The Microsoft-branded phone may include Nvidia's Tegra processor and a telecommunications baseband chip from Qualcomm, wrote Doug Freedman of Broadpoint AmTech in a report Thursday.

Microsoft already sells the Zune portable media player, among other devices, so it isn't a stranger to the hardware business. And it has its Windows Mobile OS, which it licenses to other phone makers. But it doesn't yet have a smartphone of its own.

Rumors surfaced last year that Microsoft would launch a smartphone at the Consumer Electronics Show in January, but none materialized. Freedman now believes it will happen at MWC, which takes place Feb. 16-19 in Barcelona.

Microsoft declined to address the rumor directly. "We have nothing to announce at this time. We continue to collaborate with Nvidia on the delivery of innovative solutions that move the smartphone industry and the consumer experience forward," Scott Rockfeld, director of Windows Mobile, said in a statement.

Nvidia declined to comment. At last year's MWC, Nvidia announced that its Tegra APX 2500 mobile processor would support Windows Mobile and enable 3D user interfaces and high-definition video on smartphones.