Reports are emerging that Microsoft's 'Project Pink' smartphone project is in trouble, with rumours that the team's employees "hate the product" and that most of the original Danger/Sidekick team acquired by Microsoft in 2008 have now either left or been fired.

Project Pink is (or perhaps, was) meant to be Redmond's first move into the smartphone hardware market, to take on the current market domination of Apple's iPhone, RIM's BlackBerry and Palm's Pre.

TechCrunch reports that they were "recently contacted by a source with a seemingly exhaustive knowledge of Microsoft's Project Pink, and what they've shared with us doesn't sound good" noting that, while their source has maintained absolute anonymity, they have "since verified enough of the details with independent sources to believe what they've shared to be true."

The source claims that most of the original Danger/Sidekick team that Microsoft bought for its phone expertise has now either left or been fired, leaving "no braintrust that understands how to build a project."

Staffers using iPhones

They add that many of the remaining team members use iPhones and "hate the product" that they are working on, which is apparently two years behind schedule. The remaining team members also do not have the experience necessary to build a workable third party app store.

Talking about the 'Turtle', the smaller of Microsoft's two devices in development, the source said that its touchscreen was virtually unusable because "your finger covers 50 per cent of the screen".

Of course, it should be restated this is all currently rumour and speculation and could well be the work of a disgruntled ex-staffer.

Via TechCrunch