Sources say that the project is still in incubation, but that it could have collided with the Surface brand and tanked it if it was executed imperfectly.
Thurrott: Dell’s Intel-powered Windows phone at standstill, indicative of Surface Phone challenges
The device was rendered out to be an incredibly thin device and leaked by Evan Blass to be run on an x86 architecture. That proved too big a challenge.
‘Minor’ Microsoft Surface revisions likely coming this fall, ‘big bang’ upgrades late next year
Microsoft may have the future of the Surface device family all mapped out, with small rehashes in the works this year, followed by major upgrades the next.