Microsoft running losses on mobile division might write-off Nokia acquisition

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Microsoft has hinted that they could write off it’s Nokia acquisition within the next few months. This was revealed in a filing with US Securities and Exchange Commission (SEC) sometime last week.

Microsoft Mobile

Here are some of the quotes from the software giant:

“Given its recent performance, the Phone Hardware reporting unit is at an elevated risk of impairment,”

 

“In the third quarter of fiscal year 2015, Phone Hardware did not meet its sales volume and revenue goals, and the mix of units sold had lower margins than planned,”

 

This truly implies that the mobile phone division hasn’t been yielding any profits. It was also revealed that cost of revenue exceeded sales by $4 million, meaning the company lost up to 12 cents per phone sold, even before marketing, R&D and other expenses are factored in.

CEO Satya Nadella had this to say,

“We need to take further action to reduce our costs across devices as we execute on our Windows 10 first-party hardware plans,”

This and probably the coming launch of Windows 10 for mobiles might just turn things around for the software giant.

 

Source

6 comments

  1. I suspect that Microsoft’s acquisition of Nokia was to get a foot fall I. The phone arena, where Windows Mobile wasn’t doing particularly well.

    In addition to that, I’m sure the acquisition included patents and rights that are being used elsewhere in Microsoft. The final nail in the coffin was changing the branding from Nokia to Microsoft.

    Maybe like BlackBerry, this will change their approach to phone development especially with the introduction of Windows 10. Many companies have replaced their BlackBerrys and old Nokias with Windows Phone, so it’s looking at a bigger piece of the enterprise pie.

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