

Microsoft CEO hinted it could be ‘ultimate mobile device’

Microsoft is purportedly developing a next-generation smartphone, dubbed Surface Phone.

Rumours of the flagship phone have circulated online for years, with the project now believed to be under the supervision of Surface Vice President Panos Panay.

Industry sources claim Intel is heavily involved in the smartphone project.

The hugely successful chipmaker could help the Surface smartphone realise its plans to bridge the gap between a smartphone and a productive mobile device.

Microsoft has never formally acknowledged the existence of a Surface Phone, although it has made several hints.

CEO Satya Nadella revealed in an interview last year that Microsoft's next attempt at developing a smartphone would be the "ultimate mobile device".