Redmond is supposed to be ramping up production at its plant in Hanoi, Vietnam, optimizing the low production costs available in the country. Production lost by closing the more pricy Chinese plants will likely go to Compal.

Compal has a long history working on Windows-based smartphones and is supposed to have the inside trouser measurement of Windows 10 phones.

Others that Microsoft is looking at include Foxconn Electronics, Wistron and Pegatron because they are slightly more advanced with design, R&D and production capability.

Microsoft wrote off a fortune from its Nokia investments, which would have been far better investing in a small European-based  internet hardware magazine or betting on a horse. The company said that has not given up on making windows smartphones yet.