I have taken the time to read and digest Microsoft’s just announced restructuring of their phone hardware business. Here are the key points of the exercise:
- Lay-off of up to 7,800 positions, primarily in the phone business (which was acquired from Nokia).
- Moving from a standalone phone business strategy to one that features a vibrant Windows ecosystem including Microsoft’s first-party device family
- Transfer the company’s imagery acquisition operations to Uber
- Sharpen focus in advertising platform technology and concentration on search
First, it is sad to see all those thousands of people from Nokia about to get laid off. One cannot even begin to imagine their pain right now and in the coming months. My heart reaches out to them. Still, Nadella has acted like a leader who understands the need to cut back on an unprofitable venture quickly – and Microsoft’s phone hardware division has been just that: unprofitable.
We already reported about Uber’s acquisition of Bing mapping technology, so that isn’t news at this time.
What of Microsoft’s new mobile strategy of focusing primarily on software without throwing out hardware completely?
- It was clear that the Nokia’s feature phones were going to go away. As a matter of fact, they are mostly gone from the market (at lest here in Nigeria).
- Microsoft is clearly going to trim down the Lumia product line, which has been argued is currently a mess. This is a good thing. One can only also hope that they use a better naming/numbering system than the current one. However, we will see much fewer Microsoft phone models.
- Microsoft will continue to woo more manufacturers to produce Windows smartphones and tablets, something that they have been quite successful with in recent times.
- In summary, Microsoft will invest heavily in the software, make a few hero phones, and let partners have a ball. Manufacturers will carry the burden of production and marketing, while consumers will see a greater diversity of Windows smartphones. Whether this strategy will increase Windows Phone marketshare significantly or not remains to be seen. However, there is no doubt that it makes sense.
Whatever happens, Windows Mobile is not dead. Nadella has not announced its death. At worst, the platform will remain on the fringes alongside BlackBerry, Sailfish, Firefox, and Tizen. Windows still has far more marketshare than those. If no-one is singing their dirge, Windows Mobile is far from dead.