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Microsoft is "streamlining" its smartphone business, axing 1,850 jobs and charging off $950 million

By Shawn Knight
May 25, 2016
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  1. Microsoft last week sold off its feature phone business to FIH Mobile, a subsidiary of Foxconn, for $350 million. The move all but signaled Microsoft’s departure from the mobile device business and now, the final blow – at least with regard to Microsoft’s disastrous purchase of Nokia – has been dealt.

    On Wednesday, Microsoft announced plans to “streamline” its smartphone hardware business which will in turn eliminate 1,850 jobs. Microsoft said it anticipated the reduction of up to 1,350 jobs at Microsoft Mobile in Finland and another 500 globally.

    The restructuring will result in a one-time charge of $950 million which includes roughly $200 million for severance payments.

    Satya Nadella, chief executive officer of Microsoft, said in a statement that they are focusing their phone efforts where they have differentiation — with enterprises that value security, manageability and their Continuum capability and consumers who value the same. Nadella added that they will continue to innovate across devices and on their cloud services across all mobile platforms.

    The writing has been on the wall for quite a while now. Microsoft, then under the leadership of Steve Ballmer, purchased Nokia’s mobile division for roughly $7.2 billion in late 2013 but has been unable to generate any respectable market share with its Lumia brand.

    It’s not so much that Lumia phones were bad – Microsoft, like Blackberry, was simply too late to the game. By the time these companies got serious about smartphones, companies like Apple, Samsung, HTC and LG had already established solid roots within the industry and with consumers. Now that major markets are cooling as a result of saturation, it becomes that much more difficult to become a true contender.

    Lead image courtesy Emmanual Dunand, Getty

    Permalink to story.

     
  2. Win7Dev

    Win7Dev TS Evangelist Posts: 567   +174

    They weren't too late. The product just kind of sucked. No apps. No integration with common enterprise services. No low price to compensate for lack of features.
     
  3. yRaz

    yRaz TS Evangelist Posts: 1,906   +954

    If you remember correctly, the iPhone and android didn't have apps either when they started. And there were plently of low price phones. I have 2 lumia 520's that I picked up as backu phones for $25 ea. That was new in the box. Everyone was too concerned about "apps" to adopt a platform that was actually much better than android, creating the app crisis.

    Android, as capable as it is, is a pretty garbage OS. If my work didn't require me to have iOS or Android then I'd still be using my 1520.
     
    toxicfiend likes this.
  4. meric

    meric TS Enthusiast Posts: 62   +30

    I still use a lumia 720 which does me enough good for most of the things I do. The only limitations that I was aware of by the time I got this was the lack of certain apps in store and limited RAM but lately they were publishing enough apps to close the gap with other platforms. While the phone has some bugs relevant to the limited amount of RAM (causes internet explorer and some apps to crash randomly etc) it's generally really fast in menus and other stuff. But I don't use it for media sharing so heavily anyways
     
  5. MoeJoe

    MoeJoe TS Maniac Posts: 401   +208

    A Lumina 640 for $30 makes a great Zune-type replacement.
    Not audiophile by any means but a certain low-cost option for everyday use.

    Beyond that ... Microsoft Windows Phone is bust.
    Good riddance.
     
  6. tonylukac

    tonylukac TS Evangelist Posts: 1,310   +56

    They never got android apps to work until windows 10, I guess. Now they'll never work. After all that extra code in consolidating windows for pc and windows phone. Never to be removed as windows 10 is the last windows. This is why batman takes 12 gig. At the city of la mainframe we had 5000 police cars on 10 meg of memory. Written in assembler, why didn't they do that?
     
  7. seeprime

    seeprime TS Member Posts: 33   +16

    Three years after the iPhone came out and was now growing it's app store, Ballmer said that it was "still early in the mobile space". He had no idea how wrong he was. If he had a sense of urgency, and built an infrastructure that would have had carriers happily pushing Windows instead of fighting it, I believe things would have been quite different. They are what they are because Steve Ballmer misread the market and thought Microsoft's snails pace of mobile development was good enough.
     
  8. JetFixxxer

    JetFixxxer TS Enthusiast Posts: 37   +6

    I'm still using my Icon and most likely keep on using it until it either breaks or just dies.
     
    toxicfiend likes this.
  9. Rippleman

    Rippleman TS Guru Posts: 563   +178

    MS, give me $10 million per year over 5 years and I can turn your mobile division around for you. I would embed 100 programmers (1 MS programmer per 1 company) at my expense to the producers of the top 100 IOS/Android APPS for a term of 5 years to work along side, and create, a windows phone app equal too the competitors equivalent. If MS had the top 100 apps, people would would actually consider a MS phone. Considering their price point advantage, I don't think there would a reason to buy another other phone other then a windows phone. Give me a $5 million in MS stock for my wage and we will call it a done deal. Your welcome.
     
  10. toxicfiend

    toxicfiend TS Enthusiast Posts: 30   +10

    Same for me with my 930 when it dies then I will replace it.
     
  11. likedamaster

    likedamaster TS Enthusiast Posts: 86   +12

    At this point, I sincerely think it is not failing for anything else but the culture that it has built within itself... everyone trying to do & say the right things trying not to lose their job causing innovation to suffer.
     
  12. Phr3d

    Phr3d TS Booster Posts: 242   +43

    The emperor had no clothes..
     
  13. captaincranky

    captaincranky TechSpot Addict Posts: 11,702   +1,886

    The impression I had of Steve Ballmer, was that the only time he ever opened his mouth, was to change feet. More or less a mentally challenged individual, who could only charitably be described as "high functioning".

    Bill Gates is now being lauded for his "charitable works". Everybody overlooks his most charitable act, which was to allow Ballmer to become ungodly rich, by riding his coattails for a couple of decades.

    And yes boyz and gurls, this is the same "lovable" numbskull who signed off wholeheartedly on Windows 8.(point zero)
     

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