The Verge and currently working for Wired, so he's a pretty reputable source. According to Pierce, Microsoft was in the process of building a prototype phone "a few machines away" from where Microsoft was building the Surface Book laptop. Pierce didn't directly say it was the fabled Surface Phone, but he also didn't indicate that it was in any way related to Lumia branded phones, and the prototype was being built by the Surface team, which means a lot.Luckily, the reporter in question is David Pierce, formerly with
Still, if it is only in prototype phase, we would expect that the earliest we might hear an official announcement by Microsoft on a Surface Phone would be in 2016, which matches up to an extent with the timeline on previous rumors. Although, the rumors that the Surface Phone might be announced in early 2016 seem unlikely, because Microsoft would need to be past prototyping and on a final design by this point in order to hit that window.