Surface Phone Windows 10 Mobile
A leaked internal email says Microsoft is committed to smartphones for the foreseeable future and has "next generation products" in development. Jung Yeon-Je/Getty Images

Despite seeing revenue from smartphones plummet by 73 percent in the first quarter of 2016, Microsoft says it is committed to Windows Mobile and has promised employees that “next generation products” are in development, raising the prospect once again of a Surface Phone.

Microsoft is not a significant player when it comes to the smartphone market — at least not in terms of hardware. The company has spent five years trying to get its Windows Mobile operating system (previously known as Windows Phone) to compete with the iPhone and Android. Despite predicting it could capture as much as 15 percent of the market by 2018, it has never gone beyond 3 percent.

This has led to many questioning the future of Microsoft’s smartphone division, but according to an internal memo leaked to Windows Central, the Redmond, Washington, company is not throwing in the towel just yet.

“We are currently in development of our next generation products and I wanted to reconfirm our commitment to Windows 10 Mobile,” Terry Myerson, Microsoft’s head of Windows and devices, said in an email sent to executives and partners. “We believe in this product’s value to business customers and it is our intention to support the Windows 10 Mobile platform for many years.”

Myerson went on to say the company is “committed to deliver Windows 10 on mobile devices with small screen running ARM processors.” One of the main concerns analysts have about the Windows Mobile push is the lack of support from manufacturers who are sticking with Android as the operating system of choice.

Myerson addressed this in his email saying the company has “a device roadmap to support [continued support of Windows Mobile] from Microsoft as well as our OEM partners who will also be selling an expanded lineup of phone devices based on this platform.”

Last week Microsoft reported a huge drop in smartphone sales during the first quarter of 2016, with just 2.3 million Lumia smartphones sold during the three months to the end of March — down from 8.6 million the year before. For comparison, Apple sold 51.2 million iPhones during the same period in what was a disappointing quarter for the company.

Reports that Microsoft has been working on a Surface-branded smartphone to complement its range of Surface tablets have been circulating for some time, and Myerson’s comments are likely to give more credence to these rumors.

Windows Central claims the Surface phone will arrive in three versions but not until April 2017 and will focus on security and productivity as Microsoft targets the enterprise market which was previously dominated by BlackBerry.