Following the “modest” launch of its Windows RT-powered Surface tablet, Microsoft (MSFT) CEO Steve Ballmer told Reuters the Redmond, Washington-based company is definitely looking into building more hardware. As a company once focused almost exclusively on selling software, Microsoft is slowly transforming into a vertically integrated company that offers both the software and hardware. 

Although Ballmer says the company will still expect OEMs to make up the “lion’s share of all Windows devices over the next five years,” he also told Reuters “…it is absolutely clear that there is an innovation opportunity on the scene between hardware and software and that is a scene that must not go unexploited at all by Microsoft.”

BGR exclusively reported last month that Microsoft is building its own Windows Phone 8 smartphone that could carry the Surface brand and be released in the first half of 2013. It’s also rumored that Microsoft is working on a 7-inch “Xbox Surface tablet.”

Raymond Wong is a technology reporter with a passion for cutting-edge gadgets and clean design. He first realized his love for technology when he burned through so many AA batteries on the original Game Boy that scraping battery acid off it became the norm.