Yesterday we looked at how Sony claim to be sticking with mobile phones, today Microsoft CEO Satya Nadella has announced major cutbacks for the Windows Phone division with Mary Jo Foley reporting in ZDNet that the company’s Finnish operation – containing the bulk of the Nokia operations the company acquired two years ago – is to lose half its staff.
Microsoft’s strategy around Windows Phone has always been problematic but should the company be winding down the product then it leaves a hole in the strategy of running Windows on all devices.
The bigger picture however may be that Nadella recognises the mobile phone hardware market offers little in profits and growth compared to the company’s cloud services and the potential for IoT products although the CEO claims devices are still part of the future.
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. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.
The culling of Microsoft’s product lines may well focus the company ahead of Windows 10’s launch however it also risks leaving critical gaps in the market.