Backed up with its amazing features and great reviews, everyone wants to get their hands on the new Nokia Lumia 920 powered by Microsoft's latest mobile software, Windows Phone 8. However, there are rumors that the company is planning to make its own hardware to go against Nokia's flagship phone.

BGR reported that they have a "source" claiming that a Windows Phone 8 is in the late stages of development. According to the report, "Our source declined to provide any details beyond the fact that the handset is in the late stages of development and will launch in the coming months."

"As we continued to dig for more details, China Times on Monday published a report stating that Microsoft's smartphone will launch under the 'Surface' brand - which is quite fitting, of course - and it will become available in the first half of 2013," the report added.

The same rumor emerged last June when Microsoft introduced its Surface tablet PC. Analyst Rick Sherlund said that Microsoft could be further expanding its horizon by developing its own smartphone and leaving its hardware partners such as Nokia, Bloomberg reported.

The report also said that Sutherland wrote that Microsoft could be working with contract manufacturer in building its own handset. However, Sherlund said that he is not sure if the device is a reference design for its partners to be used in Windows-based phones or if it is building its own line.

"We would not be surprised if MSFT were to decide to bring their own handset to market next year given that MSFT has decided to bring to market their own Windows 8 tablet/PC products," Sherlund said.

Upon the introduction of the new mobile operating system - Windows Phone 8, Microsoft's partners Nokia, HTC and Samsung released smartphones powered by the OS recently. However, Bill Gates' company did not reveal any future plans of developing its own line of handsets.

In 2010, Microsoft released its own handset - Kin, which sold so poorly that the company stopped working on it and dropped the whole idea.

If the company is really working on its own smartphone, there is a dire need for Microsoft to boost its market share in phone software, which is only 2.2 percent. Microsoft trails behind Apple's iOS and Google's Android. According to IDC, Google's Android was the smartphone market leader in the first quarter, with a 59 percent share, and Apple followed with 23 percent.

So far, there is no official statement from Microsoft regarding the rumors.