Microsoft announced today that it is streamlining it's smartphone business by laying off 1,850 employees, including 1,350 in Finland where much of Microsoft's mobile design and development staff is located. In announcing the restructuring Microsoft CEO Satya Nadella said “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" and that “We will continue to innovate across devices and on our cloud services across all mobile platforms.”
I interpret Nadella's reference to innovation across "all mobile platforms" to means that Microsoft will accelerate its development of apps for Android and iOS that tie into Microsoft services like Office, Outlook and the Microsoft Cloud. But I suspect that we won't see the release of any new Windows Lumia devices. For current users of Windows Phone and Windows 10 smartphones I expect Microsoft to provide service and support for at least a coupe more years.
Today's restructuring is the latest in a long string Microsoft failures in the mobile area. In the early years Microsoft achieved modest success with its Windows Mobile smartphones. But the launch of the iPhone killed that business and Microsoft abandoned Windows Mobile. Microsoft's answer to the iPhone (and Android) was Windows Phone which launched in late 2010, over 3 years after the iPhone and 2 years after Android launched. Microsoft poured billions of dollars into Windows Phone but it never really caught on. They even purchased Nokia, their largest hardware partner, in 2014 for $7.17 billion when Nokia was on the verge of financial collapse. Windows Phone actually sold best shortly after it launched, attaining a peak market share of 3.6% in the third quarter of 2013. It's been mostly downhill ever since with Microsoft's smartphone market share falling to just 0.7% last quarter.
It will be interesting to see what Microsoft does next in the mobile arena, but it looks the Lumia era is over.
Sources: Microsoft, Recode, Statista. Image: Microsoft