Microsoft chief executive officer Satya Nadella has disclosed that the company is developing a unique new smartphone that will be "the most ultimate mobile device."

Microsoft has never been a major player in the smartphone sector. Its Windows phones share only a small fraction of the mobile market pie. There have been rumors that Microsoft is looking to discontinue its Lumia range of phones.

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However, Nadella revealed in a recent interview that Microsoft would remain in the smartphone market. He said the company was interested in giving the market something new, not merely to compete with the existing market leaders.

Microsoft would not launch a new device without bringing something different, he said.  He said Microsoft's focus was not on its devices, but on individuals and organizations and how they use the devices.

Nadella, who has been in the cloud computing field for long, said that Microsoft's competitors were less aware of how intelligent interaction could evolve between people and computing devices. He said the company's lead in the field of artificial intelligent cloud computing would bring give it an advantage. 

Microsoft is already involved in structural innovation in phone devices and would concentrate on improving productivity, management, and security, Nadella said.

There are rumors that after pushing the Lumia range in the background, Microsoft is planning to launch its Surface brand of phones early. It is said that the company will stop selling Lumia phones in December and will launch the new Surface brand sometime early in 2017.

The new Microsoft phone is expected to retain the good features of Lumia. It will target the high-end segment of the phone market. There could be three versions for businesses, individuals, and phone enthusiasts. There has been no announcement of the possible specifications and prices of upcoming Microsoft smartphones.