Sources suggested Oct. 1 that while Microsoft has hardly had a chance to promote its new Surface tablets ahead of their rumored release date on Oct. 26, the company will debut a Surface smartphone in the first half of 2013. While many wondered what this might mean for other Windows 8-based smartphones made by the likes of HTC and Samsung, whispers of Microsoft's intentions have already drawn a response from mobile partner Nokia.

CEO Stephen Elop responded to news of Microsoft's rumored Surface Windows Phone 8 smartphone in an interview with GigaOM. Elop claims that Microsoft producing its own Windows Phone model won't adversely affect Nokia's position in the market, and added, "I don't think it changes the relationship," referring to mobile partnership the two companies formed in 2011.

"It's incumbent upon us at all points in time to build the world's most innovative smartphones. Which is what we believe we've done, for example, with the Lumia 920," said Elop. "That's something that's done based on years and years of work, and years of investment in what makes great mobile devices. 

Elop said he couldn't confirm or deny the existence of a Surface phone. However, he added that even if Microsoft goes through with plans for a smartphone, it shouldn't affect Nokia's phones because the company enjoys some exclusive, significant benefits from its close relationship with Microsoft that would allow it to compete with whatever the company releases. He implied that while Microsoft hasn't done so yet, the company could grant Nokia use of unique Windows Phone 8 features to distinguish it from rival models.

Elop suggested that Nokia's early adoption of Windows 8 ensured it would have those "exclusivities" that "no other Windows Phone maker - not even Microsoft - has the right to duplicate," according to GigaOM. Elop did not elaborate on just what those exclusive features were.

"We still preserve the same rights under the contract, regardless of who is making those phones," he said. "There are certain things we have rights to."

Aside from the close relationship between Nokia and Microsoft, Elop further indicated the company wasn't threatened by the news, noting that certain unique technologies developed by Nokia in-house will allow it to distinguish itself in the market without Microsoft's help. He pointed to camera tech and low-light photography hardware, in particular as unrivaled technologies, which Elop says have been in the process of being developed for "five or six years."

The China Times first broke the news that Microsoft was adapting its Surface tablets to the smartphone market for use with a new Windows Phone 8. The newspaper spoke to sources who indicated Microsoft has been working on a Surface smartphone since June 2012. Around that same time Noruma's Rick Sherlund noted, "Our industry sources tell us that Microsoft may be working with a contract manufacturer to develop their own handset for Windows Phone 8."

The rumor was almost immediately diffused by Microsoft. When asked if Microsoft had plans for a Surface smartphone, Greg Sullivan said, "No we do not...We have a strong ecosystem of partners that we are very satisfied with."

That "strong ecosystem" Sullivan makes light of remains very much focused around Nokia, with token nods by Samsung, HTC, and ZTE. Obviously, Microsoft creating its own smartphone is going to draw fire and criticism from some, if not all of those companies. Even Microsoft has admitted the possibilities of its interests conflicting with its partners', "Our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform," said Microsoft in an SEC filing.

The handset is in the late stages of development and will launch in the coming months, according to Fox News.

Microsoft Surface tablet features

The RT sports a HD screen (1280 x 720), while the Pro has a 10.6-inch Clear type Full HD (1920 x 1080) screen with 16:9 widescreen.  

That means they are among the biggest tablets in the market. If you are not satisfied with the typical 10.1-inch tablet, you can go for the Surface tablet. Along with the touch keyboards with the device, you can turn the machine to a small notebook.

The Surface tablet comes with five Touch Covers. Well, you can pick up any one while purchasing the machine. Different from typical keyboards, the Surface keypads provide brilliant typing experience thanks to their touch-based surface.

The Surface tablets mount both front and rear cameras. The front camera, named life cam by Microsoft, makes the tablet perfect for video chatting through Skype or other services. Using the rear camera, you can capture images and video clips.

Microsoft puts forward better memory options with the Surface tablets. The device comes in 32GB, 64GB and 128GB options. The 128GB is available only with Surface Pro. Further, you can expand the memory using external memory sticks thanks to microSD card slot. That is, you can store enough data including music, software items and video in external clips.

The 3mm Touch Cover can be connected to your Surface tablet with a single magnetic click, so, now you can type text and send messages quite easily.

The Surface's tablet housing features a revolutionary kickstand. Along with fully functioning keyboard and track-pad, the integrated kickstand helps you place the gadget in both portrait or landscape modes. 

According to Bloomberg, Surface will only be able to go online using a short-range Wi-Fi connection. This is a stark contrast to Apple's iPad 3, which has a 3G option, and a faster LTE connection.

Media tablets powered by new Microsoft operating systems Windows 8 and Windows RT will have an impact on the overall market - just not this year, according to market intelligence firm ABI Research.

Windows-based tablets will commence shipments at the end of October and capture an estimated 1.5 percent of total tablet shipments for 2012. Pricing for Windows tablets will be a key consideration for end-user adoption.

If priced aggressively towards current Android tablets, Windows tablets could see 2013 shipments increase 10-fold year-over-year. But if they're priced like Apple's iPad offerings, Windows tablets may only double or triple shipments in 2013. Growth in the total available market is expected to come from businesses adopting tablets, which is expected to be a strong area for Windows 8.

Microsoft CEO admitted recently Surface tablets would be priced to compete with products like Apple's iPad, and Amazon's Kindle Fire HD. Ballmer said Surface tablets would likely sell from "probably $300 to about $700 or $800″ depending on whether they're equipped with Windows RT or Windows 8 Pro.

Ballmer also made clear that Microsoft has no interest in getting into a price war with Amazon or Google by offering low-cost 7-inch Surface tablets because he wants people to see the Surface as a professional device that can be used for work as well as media consumption.

"If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle to do their homework?" Ballmer asked rhetorically. "The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it."

Ballmer's statements confirm earlier whispers of the Surface's two-tiered pricing, with the more expensive Windows 8 Pro-based tablet likely selling for around $800.

Microsoft is expected to unveil its Surface tablets at a New York event on Oct. 25, and release them to the public through phyisical, and over 30 pop-up stores around the U.S. and Canada on Oct. 26.