Microsoft 'testing' its own smartphone?

Microsoft is setting the groundwork to enter the smartphone race against rival Apple. That's according to Wall Street Journal sources, who said Microsoft is currently working with Asian component suppliers to "test" its own smartphone.

The move suggests Microsoft is looking to embrace the business model used by Apple, namely that the Mac and iPhone maker designs its own hardware as well as the software behind them.

The sources said Microsoft is only testing a smartphone design, and the company is not sure if a final product will ever enter mass production. The device is rumored to feature a screen that measures between four and five inches. This puts it in line with the iPhone 5 and Samsung's Galaxy S III.

Microsoft just recently began selling its first company-produced PC product, the Surface tablet. The new device went on sale last week beginning at $500.