Microsoft is losing 1,850 workers in its smartphone hardware division, signalling the end of its phone dreams
Microsoft has announced it is cutting the workforce of its smartphone hardware business by 1,850 jobs, mostly in Finland. The company will also take a charge of $950 million in its fourth fiscal quarter results for “impairment of assets” associated with the cuts.
What Microsoft hasn’t said is that it’s getting out of the phone hardware business altogether, but coupled with the news that it has sold its feature phone business to Foxconn (along with the rights to use the Nokia brand) it’s difficult to see where the company goes from here. However, it seems certain that this marks the end of the company’s efforts to gain any significant share of the phone hardware market.
But what about Windows 10 Mobile itself? With a market share of less than 1% (down from 2.5% last year) it’s hard to see the platform having much of a future.
Although the company hasn’t said much, a clue is contained in Microsoft CEO Satya Nadella’s statement about the layoffs:
According to Nadella, “we are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same. We will continue to innovate across devices and on our cloud services across all mobile platforms.”
That mention of Continuum – a Windows 10 Mobile-only feature – certainly suggests that the company won’t be canning its smartphone version of Windows any time soon. The mention of enterprise before consumers indicates that, whatever hardware they create, it will not be expected to be a mass-market product, but that it will be designed to meet the very specific needs of IT departments rather than “ordinary people”.
However, the second sentence, which focuses on innovation “across all mobile platforms” tells the story of where Microsoft’s mobile future really lies. Nadella’s focus is on Office and the cloud, and he wants you to be using Microsoft’s services on an iPhone, an Android device, or whatever you choose. That, not licensing a mobile operating system to phone vendors or even building its own phones, is where the company’s future really lies.
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