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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  • Impulses - Wednesday, July 8, 2015 - link

    Where did they state 6? And why so many? 1-2 flagships (like the iPhone, Z3/Z3c, etc), 1-2 value models, and a solid mid tier is more than enough... Seems to me they should be able to cover everything with four, mayybe five.
  • BobSwi - Wednesday, July 8, 2015 - link

    We'll see, but 'experiences' and 'services' don't sound like phones, at least Windows fans will get 'devices' (surfaces?) heh.
  • BMNify - Wednesday, July 8, 2015 - link

    Read the first two lines: "we can differentiate through the combination of our hardware and software" Hardware in mobile phone division means phones.
  • khanikun - Thursday, July 16, 2015 - link

    Shrink the Surface 3 into a 5" tablet, add in cellphone service and texting. Call it the Surface 3 Phone. I'd buy it.
  • zodiacfml - Thursday, July 9, 2015 - link

    Oh, finally. Their mobile devices are too many to keep track. They function as a mobile device maker but Microsoft isn't like that and Apple isn't like that which Steve wants to emulate. Like Google and Apple, MS should focus on the operating system then work on one or two models of each class of a device.

    I feel for Nokia and their employees though. This is a waste of many things. Nokia will start anew and get back some of their employees.
  • Michael Bay - Thursday, July 9, 2015 - link

    I`d like to know what happens to maps in WinMo.
  • BMNify - Thursday, July 9, 2015 - link

    There are no changes to maps: you have Here Drive and Here maps from Nokia and Bing maps too which uses data from Navtaq but still there is some different between the two. Apart from these you can get other map apps in windows phone store.
  • name99 - Thursday, July 9, 2015 - link

    Jesus freaking christ. So the phone more or less naturally comes with TWO map systems built in?
    That's the story of MS in a nutshell right there... Pathological inability to focus and make a decision.
  • BMNify - Thursday, July 9, 2015 - link

    No need to swear on Jesus here and providing two apps as OPTIONS is the best thing to do for the customers, you are just nitpicking just for the sake of it besides windows phone allows you to uninstall preinstalled apps with just single click unlike other OS's , if it was your favourite OS then you would be singing praises for such a thing, specially when you consider the fact that you get free Lifetime voice added navigation with every windows phone along with the ability to download the maps for the entire country, continent and even World at once with no need of data while travelling.
  • Michael Bay - Thursday, July 9, 2015 - link

    Your jumping to conclusions is pathological.

    _One_ map system, with separate directions app developed by Nokia that leverages stock maps on the platform.

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