Speculation on the long-rumored Microsoft Surface Phone has been revived lately after a tech reporter saw evidence of the device during a recently concluded tour at the Microsoft's headquarters.

The journalist in question is David Pierce, a former reporter for The Verge who is now working for Wired. During the tour, while talking with Microsoft exec Panos Panay, Pierce saw machines working on a prototype phone just near the area where Microsoft was mass producing parts of the Surface Book laptop.

"As soon as we start talking about it (the Microsoft Surface Book), he gets distracted by a CNC machine that's milling a Surface Book's bottom bucket. Panay just watches it for a moment, carving over and over to form the antenna gap. A few machines away, another machine works on a prototype of a new phone. And there are rooms everywhere in Building 87—top-secret ones—filled with new devices. Panay has to go check on them, too," wrote Pierce on his online article on Wired.

Pierce didn't actually indicate that the prototype was for the mythical Surface Phone, but he did mention that the device was being developed by the same division working on the Surface Book laptop.

He also did not say if the device had anything to do with the Lumia smartphones. This strengthens the possibility of the prototype not being a Lumia but rather something different, plus it's being built by the Surface team.

Needless to say, if the Surface Phone is still in its prototype phase, the soonest Microsoft would make any official announcement of the device would be in mid-2016. Rumors claiming that the Surface Phone could be announced in early 2016 seems suspect at this point since Microsoft would have to be way past prototyping and on final design by now in order to meet that timeframe.

Why would Microsoft create a new line of smartphones when it already has the Lumia brand to work with?

According to PocketNow, it's all about having a contingency plan. Microsoft seems to be putting the entire fate of its mobile venture onto the Lumia 950 and 950 XL, and rightfully so. The pair promises to revolutionize the smartphone industry with its high-end features coupled with the ingenious Windows 10 Mobile operating system. But what if they eventually fail to light up the mobile market?

PC Advisor even noted that pre-order prices for the duo have been dropped to as much as nine percent in the U.K. to encourage sales. Hopefully, that's not an omen for the pair of flagship Windows 10 smartphones, but it is always better to be prepared, and, surely, Microsoft is aware of this too.

For the meantime, here's a concept video of the Microsoft Surface Phone from TechRadar.