Prior to now, the Surface Phone was rumor ware. There were rumors about it. This confirms that it will exist.
I consider this proof that there will be a surface phone.
WE don't know what features it will have, but the timing and the language around it are interesting and worth paying attention to. Part of that language includes "Microsoft Continuum."
I don't think Microsoft uses language by accident, so the TV or monitor is still part of the game, but "projector" is also meaningful.
Draw your own conclusions.
MSPowerUser - More at source
“We don’t want to be driven by just envy of what others have, the question is, what can we bring? That’s where I look at any device form factor or any technology, even AI. We will continue to be in the phone market not as defined by today’s market leaders, but by what it is that we can uniquely do in what is the most ultimate mobile device,”
Continuum turns your phone into a big-screen projector and a big-time productivity tool. Use a dock or adapter to connect to a TV or monitor, then use your apps and see your content on a larger screen. Or, show off your favorite stuff on a Windows 10 PC without needing a dock or adapter. Want to do even more? Connect a keyboard and mouse and get started.
Although Windows Phone devices were definitely not a priority for Microsoft in 2016, the tech giant's CEO Satya Nadella recently raised lots of eyebrows by claiming that it's Microsoft's intention to eventually bring forth "the ultimate mobile device". Supposedly, this will be the ever-elusive Surface Phone, which has been a favorite rumor subject for the Microsoft-loving crowd.
According to reports out of Taiwan, Microsoft’s rumored Surface Phone is said to be running trial productions of the upcoming handset. The company behind the production is said to be Pegatron whom some of you guys might know as one of Apple’s main producers of the iPhone alongside Foxconn.