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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  • Morawka - Thursday, July 9, 2015 - link

    hell apple should be afraid.. once people see tv ads of microsoft phones being hooked to a HDMI monitor and unleashing a full pc, everyone's gonna shit a brick and go buy one. apps will be fixed with windows 10 with the unified library. bluetooth keyboard and mouse ftw

    Windows 10 is gonna make Microsoft a lot of money, and make iphones look like mp3 players in comparison.
  • Morawka - Thursday, July 9, 2015 - link

    i predict we'll see more x86 windows phones as well. dont even need the unified bridge or whatever it's called with that.. Google dont wanna make a app for WP? well no problem, we'll use your x86 app.
  • pSupaNova - Thursday, July 9, 2015 - link

    Your not serious?

    We have heard this wait till Microsoft WP "insert a release" argument for years and all what happens is IO and Android get stronger.

    Windows Phone will be a money blackhole for Microsoft until they decide to can the whole project.
  • vortmax2 - Thursday, July 9, 2015 - link

    I don't agree. The situation now is clearly different. The software and hardware will be available to make this happen...if Microsoft plays their cards right.
  • Michael Bay - Thursday, July 9, 2015 - link

    Stronger as in total stagnation outside of piss-poor no ROI third world markets? Well, ok.
  • name99 - Thursday, July 9, 2015 - link

    You do realize that "full PC's" are cheap as dirt? We're living in 2015 not 1985.
    If anyone wants a "full PC" today, they can pick one up at the local Goodwill store; hell they can scan Craigslist and probably get one for free that's being thrown out.

    Full PC'ness is not suddenly going to become more desirable because it can be created in a messy configuration based on plugging a phone into a TV and attached a bluetooth keyboard.

    The story you are peddling solves a non-existent problem (the supposed high cost of PCs or something) and does not actually solve the real problem (that most people feel uncomfortable about PCs and they don't really understand all the layers of history and compatibility crap that have built up).
  • Mushkins - Thursday, July 9, 2015 - link

    Seriously. Your average smartphone without a 2 year contract subsidy is between $600 and $900. You can get a dedicated PC from Wal-mart for $259.98 that can do everything that smartphone can and more. Price is not an argument here, and plugging a phone into a dock to create some sort of laptop hybrid thing is not appealing.
  • pSupaNova - Friday, July 10, 2015 - link

    No your average very high end latest model smartphone is that price.

    Does your PC from walmart have A GPS, Cellular Modem, 8MP+ camera Gyroscope etc. Can it fit in your pocket does it run for 24hours without being tethered to a wall socket. No a normal PC is not as useful to the majority of people than your run of the mill $200 smartphone.
  • Zak - Wednesday, July 8, 2015 - link

    Are they staying in the tablet market or infuriating the entire world with Windows 8 was for nothing?
  • Michael Bay - Thursday, July 9, 2015 - link

    Where is your credentials for speaking for "entire world"?

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