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Posted on 05/25/2016 1:02:24 PM PDT by Swordmaker
The company is taking a $950 million charge to unwind the last vestiges of the Nokia deal.
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Microsoft is further scaling back its flagging phone business, exiting the consumer market and cutting another 1,850 jobs.
As part of the move announced Wednesday, Microsoft will take a $950 million charge and cut what little remained of its Finland-based phone hardware business, unwinding the last of its disastrous $7.2 billion acquisition of Nokia's phone unit.
Last week, Microsoft announced separately that it was selling what was left of its low-end "feature phone" business.
The company has been scaling back its phone ambitions ever since the Nokia deal closed, with CEO Satya Nadella quickly shifting to a strategy focused on bringing Microsoft's software and services to Android and iOS rather than trying to convince phone buyers to shift to Windows.
Despite all the cuts — and having already seen its market share dip below 1 percent — Microsoft says it isn't totally out of the phone-making business.
The company insists it will continue to serve phones aimed at the business market and license Windows 10 to any other hardware makers that want to give Windows Phone a try.
"When I look back on our journey in mobility, we’ve done hard work and had great ideas, but have not always had the alignment needed across the company to make an impact," Microsoft's Windows and Devices head Terry Myerson wrote in an email to staff.
While the company said Wednesday to expect new Microsoft-made phone models, it declined to offer any specifics on its future hardware roadmap or to say why an even more decimated phone lineup will have greater appeal than the current one.
Microsoft moved last summer to limit the number of countries in which it sold phones and to focus on three main customer segments: Windows enthusiasts, entry-level smartphones and the business market.
Already by then it was hard to see how Microsoft could win by scaling back.
"It’s hard to see Microsoft’s massive phone layoffs leading to something other than an eventual exit from the phone business," Recode wrote at the time.
Here's Myerson's full memo to Microsoft employees:
To: Microsoft - All Employees
From: Terry Myerson
Date: Wednesday 5/25, 2AM Pacific Time
Subject: Focusing our phone hardware efforts
Team,
Last week we announced the sale of our feature phone business. Today I want to share that we are taking the additional step of streamlining our smartphone hardware business, and we anticipate this will impact up to 1,850 jobs worldwide, up to 1,350 of which are in Finland. These changes are incredibly difficult because of the impact on good people who have contributed greatly to Microsoft. Speaking on behalf of Satya and the entire Senior Leadership Team, we are committed to help each individual impacted with our support, resources, and respect.
For context, Windows 10 recently crossed 300 million monthly active devices, our Surface and Xbox customer satisfaction is at record levels, and HoloLens enthusiasts are developing incredible new experiences. Yet our phone success has been limited to companies valuing our commitment to security, manageability, and Continuum, and with consumers who value the same. Thus, we need to be more focused in our phone hardware efforts.
With this focus, our Windows strategy remains unchanged:
1. Universal apps. We have built an amazing platform, with a rich innovation roadmap ahead. Expanding the devices we reach and the capabilities for developers is our top priority.
2. We always take care of our customers, Windows phones are no exception. We will continue to update and support our current Lumia and OEM partner phones, and develop great new devices.
3. We remain steadfast in our pursuit of innovation across our Windows devices and our services to create new and delightful experiences.Our best work for customers comes from our device, platform, and service combination.
At the same time, our company will be pragmatic and embrace other mobile platforms with our productivity services, device management services, and development tools -- regardless of a person’s phone choice, we want everyone to be able to experience what Microsoft has to offer them.
With that all said… I used the words “be more focused” above. This in fact describes what we are doing (we’re scaling back, but we’re not out!), but at the same time I don’t love it because it lacks the emotional impact of this decision. When I look back on our journey in mobility, we’ve done hard work and had great ideas, but have not always had the alignment needed across the company to make an impact. At the same time, Ars Technica recently published a long story documenting our journey to create the universal platform for our developers. The story shows the real challenges we faced, and the grit required to get it done. The story closes with this:
And as long as it has taken the company, Microsoft has still arguably achieved something that its competitors have not... It took more than two decades to get there, but Microsoft still somehow got there first.
For me, that’s what focus can deliver for us, and now we get to build on that foundation to build amazing products.
Ping for your list. . . Microsoft gives up on cellular phone market.
Good. Back to core business and up will go my stock!
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I read that on WindowsCentral.com earlier today. I’m not so sure they are pulling out of the smartphone market completely, but they might be focusing on enterprise.
Of course I just bought a Lumia 950 XL yesterday. I do like Windows 10 Mobile. It’s coming along nicely and hopefully some more apps get written for it although it is a chicken and egg scenario with regard to app development.
Once they had the mobile Windows OS up and working, they should have licensed it to every Third World country on the planet for $1 a year.
They would have lost money, but only a fraction of what they lost on Nokia, and they would probably have a billion cheap mobile phones using the Windows platform, phones that were manufactured by a dozen different low cost Third World companies.
It’s a pity. I like Windows Mobile much better than iOS or Android.
:-(
Now if they would just stop their relentless push to convert to Windows 10.
Windows 10 FORCIBLY crossed 300 million units....
Such lying liars.
It's this their 3rd time to do so? You'd think people would learn. Then again, maybe they have.
Stupid MS, they should have used basic common sense... “stick with what you’re good at”.
MS is good at making an OS that dominates the business market and the casual home computing and hardcore gaming markets. Yet, they have for the last 3 major updates made that OS less friendly towards those markets in a vain attempt at rebranding themselves for a mobile market that is NOT their strength.
Any fool could have told them it would be a disaster, but that is another one of MS’s weaknesses: they never seek or listen to feedback from their customers before throwing hundreds of millions of dollars away on hare-brained ideas.
I have used them all, and I prefer Windows Mobile as well. I'll hang on to my 640 XL for as long as its useful.
I was going to get one in October, but I would have to switch from Verizon to ATT. How do you like yours?
HP is introducing a phablet for business with some interesting features, if it works. http://store.hp.com/us/en/ContentView?storeId=10151&catalogId=10051&langId=-1&eSpotName=Elite-x3
I remember trolls at FR telling me how MSFT was going to take over the mobile phone market with the new MSFT phone.
RIP.
I’ve ordered it but it won’t arrive until tomorrow evening. I had been putting off the purchase but they just announced a deal for $150 off and I was able to get $150 trade-in for my old Lumia 925. And a free display dock on top of that.
At that price I couldn’t resist anymore. I’ll let you know though once I get a chance to kick the tires.
The $150 off and free display dock I think is still going on.
I like the Windows mobile interface much better as well. I’m not a heavy app user so most of the things I use my phone for are email, web surfing, texting, calls, and a few other things which Windows Mobile already has apps for.
Now I don’t get any of the trendy apps, but I never used them much anyway.
I hated my company issued Winphone until it broke and was replaced with an iPhone. I suffered through two weeks of that and begged for my Winphone back!
“Now if they would just stop their relentless push to convert to Windows 10.”
One of the Windows 8.1 computers in our office fell victim to that unwanted upgrade just today. The user had been rejecting the nagware “recommendation” to upgrade for the past two months. Today, the machine simply upgraded anyway. Then to add insult to injury, the user had to “Accept” a screenful of legalese that allows Microsuck to pillage more information from the computer, or else the computer would be unusable. She was not a happy camper. I told the user that it was akin to rape, that she should just lay back and enjoy the experience! (Thank goodness she has a sense of humor!) And I said for the umpteenth time, “This is why I use Linux instead”.
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