Microsoft smartphones are dead: company fires 1,850 employees, announces focus on software development

Last week, we got the news that Nokia is staging a comeback to the smartphone business and will be licensing its name to newly formed company HMD Global, who will manufacture and sell Nokia-branded handsets. As you may know, this year, Nokia regains its rights to put its name on smartphones, while Microsoft still held on to the Nokia brand for feature phones. However, HMD went ahead and purchesed the rights to the Nokia name for feature phones, while Foxconn bought the facility where said phones were manufactured.

Microsoft, naturally, issued a press release, letting everyone know that it's selling its rights to the Nokia name as well as the factory in question, but the text contained a line that was a bit offbeat and its very existence in a press release that concerned feature phones raised some concerns. The line in question reads:

An odd choice of words there – it made it seem like Microsoft would be scaling down yet again, possibly focusing entirely on software development. Well, to the disappointment of many Lumia fans, it seems that is the case.

Executive VP of Windows and Devices Terry Myerson sent an internal letter to all Microsoft staff, letting them know of some impending changes within the company. Yes, you guessed it, Microsoft will be scaling back on smartphones again, which will, in Myerson's words, “impact up to 1,850 jobs worldwide, up to 1,350 of which are in Finland".

The VP then continues to explain how Windows 10 is currently installed on more than 300 million active devices, Surface and Xbox satisfaction is at a record high, and earlybird developers are loving the HoloLens (Microsoft's cool augmented reality, a direct answer to VR). However, the Microsoft smartphones continue to be preferred only by a small group of companies and individual consumers. For this reason, the company has made the decision to "focus" its phone hardware efforts.

Meanwhile, Redmond will continue its software development efforts for multiple platforms. The goal is to reach as many consumers as it can with its services, keeping its name on users' minds. It will also continue to work on the mobile version of Windows 10, looking to turn it into an appealing platform, which more 3rd party OEMs will want to build phones for.

So, in other words, Microsoft smartphones may not be entirely gone, but we can expect much less devices to come out of the company in the following years. The letter and press release shy away from talking about any work on hardware and instead insist that the company will focus on "security, manageability and Continuum". And what of the rumored Surface phone? Unfortunately, there is no way of knowing if it will ever exist.

You can find the official Press Release by CEO Satya Nadella, as well as the letter from the Executive VP below.

source: ArsTechnica



1. Mercedes-Benz

Posts: 403; Member since: Jan 18, 2015

It has been nothing but bad news since Nokia decides it's a god idea to bed micros**t

15. ph00ny

Posts: 2052; Member since: May 26, 2011

It's not like they would have survived without MS for this long. Their stock was bottomed out like 10 years ago

35. Johnnokia

Posts: 1158; Member since: May 27, 2012

"Microsfot and Nokia board" was the ONLY factor that killed the Mobile division and dragged Nokia to the hell. 1- Nokia didn't move fast when they saw a substantial decline in high end Symbian market share after the release of iPhone. 2- Nokia appointed the very wrong CEO after Olli-Pekka. 3- The new CEO called the "Burning Platform Memo". 4- Elop Killed Symbian at the time Symbian's market share was 32% (over double iOS market share now). 5- Elop killed the new OS MeeGo even before the release of its first phone N9. 6- Elop put all Nokia's eggs in the very immature WP 7 basket. 7- Nokia's market share dramatically fell after that and the only viable money source was feature phones. You are totally wrong because Nokia's stock was $40 at the time Elop took the helm, and it went to only $2 two years later. How Microsoft helped them, really? BB10 market share is going under 0.2%, but BlackBerry still refuses to announce its demise, because they still see some interest in it despite that small fraction. Imagine a company declare the death of a Mobile OS when it has 32% market share, or killing the new OS that they never tried! Nokia should've easily adopted Android since 2010 and made the transition and kept its position as the world largest phone manufacturer.

40. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

1. Symbian declined because it was not suited for smartphone use 2. Nokia's issue not MS, blaming this on anyone else other than Nokia is called blindefanboy 3. It was a burning platform. No body wanted Symbian, the market share you talk about is because of feature phones not smartphones, period. There was more to the burning platform than what you see. 4. Market share meant nothing in the smartphone race. How many feature phones are sold yearly? 5. Killed it because it was burdened with delay after delay after glitch. When Elop got there, he did a simple thing, bring me a phone that is ready to market with LTE under the Meego project (a 6yr project at that). There wasn't a single phone they could hand Elop, this is fact. So yes they killed it. LTE wasn't going to be implemented for another few years, well beyond the LTE phones hitting the market that year. Meego was DOA 6. WP7 was choosen because Nokia didn't have the cash nor ability to compete with Samsung at the time. They simply couldn't, you can lie to yourself all you want, but they were bleeding bad. Google was not going to pay them to build an android device. They looked to android FIRST. But screw facts. MS paid them, got their debt in order, unfortunately people simply didn't flock to it in droves like they wanted. How did MS help them? By sticking around, then paying off Nokias debt. Without MS, nokia would have been sold sooner and stripped sooner. MS let them keep their patents and the ability to make phones after the purchase. Ask moto how those patents went after google bought them out. This 'easy' adoption of android is nothing short of stupidity. There is nothing 'easy' about it. It takes money and time....Nokia had neither.

47. Rafishant

Posts: 398; Member since: Oct 13, 2015

"WP7 was choosen because Nokia didn't have the cash nor ability to compete with Samsung at the time" A complete false statement. By the end of 2010 (days before Elop came), Nokia had $22 billion cash reserve and it was number one in SMARTPHONE market share table. They were able to wipe the ground with Samsung if they had joined Android. Stop fooling yourself. Microsoft thought that with Nokia name, WP would kill iOS. They finally killed Nokia and happy to see them how they totally fail in mobile business now!.

58. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

You might want to do more looking into actual financials, you cannot claim inventories as cash on hand. FYI cash/bank holding of 1.7billion in 2008, as of 2009 it was 1.1billion. in 2010 and 2011 it was 1.9billion in 2012 3.9bil as for you last statement, In many markets they had, WP had taken over iOS in many markets, except overall global because of the USA market

50. XperiaFanZone

Posts: 2278; Member since: Sep 21, 2012

I've been saying the same thing you said on your last paragraph over and over again to him yet he is still bitching like a woman even after five years, denying that Nokia would have sunk faster w/o MS

52. Rafishant

Posts: 398; Member since: Oct 13, 2015

I don't know why are you following him eveywhere. It is probably you want his D? Lol

68. yann

Posts: 614; Member since: Jul 15, 2010

1. Symbian creates first smartphones. Not iOS, not Android. 2. Yes, Nokia was blind too long to see the big picture of future comunication, but definately Elop bring them in totally wrong direction. Symbian was lighter then any OS on the market at that time - on my Nokia N8 I had perfect 12MP camera, that was monster at the time. I had FM transmitter, working in real multitasking - listen music on my car radio, sended via FM transmitter, sing MAPS in the same time, lowing down the music when there was mark or note by navigation and taking phone calls. That was impossible for iOS or Android at that time. The Symbian needed refined UI. The functionality was better than other platforms. Also Elop intendenly killed it to direct Nokia to Windows 7 - the biggest mistake. Nokia had the money and all Nokia users wanted after Symbian to switch to Android, but Elop was troyan horse and bound them to Microsoft. After that alo know the facts, but Microsoft is the only guilty that burned Windows phone. They delay every single time - even now there are people waiting for Denim update on their ICONS etc. Microsoft eating now it's own fruits. P.S. Sorry for my English.

78. zunaidahmed

Posts: 1185; Member since: Dec 24, 2011

I doubt symbian should be called a smartphone os, even though it technically was, but it was not suitable for it. I still remember only a hand full of symbian devices had multitasking while most was a headache to even install so called apps

41. DoggyDangerous

Posts: 1028; Member since: Aug 28, 2015

Its history now, which cannot be corrected... Good move from microsoft, they should not enter in the mobile from biggenning... Microsoft killed Nokia for nothing... I am happy to hear this news

44. ph00ny

Posts: 2052; Member since: May 26, 2011

Ok 10 years was an overstatement but they fell below $10 a share from nearly $40 per share around 2010 and gradually fell below $5 a share and never recovered. Look at the stock prices just before MS acquired them hovering around $3 a share

45. Mercedes-Benz

Posts: 403; Member since: Jan 18, 2015

Not to mention that e flop launched windows phone 7 handsets months before windows phone 8 came out and make windows phone 7 obsoletely making early nokia+micros**t adopters mad

66. krystian

Posts: 423; Member since: Mar 16, 2016

Nokia was dying. It was bad news for MS to even purchase them. A really bad decision. But either way MS will continue making devices, but not mere phones, more business oriented devices like their surface book/surface pro and likely a pocket sized folding tablet/phone

2. Odeira

Posts: 300; Member since: Jun 29, 2012

Basically, Satya and the gang just said that "Microsoft's Mobile efforts must die so that Minecraft can live. That's our focus right now." SMDH

31. SuperAndroidEvo

Posts: 4888; Member since: Apr 15, 2011

Long live Minecrack!!! +1


Posts: 417; Member since: Sep 29, 2015

So nobody going to mention that they said new great devices? I believe Microsoft is cutting so many people so they can have the a small team like the surface team develop everything which the team will have a shared vision. Panos must be cooking something great in the basement with Walter. Surface phone will rule them all.

4. Odeira

Posts: 300; Member since: Jun 29, 2012

"New devices?" "They'll be cooking something great?" At the current state and priorities of Microsoft, I'd have a higher chance of seeing a Unicorn, but whatever. They've GIVEN UP IN ALL BUT NAME. End of story...


Posts: 417; Member since: Sep 29, 2015

The first unicorn you seen was the surface pro the second unicorn will be the surface phone being able to adapt to any screen. In your car dash all the way to imax screens. In Panos we trust.

29. Acdc1a

Posts: 475; Member since: Jan 21, 2016

Good luck. Microsoft will screw the pooch on this one too.

21. rishav20193

Posts: 242; Member since: Jul 18, 2015

exactly what i was thinking !! panos panay will lead both surafce tabs & surface phone teams !! & the new phones will come under suraface branding !! & it will just be what MS does with surface !! launch an awesome phone with the latest OS & then let OEM'S make other phones with similar functions. (just like OEM'S are launching competitiors to surface 4)

37. meanestgenius

Posts: 22213; Member since: May 28, 2014

People here (and everywhere, for that matter) love sensationalism. They only see "Microsoft smartphones are dead" and run with it. Most will not pay attention to the part where he said "we're sacaling back, but not out!" concerning smartphones, or the fact that he said they were going to make great new devices. Most don't want to see the bigger picture: Microsoft is playing the "long game", and they want to start fresh with a new smartphone line under the name "Surface".


Posts: 1168; Member since: Oct 05, 2015

Exactly. Sensationalist journalism sickens me.

53. PenTiltoKet

Posts: 552; Member since: May 18, 2016

In a couple of months, BB will say roughly the same message.

62. meanestgenius

Posts: 22213; Member since: May 28, 2014

BlackBerry has absolutely nothing to do with this article. As trolling goes, that was pretty lame.

5. BradyCrack

Posts: 835; Member since: Dec 29, 2015

I like to be as positive as possible. But Microsoft? Give up. You have plenty of products, it won't make a different.

6. FBIsurveilance

Posts: 43; Member since: Aug 10, 2014

well, all is well, though. Just as we thought, Nokia phones are returning again under HMD global, and manufacturing is handled by Foxconn with proven track record on producing great hardware. All in all Nokia is like winning a lottery of $7 billion, money it can use to boost their return quickly, without having to bear the penalty of slimming down their facilities or number of employees. Look, in that 1,850 employees, some could be the guys who was responsible for PureView and if Nokia wanted to have any competitive advantage at all would be happy to take them back. I expect great insurgence from Nokia as a well funded smartphone maker startup. Meanwhile Satya had a headache of offloading an incompetent executive in the name of Eflop, and he wished he could find a way to fire him without rewarding him with any golden parachute whatsoever.

7. Diego!

Posts: 876; Member since: Jun 15, 2009

So Windows 10 Mobile will no longer exists? I hate Microsoft! I loved Windows Phone 8 & 8.1, Windows 10 Mobile is buggy as f*ck and there haven't been any updates since I bought my phone in January

8. paul.k

Posts: 296; Member since: Jul 17, 2014

Microsoft will continue working on the software. But the hardware's future is... questionable

22. rishav20193

Posts: 242; Member since: Jul 18, 2015

i dont think its questionbale !! it willl be just like surface line !! one flagship phone..........& keep on improving the software !! & let oem's manufacture phones !!

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