Microsoft has had a huge year, but the tech giant isn't stopping anytime soon as new reports reveal there are plans to boost the upcoming collection of flagship handsets with the Snapdragon 820. Recent details on the much-awaited Surface Phone also emerge, making 2016 another big era in Microsoft innovation.

According to a report from Nokia Power User, the company is already well in the development of the new Lumia smartphones. The company is expected to introduce more advanced cooling technology in the future flagship models. Sources also reveal that Microsoft is already testing the upcoming devices with the new Snapdragon 820 processor.

The processor was recently released by Qualcomm and will likely be present in many future devices. The Snapdragon 820 is equipped with a 64-bit CPU core dubbed Kyro and built on 14nm technology. The GPU Adreno 530 is said to be 40 percent faster than the Snapdragon 810's Adreno 430 GPU.

While there have been reports of overheating in the new processor, Qualcomm has since denied the claims in an official statement to TechnoBuffalo.

"The rumors circulating in the media regarding Snapdragon 820 performance are false," a Qualcomm representative said. "The Snapdragon 820 improves on all IP blocks and is fabricated in the second generation of the 14nm process technology. It is meeting all of our specifications, but more importantly, it is satisfying the thermal and performance specifications from our OEMs."

The report from Nokia Power User also confirmed the much-anticipated Surface Phone, which will focus on productivity features rather than specs. These features reportedly include Win32 apps support and enhanced continuum.

According to WM Power User, this business-savvy smartphone is in talks to be released in the first half of 2016.

News of a Microsoft Surface Phone first took shape in a report from the Wired, where author David Pierce visited the company office and spotted a prototype of a smartphone.

The handset market is a relatively new venture for the Microsoft team, although it has already acquired the Lumia line from Nokia. The Surface Phone would be the first homemade smartphone from the company, another major step for them once it is released.

While no details have been confirmed by Microsoft, speculation has cropped up on the device including features such as a 5.5-inch display with QHD screen resolution and the Intel Atom x3 (SoFIA) 64-bit chipset, according to a report from Venture Capital Post. It will also be fitted with a Windows 10 OS, a 21-megapixel PureView Zeiss six-lens rear camera, an eight-megapixel Zeiss wide-angle front camera, 4GB of RAM and a USB-Type C port.