According to a report from Windows Central, an unknown Windows 10 phone slated for release this May 2016 has been canceled. In its place, a Microsoft Surface Phone is reportedly in development and the new flagship device will launch sometime in the second half of 2016.

The report states Panos Panay and the rest of the development team behind the highly successful and critically acclaimed Microsoft Surface and Surface Book devices have been delegated as the main team behind the new phone's development. 

It is stated that there was an original plan involving Intel to develop a new smart phone although it is unclear if this is a previous Surface Phone design or a Nokia carryover, given that in recent years Microsoft continued the Nokia Lumia lineup even after acquiring Nokia.

However, Intel appears to still be a part of the new plan for a phone developed by Panay, which is reportedly being called "Panos Phone" instead of a Surface Phone. This is most likely due to the fact that Panay is the one in charge and it is likely that his designs that are being prioritized.

Intel's involvement also leads to the speculation that the new Surface Phone might be a true computer designed as a phone instead of a phone solely relying on phone apps. This would lead to the inclusion of a processor far more powerful than that of the currently popular Qualcomm Snapdragon chipsets.

No release window has yet been announced but it is hinted that the phone might see an August 2016 release. This would go perfectly with the upcoming release of the Windows 10 "Redstone" update. This would be reminiscent of how Apple launches a new iOS version every year with the launch of a new iPhone model.

According to WinBeta, this new update will allow for seamless transitions from a phone to PC. Users will be able to continue using their app from their phone to their PC and can even make phone calls on their PC using their Phone.