Rumors have surfaced concerning a Microsoft plan to launch its own branded Windows Phone 8 device. Such a move by the software giant could potentially change the fortunes of Windows Phone 8, and could also pose a threat to Nokia's plan for growth based on Windows Phone 8.

The rumor came first via the ChinaTimes, who claims that Microsoft has been slowly developing its own hardware for more than 4 months, and has already selected a partner to assemble the handset. The planned launch of the Microsoft branded Windows Phone handset is set for the first half of 2013, giving OEMs room to compete with their own offerings.

The second rumor came via BGR, whose sources basically gave the same information reported by the China Times.

What does this mean for Nokia, the company that went all-in with Windows Phone? As it stands, this move by Microsoft could put Nokia in a difficult position to sell Windows Phone 8 devices.

Nokia's addition to the Windows Phone movement as an exclusive partner created a lot of buzz, yet despite all the excitement, Windows Phone is still struggling to gain traction in a market ruled by Androids and iPhones. A Microsoft branded Windows Phone could mean that the relationship between Nokia and Microsoft has soured.

Both companies are to be blamed here for Windows Phone's lack of success to date. Microsoft released an OS that had nothing truly amazing compared to an iPhone or an Android in terms of functionality. Nokia on the other hand, delivered on the hardware front, but the only software the company brought to the table at the time was Nokia Maps, and not even that was full-featured compared to versions on Symbian.

Microsoft may be pushing to get its own hardware out there to help boost sales of its software platform beforeWindows Phone becomes too expensive to maintain in a market where it is unable to grow substantially. Nokia and CEO Stephen Elop might even feel betrayed by Microsoft, but the company is only taking shares from other Windows Phone OEMs and barely stretching the footprint of the platform in key markets.

It means the company is in trouble, and it means Nokia could potentially become just another random OEM creating Android phones in a very saturated market. The consensus in the tech community is that it must succeed with Windows Phone or face the end.