14 DAY TRIAL // Microsoft is doing one of the biggest restructuring processes in its history, and this involves the layoff of 7,800 people, most of them from the phone hardware division, after previously cutting no less than 18,000 jobs following the takeover of Nokia’s Devices and Services unit.
With the future of Windows Phone now in balance, many believe that Redmond should actually give up on its mobile efforts and focus on something that makes more sense profit-wise, including building Windows and offering cloud services.
But on the short term, Microsoft doesn’t want to give up on Windows Phone, although there are some hints that Windows 10 Mobile could be the company’s last attempt at the mobile industry.
A company insider cited by Bloomberg claims that Microsoft plans to make its own phones for at least 2 more years, which could be an indication that after these two years, the software giant could give up on Lumia devices entirely and rely on the Windows ecosystem for phones that would run this software.
Decrypting the message
And Satya Nadella’s internal memo for employees indeed suggests that such a plan is possible. Here’s an excerpt from his email and the emphasis is ours:
“I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.”
So first, we have first-party phones, which is a clear sign that Microsoft still wants to make phones, at least for now. Nadella also mentions the Windows ecosystem, but including Microsoft’s own devices.
The email then goes like this to detail the short-term strategy:
“In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group.”
So yes, on the short term, Microsoft will build its own phones, there’s no doubt about that, especially because several devices are already in production and projected to launch later this year with Windows 10 Mobile.
Nadella then discusses the long-term plan, which one against brings up the Windows ecosystem:
“In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly.”
If the company insider is right, this could indeed be the plan. Microsoft might stop making its own devices and adopt a strategy that reminds of the pre-Windows 8 approach when partners were building PCs, tablets, and laptops running Windows and Redmond was the provider of the software. That all changed in 2012 when Microsoft became a hardware maker and launched the Surface RT, thus turning into a rival for its own partners, but with a new CEO at the helm of the company, the company might be rethinking this strategy.
So if this worked for PCs, it should work for phones too, right?