A little more than a year ago Nokia officially ceased to exist as a mobile phone manufacturer. Nokia's efforts to reverse their decline in the mobile space by adopting Microsoft's Windows Phone operating system were unsuccessful, and eventually the company decided to exit from the mobile phone market entirely by selling their devices business to Microsoft. Former Microsoft CEO Steve Ballmer had stated that Microsoft was evolving from a traditional software company to become a devices and services company. With that mindset, the acquisition of Nokia made sense in order to acquire manufacturing, design, and software talent that had already been working on Windows Phones for quite some time.

Unfortunately, it appears that the purchase of Nokia's devices division has not worked out as well as Microsoft had hoped. New CEO Satya Nadella has also reversed course on the Devices and Services mantra and is instead focusing on software and services, but with first party hardware to showcase the software. After laying off 12,500 former Nokia employees last year, Microsoft has announced that will be eliminating up to 7,800 positions, with most of the cuts coming in areas of Microsoft focused on phones. In addition to the job cuts, Microsoft will be writing off 7.6 billion dollars which is essentially the entire value of the Nokia acquisition. There will also be a $750-$850 million restructuring charge. All-in-all, it's a big hit to their bottom line, and even companies that make billions every year have to answer to investors about charges like this. It is an even bigger write down than they took on the AQuantive deal a few years ago.

In an email to employees regarding Microsoft's future in the mobile business, CEO Satya Nadella stated “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.” One could interpret this as Microsoft consolidating their phone lineup which has arguably become a bit too large and filled with devices that only differ from each other in small ways. It's likely that the launch of Windows 10 for phones will be accompanied by more information about the future of Microsoft's phone business, but for the time being it appears that Microsoft is taking a step back from their role as a major devices company.

Source: Microsoft

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  • Pneumothorax - Wednesday, July 8, 2015 - link

    C'mon Microsoft. Seems like they're the poor underdogs these days....
  • nandnandnand - Wednesday, July 8, 2015 - link

    Net income in 2014: $22 billion. Google: $16.5 billion. $39.5 billion for Apple.

    Microsoft may look terrible and have an uncertain future, but they are no underdog.
  • kspirit - Wednesday, July 8, 2015 - link

    I find it hilarious how every year is the year when "NO 1 WILL BUY THIS LOL LINUX FTW! M$ ARE DONE FOR"-type of comments come about every time Microsoft makes a big business decision. People underestimate them far too much.
  • WelshBloke - Friday, July 10, 2015 - link

    Funnily enough as we are taking phone OSs "NO 1 WILL BUY THIS LOL LINUX FTW! M$ ARE DONE FOR" is pretty accurate.
  • jakoh - Thursday, July 9, 2015 - link

    He didnt say they are underdog, He said Seems.
  • name99 - Thursday, July 9, 2015 - link

    The word you are looking for is not underdog, it is irrelevant.
    MS is irrelevant (to personal computing) in the same way that IBM is irrelevant. They will continue to make enterprise money, they will continue to update zOS, hell they'll continue to produce POWER9 CPUs which are very nice chips for their target market. But they will have very little relevance to anything I personally buy.

    So it will be with MS. At the same time that Apple and Google are girding up for "Mobile Wars 2: The Wearening", MS has basically admitted they couldn't even compete in Mobile Wars 1. If they have any plan for the PERSONAL side of such future markets as HomeKit and HealthKit address, they've kept them pretty damn secret.

    MS used to (and for all I know still does) power parts of Apple's network infrastructure like the iTunes store. They can provide BACKENDS to things like HealthKit. But I don't see their consumer facing side as growing. (Which means I don't see what they think the endgame is for providing Cortana or Bing for iPhone and Android --- there's no money in running those as services.)

    And something no-one has mentioned --- what happens to the grand plans, announced two months ago, to be able to essentially just recompile your apps against MS libraries and mostly have a working MS phone version of you Android/iOS app?
  • BMNify - Thursday, July 9, 2015 - link

    Personal bias and choices should not blind oneself to the reality, Microsoft still has 90% Global marketshare in Desktop, laptops space and the growth rate may have slowed down but still almost everyone buys and uses a PC, so your first sentence "MS is irrelevant (to personal computing)" is just a pipe dream.

    And regarding recompiling of Android and ios apps, it is on the way as announced earlier, Windows 10 mobile is under insiders preview now and should launch in September or October along with all the said features.
  • texadactyl - Friday, July 10, 2015 - link

    "recompiling of Android and ios apps" is also a pipe dream. Many players in the computer industry have tried this exercise before (nothing revolutionary about it). It could many years (if it ever works) to get Android and iOS apps to work *acceptably* under Windows 37 (27 versions after 10!). By then, the world will have moved on a few times.
  • BMNify - Friday, July 10, 2015 - link

    This shows your ignorance about the platform you hate, Recompiling of ios and android apps is already a reality, Candy crush game in Windows Phone store is a recompiled ios app and the performance is so good that people didn't even notice it on low-end phones running on Snapdragon 400, those same tools will be available to all Developers with Windows 10.

    Source: http://www.windowscentral.com/you-have-been-runnin...
  • Alexvrb - Saturday, July 11, 2015 - link

    I can confirm that Candy Crush runs great on slow hardware, despite actually being recompiled from the iOS codebase. Tested it on an old Lumia 822. I hope more developers take advantage of this for Win10 and make Universal Apps out of them too.

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