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Microsoft's restructuring of their phone business was necessary, obvious, and good for Lumia

This morning, Microsoft announced that 7,800 employees, mostly in the phone division, will be let go from the company. Moreover, they are taking a $7.6 billion write-down of the company's acquisition of Nokia's Devices and Services division from 2014. Putting aside the sad fact that nearly 8,000 talented people are being let go very soon, the rumor of a write-down had been circulating since Microsoft's last investor meeting and is not a surprise.

There is no real positive way to spin the write-down news, but it is also not unheard of in business. Nor is it clear what the alternative to buying Nokia at the time would have been.

Nokia was already in dire straits, and their board was getting itchy for alternatives. Had Nokia decided to jump all-in on Android devices – or worse – sold to a competitor, neither would have been good for Microsoft and their Windows Phone story. Since Nokia Lumia phones account for 97 percent of all Windows Phones out there, Microsoft had a gun to their head. What would have happened if Nokia fell into Samsung, LG, or even HTC's hands?

Microsoft is not Nokia

The big take away from Nadella's letter this morning is summed up in one quote:

"We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family."

I mentioned exactly this point in my last screed about how Microsoft needs to cut back on its Lumia portfolio. The reasons for the reduction should be obvious: There are just too many Lumias with overlapping features and price points.

Microsoft cannot control 97 percent of the Windows Phone market and expect their OEM partners like Samsung to want to make Windows Phones

That last point is what Nadella is referring to when he states Microsoft is changing from a "standalone phone business to a strategy".

Nokia had one mission: create the best Windows Phones on the market and outcompete Samsung, LG, HTC and others. They were wildly successful. Samsung went from the top Windows Phone device maker to a distant second within just a few quarters, and HTC dropped from 8 percent Windows Phone shipments to less than 5 percent back in 2013. HTC now ships less than one percent of all Windows Phones. Companies like LG gave up on Windows Phone, only to tepidly return to Verizon with a single lower mid-range device, the LG Lancet.

However, Microsoft is not Nokia. Nadella does not want the company to own the Windows Phone market. The reasons should be obvious: Microsoft does not control any hardware market. Microsoft could develop and sell a whole line of "Surface" PCs from laptops to desktops to small tablets. Instead, they purposely limit what they offer ensuring to not offend their hardware partners.

Even that limited-engagement strategy worried companies back when the Surface was first announced. Since then, companies like Lenovo, Dell, and HP have made some of their best products yet. Even more interesting is how Microsoft is lending engineering assistance to those firms.

Owning the whole Windows Phone hardware chain is not Microsoft's intention, nor should it. Creating so many Lumias models on a regular basis is just something Microsoft is not set on doing.

So what is Microsoft's stratagem? To again quote Nadella from today:

"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."

Focus on your strengths

Despite all the terrible and uninformed articles written in the last weeks of June, Microsoft is not "dumping" Windows Phone, selling off their Lumia hardware division, nor switching to Android. Of course, the damage is done with many laypeople now believing such tripe.

However, Nadella did emphasize that Microsoft was committed to their "first-party devices including phones". This change is so they can shift from a standalone phone business model to a "strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family".

More importantly, Nadella defined three areas in which Microsoft will build Windows Phones:

  1. Business hardware
  2. Value phone buyers
  3. Flagship devices

I am not sure what part of that we are supposed to read as bad or how those in the press can spin this as nothing more than a profound decision.

Bring back enterprise

For one, business is obvious. Enterprise is Microsoft's bread and butter, and you can make a very strong argument that enterprise functionality has been sidelined too long on Windows Phone. This is an ironic position for Microsoft as Windows Mobile once was the major competitor to BlackBerry in the business market. Now, Windows Phone is often a second-class citizen due to the non-leveraging of Microsoft's enterprise services and the rise of Bring your own device (BYOD) and the iPhone at work.

The idea that Microsoft is going to focus on this area for hardware differentiation in their Lumia line is fantastic. Maybe we will see Microsoft finally use some of those funky keyboard patents? BlackBerry brought back the 'Classic', so why not do something similar for businesses? What other company is purposefully targeting enterprise with such specific hardware and software?

I see an opportunity here and finally so does Microsoft.

There are a lot of budget Lumias

Nokia sold many low to mid-range Lumia phones. In fact, sales in emerging markets for Windows Phone are excelling for 2014 and 2015. Microsoft knows this and their recent releases of the Lumia 640 and Lumia 640 XL demonstrates they can still capitalize on this market while delivering excellent products.

Considering that over 60 percent of Lumia phones on the market costs below $200, Microsoft focusing on this area still means many Lumias will be created to meet that demand and keep the momentum going.

This decision is not a retreat, folks. Had Microsoft given up on this market, not only would it be suicide it would decimate the Windows Phone and Lumia line. Instead, we will get more excellent hardware like the Lumia 640 and Lumia 640 XL. I am quite happy with that strategy too.

Flagships are coming

At this point in the rumor game, it should be clear that Microsoft will have two major phones coming out later this year. Codenamed Talkman and Cityman, the phones are expected to be the next Lumia 940 and Lumia 940 XL respectively.

Lightweight, matte colors, high-end 20 MP cameras, and excelent build quality. Oh and they can act as a PC by adding a display, keyboard, and mouse aka Continuum.

Those phones are still coming and today's letter from Nadella just reinforces what his executives have been saying since January: we will release flagship Windows Phones that highlight Windows 10. In fact, last night we saw the leak of some new hardware accessories coming from Microsoft, including one for Continuum to coincide with the fall launch.

This announcement is not a change in strategy. It is keeping the same path announced seven months ago.

Microsoft knows that creating hardware that highlights the main features of Windows 10 is the key to their success. They used the strategy with the Surface line, and they will do it with phones too.

Once again, this is nothing but good news.

The takeaway

The loss of nearly eight thousand employees is not insignificant. These are real people who now need to find new work in an already tough market and economy. What was once Nokia's mobile hardware division is now just a small core of employees working for Microsoft. Let's not forget that there are real people being affected by today's decision. We wish them nothing but the best.

Microsoft's strategy for Windows Phone is becoming clearer and more precise. This specificity is a magnificent thing for investors and analysts who now know what Microsoft's plans are for mobile.

No, it is not dumping Windows Phone. No, it is not switching to Android.

Instead, Microsoft has chosen three key areas where they think they can compete and offer excellent products: enterprise, budget devices , and flagship phones. That is a significant chunk of the Windows Phone market and, to be honest, brilliant choices that leverage Microsoft's strengths.

The rest of 2015 will be exciting for Microsoft and Windows 10, but Microsoft's realignment is exactly what the Lumia line needs. Consumers can expect first-class business phones, quality budget Lumias, and high-end flagships that will satisfy Windows fans.

I don't know about you, but I like the sound of all of that.

Daniel Rubino
Daniel Rubino

Daniel Rubino is the Executive Editor of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft here since 2007, back when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and arguing with people on the internet.

  • Agreed.
  • Daniel here likes it when people get sacked from MS.
  • Did you even read the article before commenting? Seems not...
  • Even I think so he hasn't even seen the article and jumped up here .!!! Danny ain't happy and gas also mentioned the wishes for the best soo plz do the honours of giving the article a read .!! :)
  • Actually I did. I learned speed reading back in the 70's when it was all the rage. But I also think that I may have opened the app just as his article posted. In fact I am just as surprised as you to see that my lowly comment is the first one.
  • The comments were actually directed towards Pallav, because he thought "Daniel was happy" about the massive layoff, which of course is stupid.
  • Stop talking rubbish please.
  • Sacking people is a normal part of business. No one likes it but it has to be done sometimes. Every company has to evaluate its business every once in a while and determine if resources are being used wisely and if strategic decisions are working. Sometime they determine that they have more employees than they need to create their product and that makes their cost structure too high.
  • I view a bit different.  MSFT gave all these employees several years of stability.  Does anyone think NOK would have survived without the hundreds of millions of dollars MSFT paid NOK to produce windows Phones?  MSFT was prudent and patient with NOK and its employees.  MSFT let NOK try the NOK feature phone strategy with Mobile Phones.  But NOK failed because they don't understand the difference between a 21st century ecosystem and a 20th century industrial market.  iPhone created the smartphone market with a SINGLE SKU.  MSFT let them try their hardest to transfer their success with feature phones into smartphones, but NOK failed.  How much did MSFT pay the employees and the shareholders of NOK for a failing strategy?  BILLIONS.  While I understand the average corporate worker believes a job at NOK is a job for life, people like me in the real world understand that each day is a chance to get fired, hired, or start a new business. This does not excuse MSFT for failing to grasp mobilty much sooner.  Of course we all cannot fail to mention INTC in missing mobile.  Have you all noticed that Mrs. 386 at INTC has moved on to bigger and better things?  Don't you think this is an indication that INTC has finally decided to find new leadership to get its mobile smartphone chip business up to speed?
  • No other OEM except NOKIA is successful with Windows Phone. You probably haven't seen the value of NOKIA. Come to India. Here its like only NOKIA manufactures Windows Phone. I haven't seen people using Windows Phone from any other OEM here. So I don't think its NOKIA's fault that Windows Phone is failing. Had NOKIA used Android in its phones, it would have been fairly successful. I have seen a lot of people wanting a NOKIA, but have never bought it since it has Windows Phone OS.
  • Nokia is doing pretty good now, without Microsoft, as a services and maps company. After duming thier loss making manuacturing operations on a dumb Microsoft,  Nokia will be re entering SmartPhone design and lisencing next year. Obviously those will be Android phones. Nokia Android phones will outsell Windows Phone, because Nokia has great Global Brand in phones. Microsoft hasn't which is why Windows phones sales declined AFTER the Nokia takeover.  If Nokia had switched to Android earlier perhaps a lot more Nokia production staff would still have jobs today.  
  • this DDN We shall see if Nokia can compete in Android.  The Chinese have had a huge start.  India is one market (albiet with much promise).  Windows Phone does command significant market penetration in many countries.  If Windows Phone had 10% of US market,  the story would be much different.  Will Windows 10 and MSFT new focus build a stronger ecosystem?  I believe so.  NOK can design and license android and Windows Phones.  They will see where the market takes them. 
  • I think Nokia will do well with Android because eveyone knows Nokia is a solid, quality device.  But, their success will depend on what kind of oem skin they put on Android.  Touchwiz, Sense, etc are loved by some and hated by some. Nokia needs to bring a really nice, well thought out UI/skin to android, and they will do well.   
  • What'll happend if nokia falls to samsung? We'll see more plastic cheap devices with decent camera :v
  • So a S6 edge running Windows??? I seriously just don't understand the hate for Samsung. Yes, Lumias are nice, but they're not s6 edge nice.
  • Depends on what you use as a metric for nice... If you look at Durability or Camera Quality, there are  Lumia devices sold in 2012 2013 that are nicer than the S6 Edge.   In terms of performance, the rather old 1520 using Windows' DirectX can pull out some amazing 3D performance numbers that the S6 can barely top even with a significant GPU boost.   This doesn't mean the S6 isn't a great phone, it just means different things are important to different people. Let's just encourage Samsung to bring the S6 in the WM10 family, as they did their revised S4.
  • Dude, I dunno. The S6 Edge's camera is one of the best I have used on any device lately in 2015, even against Nokia's. Secret: all of those photos I used for the E3 Microsoft Live Blog were on the S6 Edge. That phone is amazing but Android/TouchWiz ruin it, imo.
  • Agreed. I have the S6 Edge and despite the poor battery performance I won't give it up because of the camera. I really hope that the larger of the 2 coming flagships makes it to T-Mobile (which scares me given T-Mobile's track record). I am waiting to compare "Cityman" to the next Galaxy Note. My L925 is getting pretty long in the tooth...
  • can definitely agree here, the clarity and crisp of the S6 camera surprised me. It left my 925 in the water -_- my little brother has a better camera phone than me lol dammit.
  • I'd actually buy the S6 Edge if I could flash w10 on it, it ticks every spec I want, even some kind of glance screen and qi charging
  • Let's not forget that Samsung produced one of the best WP phones in 2013 (yes it was out in December 2012) the ATIV S. That phone even today running latest official WP8.1.1 + Samsung firmware is a great phone, smooth as silk. Too bad it was poorly advertised, but whoever got that phone absolutely loves it (including me, cuz it is my main daily driver now), I don't see any reason to replace it. It would be awesome if Samsung produce a sequel as maybe ATIV S2, I would buy it in a second, no matter how much it will cost. :)
  • Ah Nokia Dropped the camera ball with the 930, and lack of 1030... 930 is 20mp yea sure but the OIS is shocking meaning the zoom feature is useless with anything but a rest/tripod, and dark shots are just average. The colors are ok but nothing special. 920 and 1020 are still highly rated sensors, but under par compaired to the s6, the 930 doesn't even reach the 920/1020 standard... PureView used to be a marketing hammer... not so much now
  • hmm most of what you said is simply false. Yes obviously the 930 is no match to the 1020 camerawise, but it is way ahead of the 920 in averything except low light performance. "OIS is shoking meaning the zoom feautre is useless with anything but a res/tripod" This sentence simply makes zero sense, since zooming in has absolutely nothing to do with OIS. I have a 1520 and there is nothing wrong with the OIS.
  • Daniel Rubino, I do agree with you, the S6 camera is amazing and so is the design but the software experience is awful! 
  • Well the article sums up quite of forcoming changes.! The job lay offs quite hurt up since its a tough economy as the articles also mentions it though .!, but maybe something is off for betterment of company in satya's opinion .! The concept of three segments is really awesome i was stunned on the part WTF is microsoft doing by releasing plethora of handsets of same price range , same specs ... And almost same in eyes of the consumer who sometimes fails to distinguish :P(there is actually this type of consumer ) the business,the flagship ,the value buyers its really good to work upon this limit ! I will go with the flagship ;)
  • Please explain why feature phones had so many variations within the same market position?  How did NOK sell so many different types of phones around the same price envelope?  Maybe because NOK doesnt understand an ecosystem.  The smartphone is just a window to enter the information pipeline.  The apps provide the differetiation not the shape of the phone or the various buttons.  NOK is an old time industrial company unable to migrate its strategy and operations into the 21st century.   I think MSFT gets it and Windows 10 will be the first enterprise to desktop to tablet to smartphone OS, which should allow hardware manufactures and software developers one vehicle to transport countless customers into the information economy. 
  • The only thing that comes close to Lumia's as far as hardware quality is the iPhone -Sent from my HTC One (M8) for Windows
  • Have you guys who are dissing the S6 Edge actually used one for a while, are you just saying it sucks based on your impressions? I own an S6 Edge, a Lumia 930, and a Nexus 6. Lumias are very nice, but the S6 Edge is one of the most beautiful devices I have seen, and it's camera outshines even the Lumia 1020, and is super fast to boot - especially with Android 5.1.1. It has plenty of other issues, but lets not shoot other devices just because we love Windows Phones.
  • Edge's performance is totally irrelevant to me when it has Google inside. 
  • Yep, and moreover, I would return to Windows Phone (oh yeah!) and given up this Android device. Yes, they have decent performance, but as per Lollipop update, even with dual-core Intel Atom and 2GBs of RAM can't handle it enough. Missing those moments with the Snapdragon S4 with 512MBs of RAM... :(
  • Exactly! :-|
  • I am honestly not a fan of the Edge.  I find the curved edge thing a bit gimmicky in actual use.  Give me the standard S6. Style-wise, that is quite a looker in terms of just the design. 
  • My wife has the edge and my Xperia Z Ultra is faster than her phone.  The edge looks and feels nice, but I'd never want one since it can even keep up with my 2 year old phone for day to day web stuff.
  • I agree. Not sure what some people whining about Samsung for. Samsung was making Windows Smart phns YEARS BEFORE 2007 iJUNK, and Android came to market, like Samsung i700 Pocket-PC phn that was really awesome and way ahead of its time. Samsung also been making phns since the 80's, and has LOTS of experience in this field. However, due to CrApple's BS lawsuits, just to brainwash average, unknowledgeable users, to think Samsung always just sitting around and copying CrApple's bendable garbage, overrated iJUNK phns, which samsung makes many parts for them,(since crapple does not own ANY factories, nor they make anything whatsoever).. In addition, these people will NEVER hear, how many lawsuits Samsung has WON over CrApple, since media in this country is owned by CrApple. I would LOVE to see Samsung devices in Windows 10 as well, along with LG, SONY, OPPO, Lenovo, ASUS, HTC,........ This will give people plenty of choices. I know lots of people like their current Android phns, but do NOT like "we spy on you" Google's Android. I believe these people would switch in a heartbeat, if they could switch to Windows. I personally love to get the next Samsung Note 5, or Oppo in Windows 10. Choice is good.       
  • iJunk, CrApple...
    Any good point you made was lost when you used those stupid monikers!
  • Amen!
  • The popularity of S6 edge is because it did innovation on design with edges, what people want when they purchase a new device is something that doesn't look like the last year's design but with better specs (think of HTC One M9 vs M8). Another example but on PC's is the XPS 13 which is almost bezel less, so consumers are now expecting laptops to have thinner bezels, and smartphones already did it with the S6 edge. But why I bought a laptop that had the same price as the S6 edge? Because the S6 edge comes with Google apps and services which I don't like, if the S6 edge came with Windows I would buy it since I'm a Windows enthusiast.
  • @luniboy26:
    Can haz ATIV S 6 edge, pleeze?
  • you have a  piont  there. a SAMSUNG s6 OR s6 EDGE  with a Windows 10 OS in it would be a nice smart phone some Windows smart phone fans would buy for sure.  
  • I tried out the S6 and the S6 Edge and the non-Edge honestly seemed nicer. I wasn't impressed with the S6; it felt oddly-weighted and was just ugly.
  • Why would have SameSung even bought Nokia..? They have a lot of plastics of their own.
  • Patents. Talents. Know-how.
  • Nokia didn't sell any of their patents, not even to Microsoft. They only licensed tham.
  • @Daniel Rubino:
    Eh, dunno. Microsoft obviously wasn't in quest for talent either...
  • Microsoft wan't in a quest for any part of Nokia, Balmer was... Now that division has to conform to Microsofts business plan which doesn't include the actuall manufacture of phones leading to 20,000 less employes and a phone devision who instead of owning the segmant they are in, aren't allowed to compeet properly in it... My god i wish MS didn't buy Nokia's phone busniess
  • "My god i wish MS didn't buy Nokia's phone busniess" Why, you wanted those people to be out of jobs 2 years ago?
  • Eh, its wasn't a buy or Nokia closes situation... The only reason Microsoft bought them is because they were scared that Nokia would switch to making Android at the end of the year... MS didn't want to loose a 97% marketshare OEM... its the only reason... Nokia posted first profit since going to WP so no they wouldn't of been out of a job 2 years ago... In fact theres a good chance WP wouldn't be in the baren wasteland its in now, We'd have more Nokia's, HTC and Samsung wouldn't of been completely scared off... Would of had at least 2 flagships out by now pushing WP into the spot light, selling more phones.... i can tell you now even if Nokia did restucture, they wouldn't of cut 20,000 jobs... Microsoft doesn't want to be a manufacturer so its selling the manufactuerer plants and laying off all the people to do with that end of the business... Basically all of what they bought off Nokia I know, i have great business stratagy, lest spend $7 Billion on half of Nokia, so we control WPs biggest (and only) OEM.... Now that we own it, lets stop making phones.... Yes loads of sense...
  • Microsoft still makes phones. Where do you get that stuff from?
  • Totally agree, the idea that they can sit back and let OEM's make windows phone now is hopelessly optimistic. Without Nokia windows phone would have been dead, Samsung were never interested in pushing it because they owned Android, HTC were semi interested, but Android was a bigger prize, and the others were all mediocre. Buying out one of the best mobile phone companies and then laying half of them off is a great way of burning large sums of cash while losing market share.  Competitors are always welcome to WP and Microsoft have never denied them a chance to compete, but they won't come unless windows phone is successful at this point.  With the new CEO's latest actions I doubt that will happen, he is a software guy who has no idea of the value of hardware.  It is all very nice maximising cash return, but the lower profits that old Nokia were providing were underpinning a lot of the companies future business, I hope Microsoft can get someone who invests in new business here, as the current guy seems to think that they can fall back to operating systems and office software and still rake in record profits endlessly.
  • Every time forum members here have said the same thing, which is too many devices and a need for a flagship, we get torn to shreds.
  • Flagship XL in USA!!!!!
  • I dunno, around here in comments I have very much seen a shift to the "enough already!" everytime a new low-end Lumia came out (a hangover from the Nokia days).
  • When Microsoft bought Nokia, I was worried of the shift Microsoft would take away from what made Nokia great. Now with 8,000 people laid off I worry even more of what would become of the Lumia line. We haven't seen a high end in a while, I prayed for a 1020 successor but that seems to be just a dream, and now praying for a 1520 successor which I hope the 940XL can be.
    I know Microsoft said they will focus on high end, but does Nokia spirit still exists or it vanished?   I am sure lots of us are eagerly awaiting Windows 10 for phones and a new Lumia enough speculating for now good day.
  • It'll be more like the Surface Pro line.  Release a line of devices that have a very high build standard and really good value overall.  Then offer engineering resources to the other OEMs to bring their products up to par or even better than the Surface Pro line.  Having Microsoft make what should be considered the base line in Windows device quality only improves the entire ecosystem.
  • Love that 1520.. Scroll tap, not so much.
  • You haven't seen a 1520 successor, for instance, likely because for the full Win10 flagship experience it will require new hardware. This is likely what at least one of the rumored new flagship devices are going to have.
  • What made NOK great is what failed them in the SmartPhone race.  Apple uses one SKU they update every 6 months/year to build the most dominant 21st century ecosystem.  NOK doesn't understand the difference between an ecosystem and market segmentation.  Andorid succeeds because the OS is free and open.  Doesn't mean android devices are particularly good.  Most are probably poor products that last a year.  Windows Phone (I have been using them since they first arrived) has failed because MSFT failed to make a functioning ecosystem.  Windows 10 is supposed to fix that but we shall see how well Windows 10 consolodates the backoffice tasks of entering the 21st century information economy with the front door (your customer opening his device).  The iPhone and iTunes did this. Does Windows 10 Mobile hammer Andorid or iOS.  Or does it just eck out a messily 10% marketshare over the next 3 years?  My bet is is hits Android a good bit.  Why?  because MSFT can provide OEM's a better business deal to enter a stronger ecosystem than android (provided Windows 10 fullfills its promise). 
  • I bet all those comments were from americans... you keep farting on about it being confusing... yes... thats why lenovo is the biggest pc OEM... because it has no options or mutiple models
  • @Daniel - exactly right! I am absolutely tired of yet another low or mid-range device coming out. I'm still waiting for a good W8 flagship, so now I'll be waiting for a W10 flagship. My 3 necessities 1) It must be the best phone available at the time; 2) It must be a 4.3" to 5.2" screen (not a bloody phablet); and 3) It must, must, must have microSD. I'm so tired of all the 9XX and the 1020 flagships that have come out without microSD!!! I have money to spend, but nothing to buy. I want a flagship phone, that lacks NOTHING and I'm prepared to pay the typical outright price of $700-800 for it (in Australia). I'd really love to see a 1020 successor with microSD, of course.
  • And why is that?   Because MSFT seems to be copying Apple instead of innovating themselves.   Windows Mobile was awesome back in the day, and Ballmer, et al didn't recognize (or respond) to the threat.   Windows Phone is excellent but still feels half baked, especially the lack of internal features coming from WM, as well as the arguable poor app ecosystem.     I'd like to see MSFT offer only three phone, and drop this number naming covention.   Call it Lumia Icon, Icon XL, and Icon Tablet.   4, 5, and 6 inch screens, respectively.   All offer same specs, same software.   Get economies of scale from mass production.  Use the formed poly carbonate of the 1020/1520 heritage.  Those are nice looking devices and high quality construction. Building all kinds of phone just fragments the marketplace.   People are confused.   WM 10 better get it right, because there won't be another chance.  And dont' get me started on Andriod Auto, Apple Car Play, etc.  This is a market MSFT should have owned, especially given their Sync software and phones. 
  • Then a lot of people like me won't be able to use Windows Phone because it will be very expensive.
  • LOL.  This is WindowsCentral.  This is an article written by Daniel.  What else would you expect? While I do not think the sky is falling, I also chuckle at the "this is great news" perspective that Daniel is trying to sell to the poor folks here that are desperate for anything positive, even if it is false.  If Microsoft is selling phones, there wouldn't be lay offs. Fact. This move is an acknowledgement that their mobile strategy is a failed one. Ironically, a strategy that was extolled on this same website until today. In my opinion, this is a bad move but a necessary one. One that is only necessary because of a series of bad moves that have put the platform in a bad place. Until the root issue of adoption is fixed, there will continue to be more news like this and Daniel will have to continue cranking up the PR spins.
  • Why is giving direction, streamlining and focusing on three key areas a bad thing? Nokia was all over the place and their strategy was very different from what Microsoft needs to do. Was buying Nokia's mobile division a bad decision? It certainly was expensive but as I point out, it doesn't seem like they had much choice either if they risked leaving it out there. Microsoft's whole mobile strategy was wrong since Ballmer ran it into the ground. We're just seeing the company finally making the RIGHT decisions to correct those mistakes. Yeah, that's a good thing. These changes are exactly what critics have asked for.
  • I don't always agree with Daniel, but ultimately, he's spot on.  This is about clarity.  Clarity from MS to partners, clarity from MS to end users, and clarity that they'll be continuing with a laser sharp focus with Windows 10. It's sad when people lose their jobs, but I think the term creative destruction applies in this situation.
  • A couple points I'd like to make - streamlining hardware is good, and necessary. The real test will be to see if Windows 10 mobile gets the same attention and frequent updates as the desktop version does. Customers, as well as developers, need to see that it's valued by MS. Why should consumers care about a Windows phone if the company producing it doesn't? And even more importantly, developers won't either. Windows phone is a great OS, but it needs to be acknowledged that it still lags behind IOS and Android in terms of function and polish. It needs to be pushed ahead, and I'm hopeful Windows 10 mobile will be, but until that's proven, and it's long term development is secure, consumers and developers will be skiddish. And from a perception standpoint, a 7.8 billion dollar write down of their phone division comes off as uncertain and troubling, especially for an OS that has around 3% market share. They need to follow this news up with an overt, forthriight, evidence based committment to years of phone development, because right now I think there are people who just don't believe MS, or have confidence that they won't change their mind and drop phone development if/when marketshare doesn't increase.
  • You are doing a gross disservice to Nokia..
    520, 620, 720, 820, 920, 1020, 1520.
    7 devices, all of which were excellent within their particularly niches.
    Nokia did a great job - and gave real impetus to the platform....all of which was lost by Microsoft not committing resources to making the OS any good!
    I mean, how many times did Nokia have to plug the holes in the OS via creative solutions (complete rewriting of the camera stack to get the 41MP sensor working within WP's crap device constraints. Storage Check Beta to alleviate the 'other storage' issue. Nokia's live folder fix to allow us to create app folders etc etc!).
    I know you've got to peddle the Microsoft being great thing - but don't go taking pot shots at Nokia...the only really committed party in this whole sorry affair!)
  • Amen. Bullshit comments against Nokia are becoming a thing here. They made some bad business decisions, yes, but they did commit to WP. Microsoft has really let the ball drop in terms of hardware. They axed McLaren but they didn't axe the 530 and thirty other low-end phones. Low-end phones are the worst way to show the capaibility of a platform. Nokia did wonders with WP hardware. Microsoft did jack shit.
  • Thats because a lot of Americans simply do not understand Nokia and the value of Nokia Branding worldwide . It was Nokia engineers who were pushing the Windows Phone platform forward, with suggestions, features and WP8.0 workarounds not Microsoft. Beware Nokia are comming back into the Smartphone market next year, with lisenced designs.  I think you will find that consumers will be eating up rather more Nokia branded phones, than any Microsoft branded phone.
  • This is all well and good.  I own a 928.  My kids and wife?  iPhone.  Why did NOK fail to sell 10s of millions of phones?  MSFT failure to build a mobile ecosytem.  The OS is good. On par with iPhone and Android.  But the ecosystem failed to grow which hampered any progress on market share gains.  This is clearly MSFT failure.  However, NOK bares some responsibility for producing many phone variations.  Could NOK have dominated android?  We will never know. So MSFT paying NOK billions to build the Windows Phone, paying NOK billions more to purchase their phone business, and using NOK market strategy does not show committment?
  • Oh yes, buying Nokia was a major mistake, and Nadella knows this. Instead of pouring a couple of billions into Nokia, they should have developed a cloud-based custom ROM builder, supported by a driver alliance, with a nice Android app acting as an easy entry door (Isn't Windows all about "on any device"?) Additionally, they should've really built upon the Silverlight engine, introducing games support and adding native support to .NET in the process ( which was "impossible" until being done recently), instead of letting the Sutter-C++ mafia reintroduce their crappy COM. A Silverlight MS Office would've been the required rewrite, being platform agnostic from the start. Then, they should've skipped W8, pushing WP to tablets and create a simple WP-start screen widget for W7, maybe some sort of pinable apps. Same goes for Xbox 360, porting Silverlight would've been easy. They should've cancelled extended support for XP earlier to consolidate on W7. All in all, they would not only have saved lots and lots of man hours, they would also have saved two complete SDK-iterations and tons of unnecessary documentation. Also, they wouldn't have cut W7 users from creating apps for their mobile OS, which was the worst decision of all.
  • You sir, are an idiot.
  • I think there are some good points.  I don't agree with it, it may be naive to the complexities of where Microsoft is and was, and read like the manifesto of a crazy man living in the woods, but it is not "idiotic". Microsoft has done a lot of strategy shifting and left many users and developers feeling blind-sided, which is not good for building loyalty long-term. A more carefully thought-out strategy might have leveraged existing tech better and paid off more in the long term. Again, I don't agree that what was posted is "the way things should have been done" (or even entirely coherent) but it did raise some valid concerns. Well, except for the part about "skipping Windows 8" and staying on Windows 7, that was just dumb.
  • Because it's too late. The opportunity has passed.  This is a saving cost measure and a slow exit of the phone market.
  • Why make a slow exit? If they have already decided to kill WP, why would they blow even more money on a "slow exit"? Its pretty simple to me. They bought/inherited a bloated failing phone OEM. MS doesnt want to be a phone OEM and they are losing money with it. Restructuring puts WP in a position of not hemmoraging cash. Even if is doesnt sell, it just has to be in the black while they work on making headway with the unified app platform. If they can control the cash losses, they can keep WP around forever if they want to.
  • @Daniel Rubino:
    Meh. You're probably right that a few changes were needed.
    But I still think that Nadella is a j*rk, because if he doesn't want to get rid of the Phone business, he could've stated that more explicitly in his mission statement and avoid the confusion, rage desperation all along.
    But he chose otherwise instead, using words and turns of phrases that left plenty of room for speculation, misinformation and people jumping to wrong conclusions...
  • No matter what Nadella said or did, people would still believe that "Windows Phone is doomed" because that is the popular narrative people have believed since even before the iPhone and Android came out. The press has been clamoring for Microsoft to fail since the 90s.
  • I am okay with everything except the "atleast 2 year" part..
  • You're just too blind to see how this is good. Everytime Microsoft announced a new low-end device. Everyone says "enough with the low end blablabla". And it's true they have too many low-end devices. If it's true that they are going to release only 6 devices a year. That would be perfect. 2 low-end- 2 business-end(whatever that means) and 2 flagships.
  • There were a lot nokia manufacturing facilities that didn't have a good cost structure. All Microsoft needs is the Nokia designers, engineers, and those responsible for the great camera. The manufacturing can be outsourced to china, just like what Apple and every other phone OEM is doing. Apple doesn't make phones. They design them and let others build them.  So, if the layoffs are coming from the manufacturing side, it was needed to be done. If they are coming from the designers and engineers, then there is a problem.
  • The problem isn't that MSFT isn't selling phones, that's just a symptom. The real problem is that MSFT is working on many similar products separately. That's why Windows 8 and Windows Phone 8 look so similar, but work differently. The WP has a better keyboard, why doesn't Windows 8 use the same touch keyboard? Because they are two separate teams. Hopefully this will unify the teams so that features that make the phone great can be shared to the main OS, and vice versa.
  • spot on.  I much rather use my keyboard on my phone over my Surface.  zigzagin across the phone to type is way better than tapping on my surface screen.
  • With this revised strategy, MS appears to be banking on OEM to become more involved with Windows Phone / Windows Mobile in the future again. Unfortunately, the app gap is still very much there and why should Samsung, HTC, LG and others start producing more Windows phones now, only because MS will produce fewer phones themselves in the future?!
  • BECAUSE Microsoft will produce fewer. That means there will be space for other OEMs to compete. If Google announced they'll be making 12 phones next year with exclusive software, I guarantee we would see OEMs cutting back on Android devices.
  • I understand the reasoning behind this, what I am saying is that I believe the reasoning is flawed. No company except for Apple is currently making money building phones. The hardware business has come to a point where even Samsung, who seemed almost untouchable a mere 18 months ago, has run into serious trouble. Not to mention the likes of HTC and LG. So even if MS is now leaving some breathing space for other manufacturers, why should those companies come (back) to Windows Phone when they can't even make a profit with (free!) Android and the app shortcomings of the WP ecosystem are still there. It just doesen't add up, unfortunately.
  • This is exactly my point..It has never been about Nokia/Microsoft making more phones..It has always been about other OEMs not being interested..
  • But a big part of the disinterest is the Nokia/MS dominance. Think about Samsung. They have many models - some of them dont sell big volume. If Samsung made the best WP on the market, especially with MS/Nokia out of the way, they could sell a lot of them - more than probably many other lesser models they currently make combined.    The calculation isnt really just by OS for an OEM. Its per model. How popular the OS is doesnt matter if you can still sell 1million units.
  • I'M ALL IN!
  • Kudos Mr. Rubino for a superb and accurate article. This is what needs to be published in The Wall Street Journal.
  • First party phone.. Does it mean we can see a possible Surface branded phone in the future?
  • Surface just the name same goes with lumia. I don't see any benefit to having surface branded phone that have same feature with lumia phone
  • Although it would be interesting to see a Surface Phone emerge for the Enterprise, bit like their Surface Pro line (since thats not really mainstream hardware either) and Lumia for the rest. But then again, what's in a name yeah
  • hmm, 'Surface Lumia'  'Surface Lumia Pro' 'Surface Lumia Premium' , possibilities that would tie existing brands together.  
  • This is too easy: Lumia Surface, bam! Done.
  • Why is everyone obsessed with a surface branded phone? I expect the next flagship to be a Lumia 940 and 940XL like the article speculates. What benefits do you think rebranding Lumia to surface would bring, I can't think of a single one?!
  • I think the obsession is not about the name, but rather the idea behind it. The Surface line of products all have a very uniform look that is very professional. It is made out of VaporMg which gives it a nice texture. I don't think what people are asking for is to drop the Lumia name and just slap Surface on there instead. Obviously that wouldn't change anything, but the name. No, what everyone is asking for is a Surface branded + look and feel + note taking integrated phone. Keep the Lumia line and have a Surface phone in addition to it that has a few special features, but especially the same clean look and VaporMg of the Surface computers. That's what they are obsessed with and honestly I don't blame them. It would be a nice phone and one that I would love to have. Will it happen? Probably not, but it doesn't mean that we can't stop wishing :)
  • Look at this gorgeous mock Surface phone design. That's why.
  • Most people walking into a store seeing a Lumia branded phone will expect a budget phone. Bringing out a new flagship under a decidedly budget banner will hurt perception. Originally, there were flagship quality Lumia phones, but the saturation of budget Lumias that made this layoff necessary has made Lumia synonymous with the low to mid tier.
  • Because people have seen the concept designs of the surface phone made by fans and most people liked the way they looked. The reality is that using vapormg might make the phone too expensive and there might be issues with the signal. Also the surface design looks good, but it might be uncomfortable to hold if you make a phone with that design.
  • IIt doesn't have to be vapormg to be called a Surface phone. it just needs the same philosophy as the Surface tablet, artists have made the kickstand the unifying feature.  I'm not in the camp that says the next flagship should be called a Surface Phone, I'm in the camp that says the next flagship should not becalled a Lumia. Reserve that brand recognition to the relatively well performing low end phones. They need a name for each market: Low end: Lumia Business: Surface (?) Flagship: ????
  • Exactly my thoughts. Been wishing for one for so long. I would actually recommend they name Surface phones only a specific line of phones for recognition. Like the top tier phones only and that comes out every 18 months or so. You buy Lumia for the best budget option. Surface Phone for the best phones :P not just windows 10 phones.
  • I don't think there will be any surface phones. Surface will be only for tablets.
  • What would the FUCKING difference be to put SURFACE on the cover of the phone? Will it make it automatically more powerful? More likeable? This is the point where the people get confused: -Oh I just bought a Surface.
    +a Surface PC or a phone? Lumia is ok
  • Name branding...Everyone knows what an iPad is, but there are a million tablets on the market...People know what a surface is, even though the name is not equivelant to an iPad. Everyone knows what a Galaxy or iPhone is. If Microsoft/Nokia didn't have 1000 Lumia phones, people would have better product recognition. A Surface line of phones and tablets, to me, is exactly what Microsoft needs. 
  • That's a really great argument for why Microsoft absolutely should not use the Surface name for a phone, and I agree. As you said, iPad is recognizable, if Apple released a Mac pro called iPad 6, it would be dumb. If Samsung released a Galaxy TV, it would make no sense. If Microsoft released a Surface phone, it would be a step toward ruining a brand they've worked hard to start building.
  • The Surface brand actually started as something closer to what is now called the Surface Hub, if memory serves. Regardless, my point is that the tablet was not the first product to bear the Surface moniker and extending it to phones targeted at businesses can have a synergistic effect on that market. Surface Phone Surface Tablet Surface Hub Creating a Surface branded phone is going for the trifecta.
  • The difference is the same reason you put two specific words in all capitals. A brand is an emphasis. There were the Lumia 930 and the Lumia 1520. There have been at least 8 other Lumia phones and they have all been emphatically budget offerings. The emphasis of the Surface line has been premium quality and that is what people want from a Microsoft phone.  Here in the USA, if I walk into a carrier store and say I want the iPhone (despite the presence of the 5c) there is little doubt that I will be presented with the latest Apple flagship. Same thing if I walked in and asked for a Galaxy phone. If I walk in and ask for a Lumia either one of two things will happen: I'll either be asked "which one?" or I will be shown a Lumia phone that may not be the one I heard about.  That is the biggest problem W10 Mobile needs to overcome if they want to be successful overall.  Surface is a brand that more and more people are associating with Microsofts best. 
  • i hope not as im very happy with the lumia name and the lumia 930, why change something that stands for quality?
  • Hmmm... The trouble with Lumia is that it probably stands for cheap/low end now in peoples mind. The surface brand means quality, best in class to most people.
    If they don't use surface may still be better to come up with new brand for new phones.
    Surface can stand for best in class win 10 devices. Win 10 devices is the way their also moving anyway.
    Also it's not that different type of device when you throw continuum into the mix. (behaves like an even smaller 2 in 1 device)
  • I think the benefit of a Surface branded phone would be to leverage the brand that MS spent millions on building with TV ads over the course of the past 3 years. Plus, the Surface tablets are fairly well received (barring the RT thing) by a wider audience than WP.  Imagine a scenario when new employees to enterprise companies are issued a Surface 3 Pro and a Lumia/Surface phone on the first day of work because all of their IT is built with MS security in place. I could imagine that. 
  • The Lumia line is a 1st party phone as it is made by Microsoft. Anything by Samsung, LG, HTC, etc are considered 3rd party.
  • Lol, STXVI did you actually read the article or just the headline?  It is a long article and you had commented within 1 minute of Daniel posting.  :p  Just giving you a hard time.  ^ Agreed with the article.
  • Keep the positivity coming and thanks.
  • You mean the sky isn't falling?!
  • Very well written Daniel.
  • As simple as that...
  • This is good. Hopefully the tides turn for the better. Less redundant devices, better marketing & more 3rd party OEM support can bring them to atleast 8-9% marketshare in 2 years. The OS itself is already getting better.
  • Yes. Sacking 70% of R&D means good times are ahead. As a side note, Microsoft did NOT buy Nokia.
  • Lay-downs are something different then getting "sacked" or fired. People who are laid off are likely to receive unemployment (as stated in the letter) because they left due to restructuring rather than personal performance.People who are fired are less likely to receive unemployment because they left due to issues with their personal performance.
  • The paragraph right above mentions the purchase of 'Nokia's Devices and Services division'. It's called shorthand and it was already defined above. Stop being pedantic as it changes nothing about the article. Also, "70% of R&D"? Really. Last I checked, Microsoft already has a huge hardware R&D department. Surface. Band. HoloLens. Xbox. Not worried, why are you?
  • Nokia is Nokia. If you say "buying Nokia" it means buying Nokia.. There were actual news about spesifics in Finnish media. 2300 of 3200 total workforce will be fired in Finland. Most work in R&D. And the remaining will be the ones that design new smartphones from now on. Flagships in Espoo and mid-tier in Tampere. Also what was published is that San Diego unit will be closed for good. But overall could have been worse. Nokia is doing fine, perhaps some of the fired will get a job there though focus is on networks.
  • Hopefully recycling members of the Windows team will help them from losing progress. Losing that many employees when changes feel stagnant seems risky. Of course as has been said before, with Windows 10 about to reach RTM soon we will know how the strategy pans out.
  • With this the Windows Phone and Windows PC teams are officially one.
  • We just need some real Lumia 1520 replacements.
    The enterprise part of the plan gives me hope that we might see some 6", 6.2", 6.3", and maybe even a 6.5" high end Lumia... At least two of those sizes would be nice.
  • Lumia 940XL is your 1520 replacement. It's 5.7" stop with the nonsense over the missing 0.3 inches. If that's how it goes than the 930 is not a replacement to the 92X cuz it's 5" rather than 4.5. The 900 also never got replaced by the 920 cuz it was 4.3 inches. You're not going to see a 6inch device again unless they decide that the 950XL is to be 6inches going forward.
  • It may not seem like much of a size difference on paper, it definitely is in hand.
  • Yea, it's 0.3" diagonal, so you're missing both width and height.  It's certainly noticeable.  the same way the screen size difference between a Note 1 and Note 2 (5.2 to 5.5") was very noticeable.
  • Yes, anyone who has ever held their 1520 next to a tiny 5.7" Note 4... And, the first thing they think is that they wouldn't want a phone that small.. Those .3" make a big difference...
    Not saying that a 5.7" device isn't awesome, and that it's completely necessary, but not everyone is asking for what's best for the masses.. Hence a new 1020. Same damn thing.
  • No, that's YOUR 1520 replacement❕
    If I want a 3.5" replacement for the 1520, then that's what I want.. But, I didn't ask you for a 3.5" replacement, did I❓
    BTW, people who want a 6"+ Lumia are full aware of an alleged 5.7" high end Lumia coming out, so what's your point❓ Seriously, what is your point❓
  • HIs point is that the 940XL is going to fill the role that the 1520 did, the large-screen high-end device. That's what it means to be a replacement. What is your point again? And why do you feel the need to bold-face your question marks?
  • Rod, you love your slab phones! You may have a point. Low end = 4.7 & 5.2 inch, flagship at 5.2 & 5.7, enterprise 5.2 & 6.2 inch. Just a shame they did not come up with the bleeding edge flagship idea before the ordered the 810 from Qualcomm.
  • As far as high end goes, and this is just dreaming... We need..
    6.7" Lumia's... Now, we all know that's not going to happen, but that would be a killer high end portfolio.
  • Yes, it would be "killer" in that continuing to make 6 different devices to fill a market only big enough for two would kill it. If they sell the same total number of devices, then making a smaller number of different devices leads to lower manufacturing costs, and a greater change of profitability. It's the smart thing to do.
  • I really don't want to see a size = status level on these phones. I hope they maintain the same patter of regular/XL, and that's the big difference. What I wouldn't give for a modest (5 or less) screen size flagship!
  • You're pretty obsessed with the 6 inch and higher...its actually funny... :P but really,lets face it...there is no market for it even if the huge screen enhances productivity...its your personal preference here that keeps you thinking that the market needs one... :D nobody wants to buy a 6 inch...maybe they will start preferring it after they buy it...but very few customers dare to go beyond 5.7 inch... and of all categories, enterprise customers are definitely not gonna have a big slab in their hands at work or having them hang in their pockets during meetings and stuff, LOL!
  • And, I could care less about any of what you just typed... MS doesn't seem to be making a new 1020, and you could sit here, and argue all day that their 20mp cameras are good enough.. But, the fact is that certain people want a "1040" no matter if MS plans to make one or not.. That's what you don't understand...
    And, you've gotta be loosing your mind if you think that Office on a phone isn't better with a larger screen.. Maybe not for you, or everyone, but for some people...And, there is a market.. Just because MS is struggling doesn't mean there's not a market.. You need to separate those two things in your head... Samsung makes "active" devices because they can afford to support that market.. MS obviously can't right now, and that's obvious... But, if you have a problem with people wishing MS could support Niche markets, then you can basically squirt off... Nobody is really interested in hearing you cry about what others want. There's people here who want a 4" high end Lumia, and we know that most likely won't happen anytime soon... But, we just hope for them that MS can one day expand to the point where it's feasible... You gotta problem with that❔
  • Maybe 'other' niches are open for other companies?
  • I luv my 6+ inch phones.
  • I still stay with my guesses.
    For this year:
    - Value buyers: Lumia 540;
    - Enterprise: Lumia 640, Lumia 640 XL;
    - Flagship Devices: Lumia 840, Lumia 840XL. For next year:
    - Value buyers: Lumia 440;
    - Enterprise: Lumia 740, Lumia 740 XL;
    - Flagship Device: Lumia 940.
  • Bad guess
  • Flagship is more likely to contain the 940 and XL and honestly including the 840 toooo .!! Which I am waiting to appear on the shelves soon ;)
  • What? 940 and 940XL are confirmed to be coming this year. Also expect them to completely change the names. I doubt it's going to be called 940 and 940XL. They're going to ditch the numbers.
  • Too bad for ppl who will be sacked and also will create a impression that MS is no longer safe to work.
  • You do not work there and I'm guessing you do not know any employees, so why speak for them?
  • I guess because everyone should be entitled to their own opinion?
  • People who are laid off are likely to receive unemployment because they left due to restructuring rather than personal performance. People who are fired are less likely to receive unemployment because they left due to issues with their personal performance. As such, they'll receive compensation. Besides, stuff like this happens *al-the-time* Everywhere.
  • In situations like this, the best talent is likely to leave first though.
  • Yup. I question this weird Windows Central strategy of writing thoughtful, logical, and well-reasoned articles about stuff though. I mean, people don't want that, right? ;-) To others: Nobody is minimizing the unfortuante nature of layoffs. But they happen and everyone knew Nokia was dead anyway--they did that to themselves long before MS bought them. What is happening right now is strong leadership from a man with a clear vision. The last major tech icon who had that was named Steve Jobs and look what he accomplished. I think this is the start of a truly new era for Windows Phone and I, for one, am thrilled to see Nadella taking control and steering the great ship Microsoft with a straightforward and coherent strategy for the future.
  • Like I speculated today over in the forums as soon as news of lay offs may come.
    Lumia/Surface style in tow. As they just produce a surface for PC as google does with nexus for phone, expect the same from Microsoft. Leave the rest to OEMs!
    This did not surprise me, though the mention of a focus on a budget device did device did surprise me.
    So the wrap up is expect a flagship Lumia/surface and one budget device, including XL moniker.
  • Looks like Nokia wasn't to wrong when they sold off their devices buisness to Microsoft. They knew exactly what they had done to themselves and saw Elop and Microsoft as a way out. Many people say Elop took advantage of Nokia, but with this news it could actually be the other way around. Nokia gets the money they need to rebuild and are better positioned to hopefully release handsets again in an OS that people want. They lost their did Microsoft. Maybe this will help Microsoft regain it's vision.
  • I read that they plan on designing phones, but not actually building them physically. Bit like the Noka N1 tablet, made by Foxxconn
  • Yeah I read that too....and welcome it. I think that is part of what Nokia learned, they were building and the cost to do so is just so great. So they can design high-quality handsets again and let someone else build to Nokia's specs.
  • Yep Nokia are comming back next year with lisenced SmartPhone designs. Nokia still have global brand recognition (excepting the US) Who is the stupid one here, Nokia or Microsoft.
  • So less budget phones and more flagship/enterprise models? Or no change, just less models?
  • Little of both
  • Flagship, but no 41mp replacement?
  • A "Lumia 1030" is not being developed at this time, sorry.
  • And a good thing to, the whole point of the article is about getting rid of the sorry mess of phones, so no replacement for this one or that one is a red herring, to be honest they should ditch the whole of the old numbering system and go for something like WP Gold, WP Silver and WP and then have if they have to two sizes for each. If the Gold and Silver or whatever they call them are any good they will have good cameras anyway.
  • To  be honest, such a device never really had a market. 100k people willing to buy a phone like that doesn't really justify developing it.  Not when current smartphones are able to produce great pictures witih anything from 8 to 20MP sensors, and in a form factor that isn't nearly as polarizing as the 10xx series Lumia devices (if we can even call it a series, since there was only one). Plus, those 41MP images were completely impractical and for the price difference between a mid-upper end phone and a 1020 (at launch) you could get a P&S camera that produced better images and video, anyways.  I just don't see the point in that device, since the people who care about photos that much are the ones who don't care about carrying around a P&S that isn't all that hard to fit in a pocket, anyways.
  • I don't believe in that "not a market" BS...
    It's more like MS doesn't know how to market.. Samsung, and Apple would've sold more 1020's by just having their name on them... The problem is that MS's shitty marketing fails to make a market for thier devices... You got the wrong idea.. You gotta make things happen, not wish things will happen... These layoffs are happening now because a lot of people didn't MAKE THINGS HAPPEN❕...
  • Not possible with L1020 specs, even for apple.
  • The problem with the 1020 was that it didn't have microSD. That is a basic feature of any mobile and certainly any camera. When I want to take a lot of photos the last thing I want to worry about is storage. I usually have 2-3 microSD cards kicking around (I have 2 x 32 GB and 2 x 64 GB on my desk at the moment) that I can chuck into any of my devices at a moments notice.
  • Good write up. This plan makes perfect sense for Microsoft. As a government employee I long ago wondered why Microsoft wasn't targeting Blackberry's market in business more with WP 8/8.1.
  • It really sucks that a lot of people are losing their jobs but as far as the business vision, I agree with it. Tear down the whole Lumia mess (with it's model numbering nightmare) and make 3 tiers of Surface phones while allowing other OEMs to come back. I guess you could make the argument that it's fine for MS to control 97% or even 100% of their market since Apple does ok with it, but that doesn't allow them to catch Android. Renewed focus on a narrow set is always better than casting a wide net.
  • This is stupid , if they do this , what will happen is (in the far future) Samsung and HTC always shock us with their awesome phones and hardware , if this awesomeness is put into windows phone , Microsoft sales will drop significantly , until Samsung takes the lead for windows , and all of that if windows 10 mobile succeeds ( which is what seems to happen) so Microsoft , if you let other do this , you're doomed
  • Who cares if Samsung or HTC takes over Windows Mobile? Android is the real threat here. If Samsung starts making Windows Phones that is great for us cuz more sales means more apps.
  • I care because SAmsung and HTC phones are crap/
  • I just want to see a Surface Phone.
  • A phone with the word "Surface" engraved on the back? What would be the difference to the word "Microsoft/Lumia"?
  • Personally, I feel that Surface has better name recognition in business than Lumia does. In my opinion, the enterprise phones should be branded as Surface.
  • It would be a different design and possible different materials. He's not saying he wants a lumia rebranded as a surface phone. He is saying that he want a surface phone that looks like some of the mockups created on the internet.
  • Maybe the business oriented phone will be Surface branded.
  • If this comes to fruition, I guess we'll never see a 1020 successor :(
  • Doesn't mean we won't. It just won't be in the regular line-up.
  • Why? It would fit under the flagship group. However, Microsoft might consider it as too much of a niche product to build it. On the other hand, if the point of the flagship category is too keep fans happy, than most fans will tell them that they want to see it built.
  • Now would be a good time to drop the name "Lumia". The term just doesn't scream innovation.
  • Like galaxy does -_-
  • "We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family."... The way I read this is they will continue releasing their apps for Android, iOS... oh, and Windows too.
  • So true..."And windows too...
  • I look at it as more of a guy deciding that his girl friend is good enough to bring into the family.  Its finally getting pulled into the "main group" of Microsoft instead of quietly sobbing into the corner to itself saying "meee tooo". 
  • Seems like most of the cuts could come from their feature phone business. The Series40 line does not meet Microsoft's new mantra. It doesn't use Windows, which is what Microsoft seems to be doing lately, getting Windows everywhere.
  • The "alternative" was never to buy Nokia or care if they went Android and there's a $7+ billion write off to prove it.  From the start Msft should have built there own phone and out sourced the camera tech to Sony similar to what Apple has done.  You could have sold the phone at cost and still be positive versus the Nokia acquisition.   
  • They created a monster by partnering with Nokia, who became too successful. It actually became a problem for them. They thought they were doing the PC route, but ended up with something else.
  • This is exactly right. I've had Windows Phones since WP7 handsets came out in the UK, before you could even copy and paste text on them. That first phone was a HTC. Ever since I got my first Nokia Lumia, and after them making such good phones, with amazing exclusive apps (Like Here Drive, which was exclusive in the past), there was no chance I was ever going to consider a Windows Phone from any other manufacturer. It's still this way for me personally today, and I'll be buying one of the two Lumia Flagships (Probably the XL) as soon as they are available, but at least once this monster dies down it could give other manufacturers a reason to release Windows Phones, and for the following phone I may eventually be able to consider a phone from another company (As long as it's running Windows, as I personally have no reasons to consider iOS and Android) My dismissal of other manufactuers making Windows Phones over the last few years may not have been fair, but I personally couldn't see anything worth choosing over a Lumia, and still don't quite yet, but at least with this new strategy there is at least a chance. Sony and Samsung make some really nice hardware, if the market is there for them and they invested in some Windows Phone handsets I could see us ending up with some gorgeous phones running Windows, that aren't Lumias for once.
  • I personally dont ever see myself using a WindowsPhone that is not lUmia as I have no reason to ever want to use them.
  • It's not a problem because without Nokia, Windows Phone would be nothing it is that is a blessing.
  • And how long would that take? Nokia took over the windows phone market share and the other OEMs pretty much dropped out. If Nokia left for android, windows phone wouldn't have a new phone for several years while Microsoft developed their own phone and there wouldn't be any phones. They needed to buy Nokia to windows phone ecosystem alive.
  • I believe that Microsoft has three ways for the mobile industry: The first, would create an excellent " flagship " with a competitive price , and another device with entry price , but median specifications. The second way would be releasing Windows Mobile for downloading, ie, create ROMs for Androids devices and send it for FREE. The third? Well, throw the towel, get a good Android and work with it. In fact, I see that Microsoft had a ready OS framework for mobile. Google took the visual "desktop " with icons , and created a mobile system. It worked! The MS already had this system, but wanted to reinvent the wheel by creating the TILES, that went very wrong with a bad market acceptance. I do not think MS go get reverse scenario, unfortunately. But, lets see...
  • I have a 15240. Until they make another phablet, I'm sticking with it.
  • I thought you were using 10240 .. :P
  • Lumia 940XL is 5.7" You think MS is going to make another phablet but with 0.3 more inches just for you? Lol You are never going to see a 6inch device again. 940XL is your replacement period.
  • I agree.
  • I have to admit I was skeptical when I read the headline. I thought you'll kind of put everything from bad in a good thing even if it isn't. But after reading the article I completely agree and am happy that Microsoft has made their position clear. I suppose Microsoft is going to be that company again where they make the software and hardware comes from OEMs. Additionally they'll have kind of signature devices made by themselves.
  • This is stupid , if they do this , what will happen is (in the far future) Samsung and HTC always shock us with their awesome phones and hardware , if this awesomeness is put into windows phone , Microsoft sales will drop significantly , until Samsung takes the lead for windows , and all of that if windows 10 mobile succeeds ( which is what seems to happen) so Microsoft , if you let other do this , you're doomed
  • Hahaha... They will be more happy to see that happen... Seriously Yahia.. You really don't have any idea what you just said :D
  • Selling phones Is better than software , I'm I wrong?
  • You are absolutely wrong.. Consider PCs and Laptops .. MS have surface line up.. Did they made a long list of Surface devices?. No right.. Because MS is a software company..not a hardware firm.. They created surface line up to force OEMs to improve their quality and bring innovative devices rocking Windows OS... Now they are gonna try the same approach with Windows 10 mobile ... They will make few phones .. OEMs like Samsung and HTC will make more hardwares... I wish you've read the article at least once before commenting.. :)
  • I already Say other companies won't try to make phones with windows 10 (other than HTC) ;)
  • If Microsoft wanna shine in hardware , it's easy , it's well know , and if it released a number of PCs in all ranges with a soft price and worldwide release , its gonna shine , a guaranteed shine !
  • Take a look at the PC industry. Microsoft made a killing selling the OS while the hardware makers were struggling selling low margin hardware as computers became a commodity product. However, the phone market is different. Microsoft can't charge for the OS since Google is giving android away for free. So, their current strategy is to make money on apps, subscription services and make some money from the app store. We've seen that even samsung has been struggling lately. Phones are becoming commodity items, just like PC. Only Apple has successfully positioned their products as luxury items on which people pay a premium. Outside of Apple, only the chinese manufacturers are doing really well because they can make up the low margins but selling really high volumes. 3 of the top 5 phone manufacturers are now Chinese companies.
  • Simple, they'll do what they said they would do with the Surface: fill gaps where their partners fail. If their partners do not step up, Microsoft will.
  • Stepping up isn't that easy Daniel and takes time , and when partners fail , other OSs available now will have a strong chance to shine
  • Nope
  • Exactly :)
  • @Daniel
  • Their "partners" have already failed to step up, multiple times. With WP7,8, 8.1, anyone expecting any different with 10 is in for a rude awakening.
  • Exactly theefman
  • There's always a second chance.. If nothing's going the way MS is hoping it to.. That's why they have 3 segments to make up ... Low end... Business segment.. High end..
  • You'll see my friend ;) that's not going to work the way ms wants it , and there is no time for second chance when windows phone is struggling
    Think about it
    Talk is talk ,open your eyes wide and see , Samsung is already losing in android and the gs6 isn't doing as its supposed to do , I'd guess they won't waste money "trying" for a second chance , and HTC has the same situation but it may release some where it shines like Taiwan , but this will never work ...
    Remember this , Samsung will NEVER support windows phone
  • Except this time they don't have 4 partners. They have a shit ton.
  • Let's prey Nadella had secured a few such partners before culling so much of MS's own capacity... If he is going to get out of many markets and carrier partnerships, someone else should be there to pick up the opportunity. 
  • playing armchair CEO, I think even the proposed 3 phone market that they're choosing to focus on is too many. I think they should have the budget line(640, 640 xl) and the flagship line(940, 940xl). let the let the person who's buying(whether it's a enterprise customer or not) decide which route is best for them. having the "enterprise" choice just seems like a weird sku that doesn't necessarily need to be there and could still hurt OEM's. If someone truly wants to make an enterprise phone(read Lenovo or even Dell) to fit in with their line of products, let them. imagine if lenovo had an entire thinkpad line that included a windows phone.that's enterprise and allowing the OEM's back in.
  • Nah, there's enough unique use case in the enterprise sector that Microsoft focusing on some good hardware/software integration targetted specifically at it makes sense. And in the near term, MS cannot rely on third parties to fill market niches, they need to demonstrate market need by being successful in those sectors in order to convince OEMs to bother with them. Having very few price point/feature options lets the OEMs fill in around cheaper/more expensive lower spec/higher spec, something that wasn't possible at the low end of Lumias given the diverse mix of devices; high end Windows Phones still aren't selling for anyone, which is why no one has rushed to fill the hole left by a lack of flagship Lumias. MS needs to prove that Windows 10 Mobile devices can sell before anyone will try to make them. Maybe, at some point down the line, they can do away with enterprise (or flagship) specific skus if the OEM ecosystem becomes vibrant enough, but it's certainly not going to be any time soon.
  • I'm thinking that the "enterprise" phones won't be in most stores, so all the customers will see is exactly what you have posted above. In all likelihood, the enterprise phones will have special features (hardware keyboards, stronger data encryption, cameraless options for high security areas, are just a few random ideas) that make them attractive to certain markets but less popular for conumer markets. If they also feature custom software, they could fill the Blackberry niche that still exists.
  • Last month we were flooding the market with low end Lumias... We said that's what best for business.. Now it was a bad attempt flooding the market with countless versions of low ends..
    But still, the current strategy sounds much more promising ... Satya Nadella is up to something.. Till now he was getting rid of some Ballmer sh!ts.. He will start fresh with Windows 10 ..
  • "We said that's what best for business"
    Not sure who the "we" here is but it was good for Nokia at the time, it's not good for Microsoft. Most comments here loathed the announcement of a "Lumia 4xx" and more low-end devices, not praised it.
  • I really don't remember.. It was when MS launched 535 630 635 540 some of these guys over here including some Famous names were defending the low end flooding approach for the sake of market share... But I think it really did help us in gaining market share.. Those low end devices gave us a base.. Now it's time to build the rest of the strategies over that base.. I think that's the path MS has chosen... And 4xx was un-necessary .. No doubt about that..
  • Yes, globally saying "we" is probably unfair...BUT, c' know YOU said as such, @Daniel.  Focusing in on the low end markets was something you kept saying was a good thing, especially when folks here were complaining about a void in flagship devices.  Love your opinions and insight on a lot of things on here, especially when there's a need of looking at things objectively and not always seeing through the lens of emotion...but even you have to admit this article is a bit of positive spin on this right?
  • Focusing on low-end was brilliant, but even I never said the Lumia 435 was awesome strategy. I barely understood it.
  • This is off topic, but I can't find my comment on this article anymore.  I've received emails that people have replied to it, but the link in the email doesn't scroll to it.  I've searched manually and with ctrl+F but no luck.  Any ideas why Daniel?  Thank you
  • I don't think everyone was onboard with the low end flood.  Especially with the high end being so neglected. When Microsoft makes hardware it has never been for low end market.  It's always top quality stuff.  Let the Chineese fill in the low end market.  
  • "let the Chinese fill in the low end market" Lol xD
  • i just want a new flagship windows phone ASAP
  • Break into Redmond tonight.. All the best
  • And realized they made them in Finland?
  • Sad about Nokia. But I guess it's all for the best. They need to make a 1020 successor to create buzz like Nokia did with it. Sure not everyone bought it, but it stirred up curiosity.
    I find that most iPhone users 'pretend' to love their phone because of peer pressure or they don't know better. People like me who have tried both know there is something to WP. MS needs to not screw that up.
  • exactly.  I really think windows 8 and 8.1 on pohones like 1020 and 930 and 830 was building a great rep the the phones and os, i relly think going forward this can only help the sales positivly.
  • Great article; well written and articulates the points clearly. I am encouraged by this announcement.  Sorry for all those who are losing their job.
  • I agree! It is tough to spin a 7 billion dollar loss because of their mobile division as a good thing... Posted via the Windows Central App for Android
  • "Last month we were flooding the market with low end Lumias... We said that's what best for business.. Now it was a bad attempt flooding the market with countless versions of low ends.." Yeah, this reminds me of a quote from the book "Skygods: The Fall Of Pan Am". Back in the day Pan Am was opening bases all over the world to save money. A little later they were closing those same bases to save money. An employee made a comment about how much money Pan Am could save by "opening and closing bases." But for Microsoft it does kind of make sense. The low end devices were at least selling, helping to maintain market share, although it wasn't actually growing like they thought it would. But low end devices are not profitable, either directly from sales or from the subsequent services utilized. Microsoft was forced to change something up.
  • I don't agree Daniel, this is a poor action. A company can cut back without making a bad impression in the press like this has done. Why announce it now - a few months before releasing new high end phones when they will be trying to convince people to try them out? Why not spin it in a way to highlight the positives - they are preparing for an exciting release and just focusing in more limited areas. Sure I see some mention of things continuing, but that is muttled near the end after I've already locked in on big job cuts. I don't have a clear picture of what the future holds. If customers don't see Microsoft committed to phones then they won't be buying a Microsoft phone in a few months. Nadella cut the high end phones last year and it is no surprise that Windows Phone has stagnated - you just can't take a pass for a year in high-tech. Microsoft may not like making 97% of Windows Phones, but I seriously doubt that situation will change until Windows Phone market share becomes sizable. Manufactures won't want to make phones if they are unsure if they will sell. As a customer I don't want to buy a phone if I think it may not be supported going forward.
  • When those two high-end phones come out with marketing and Continuum, people will forget about this "they're leaving phones" thing. This gives them breathing room of a few months to move on.
  • No offense, but there has to be something a bit more "exciting" than Continuum. Continuum won't buy them months.  More like hours or days.  It simply isn't that big of a game changer, IMO, and it's not something consumer are likely to use enough to care that much about it. It may find a niche in enterprises, though even that seems like a bit of a stretch.  
  • That's why he mentioned 'marketing' first. Paired with a cool Continuum gimmick, MS may leave a good impression. OEMs may find some prospect of making both their laptops & phones speak the same language.
  • imagine taking your laptop with you on vacation, or on a work trip.  you needed a bag big enough for the device, power supply, and all the accesories to boot.  Now, all you need is in your pocket!  Thats not a a big enough game changer for you?  3 markets...Enterprise, Value Phones, Flagships.  2 of the 3 will care about continuum.  Is MS abandoning the consumer market?  If you want a "Boost Mobile/US Celluar" phone, yes...if you want a feature rich device, no.
  • Daniel, no offense or disrespect intended, but you're putting lipstick on a pig here. This is not good news and I'm saddened to see you try and spin it that way, as you IMHO are doing a disservice to your audience. I really love and believe in the WP vision, but there seems to be a time where one needs to see things as they are. Sure, we'll see the two flagship phones and whatever else is in the pipeline that fits the new strategy, but MS building phones will be reevaluated in a year or so and I can't come up with a scenario that gets them better than their current 3%. Then it's bye bye - let the OEMs build them (at which point, why would they). I don't want to sound the fire alarm - but it was already ringing and I'm just pointing it out.
  • It's his job, and more importantly, his job is on the line. Let's face it: A Microsoft without devices, a company built around backend services, productivity apps, and secure email will be about as interesting as IBM. Been to any IBM fansites lately? Seriously,  the writing has been on the wall since Nedela took over. He was from that part of the company, and until his promotion was quite open about what be thought of things like phones and game boxes. He's acted more quickly then I would have thought. I expected to be reading this in the fall of 2016 His strategies are plain to see. Damn with faint praise, create big expectations and deliever small beans, andfinally waiting.  Windows phone was dead when Nedela killed McLaren. Sure, it was because they were "overreaching" and wouldn't be ready in time! In time for what? Was there a deadline for releasing that phone? What were they not going to be ready for? That's about as lame a statement as it gets. Hololens is poised to fail as consumer product. Not because AR isn't cool or potentially useful, but because it's been sold as one thing (an immersive AR world overlaid on the world around you), and built as another thing entirely (a porthole into an AR world). It won't work.  And then there's XBox. It's rolling along, the cost are sunk, it still doing ok, just wait. When Sony kills the PS4, regardless of any PS5 announcement, just pull it from the market. Software and services... that's what Nedela likes. His actions are quite clear, the rest of this stuff can take a flying $@#!.
  • Remember when Motorola did that years ago? No one cared then and they won't care now unless they have full Windows. Windows RT is just as useless as the Motorola attempt. Posted via the Windows Central App for Android
  • Motorola required an expensive dock, and it didnt run office...
  • Why not spin it in a way to highlight the positives - they are preparing for an exciting release and just focusing in more limited areas
    It's worthless trying to sugar coat changes like this with too much PR spin, because the media will see through it straight away.       
  • How is that even possible that Microsoft does something and Daniel sees a problem in that! Now I'll go read what he wrote.
  • IMO
    Surface phone Pro(business), Surface Phone(Flagship) and Surface Phone mini(budget) lose all the confusing numbers and brand the year of release. I hate telling folks I have a Lumia 1520! Response 9/10 a WHAT? Just fine a simply name. Seems to work for the competition. IMO
  • Lets hope they are not called 940 or 940xl. They need to start a series like the galaxy and iPhone. The first windows 10 phone should be called *insertname* 1.
  • I may agree with you , but NOT surface phone...
  • This sounds like the way Microsoft needs to go. So if no one understood the last couple articles or Nadellas letter to his employees, here is a version of the letter and their strategy that might be a little easier to understand: "So basically, we cant be like iPhone and try to be our own phone manufacturer, but we also cant be like Android and sell a major clusterf**k of the same cheap devices that are more or less capable of doing the same things as each other. Instead, we'll do a major cutback, meet somewhere in the middle by focusing on creating one or two devices per segment of customers that matter most to us that we'll update each year for each of those three categories of customers that matter most to Windows phone: Business people who want Office and Continuum to get work done, nerds who want high end devices who want to waste away the expensively produced technology to take ugly selfies, and people that are tight on cash but want something that performs decent for the buck. In the long run, this cutback on our devices will give much more room in the pie to other OEMs, and hopefully will intrigue such companies like Samsung, LG, Lenovo, etc. to jump back into the Windows phone business, show us what they can really do and prove that they can match or exceed our hardware offerings to take advantage of our software offerings, all while appeasing to the three customer segments mentioned earlier. Basically, we're taking the same strategy we did with the Surface, but with phones now instead. As for the 8k people that current work here, unfortunately your services are no longer required at this moment, but we'll give you a buzz when something comes up. Here's a $50k severance package to help you on your way and have it be our way of thanking you for your service."
    -Sats This is a slightly different approach than what Android and iOS is doing, and I think this new strategy is all Microsoft has to hope on now to allow windows phone to succeed and be taken seriously.
  • Well said, Daniel. Keep it coming.
  • Good article, explains everything clearly but you cannot please wrist slitters, the doomsday theorists won't even leave this place as they are addicted to this community.
  • greast article, it makes alot of sence.
  • Well said Dan, well said indeed!
  • The future of Windows Phone is starting to look brighter.
  • Great piece Dan. I agree the strategy is spot on and will hopefully have the same effect as the Surface line. Exciting times. Also would like to add how sorry I am for those losing their jobs. It's horrible for anyone going through that kind of thing.
  • For enterprise I would love a Skype for business monster. Amazing FFC would be awesome.
  • Not sure what you're saying in your comment.  Did you know that Skype for Business is available on Windows Phone?  I believe they released it within the past week.
  • thank you Daniel...this was enlightening after a frightening day for windows mobile fans
  • Once again a brilliantly written article Daniel!
  • 100% Correct
  • brilliant article Daniel.
    Ground-breaking discovery by Microsoft. I might not switch finally now if this is how systematic things are going to get! :D Deliver very few products, but let them be the best of all. Perfect.
  • This is exactly what I am thinking... "and Windows too"...
  • Here here!
  • Amazingly explained the whole thing Daniel Rubino. And there are few people who don't understand what u write leave them, and ya don't make your image dirty by giving bad words to them u are nice writer every one knows.
  • Nice write-up and I think it makes sense as you say to consolodate like this. The only negative (apart from people loosing their jobs) is the lack of camera flagship.
  • So Samsung is going to care about Windows Mobile now? I don't think so.
  • Exactly no
    This isn't going to work , it's already not doing well with android
  • I doubt this is going to win over Samsung, but I'd like to see S6 quality hardware from them running Windows 10.  They make great hardware, but customizations to Android hold it back from its full potential.
  • Agreed. Work issued me with a Galaxy S5 and it's pleasingly fast (at loading apps) but is crippled by the Samsung bloat added to it. Battery life was about 9 hours until I removed touchwiz and a few other things. My wife has a Samsung Ativ S, which is roughly the same spec as a Galaxy S3, but runs Windows Phone 8. I see other people throwing away their S3's due to performance these days, but that Ativ S keeps on kicking.  TL;DR Samsung needs to stop trying to make software :P
  • "So Samsung is going to care about Windows Mobile now?"
    Samsung is a corp, not a fanboy. They care about making money. If they see an opportunity to make money with Windows 10 Mobile, they will. If they do make money, then they will certainly care about it. Samsung's only allegiance to Android can be summarized like this: $$$$. Same with every other OEM on the planet.
  • I disagree....Microsoft is going to kill Windows Mobile/Phone(See the news/youtube coverage comment...everyone will comment its the end of windows phone R.I.P.)
  • Well if by killing it they are making six Windows Phones a year, I'm fine with it.
  • :D ...
  • Not that long ago the press said this is a new era for Microsoft and praising Windows 10 on all platforms.  The head lines read "When did Apple Become the Boring One". Popular opinion is nothing to go by.  A company's actions and reasoning behind them are more reliable.  MS has new life with Satya Nadella, and I'd say it has worked out really well so far.
  • people have been saying MS, xbox, surface, windows, azure, sql server, etc are RIP every since they learned to read 9to5mac :)
  • Yes, they are and the best way to prove otherwise is to follow through on Nadella's plan. He does need to clean up the corporate speak and more plainly set the course for the media that has consistently bashed everything MS.
  • Dan's word of the day, "screed".
  • OMG - if you want a definition of poor reporting, read Rory Cellan-Jones commentary at the end...
  • Please give a worth 925 upgrade and everyone is happy
  • The Lumia 930/Icon are great upgrades from the 925.  Too bad it doesn't have the AT&T 4G LTE bands builtin, but I'm currently using a 930 in the USA.  I upgraded from a 920.
  • I have high hopes with Windows 10 and the direction it is going.
  • This is one of the best sci-tech article I've ever read. Thanks Daniel.
  • Unfortunately the article misses a couple of things: 1) Basically all mainstream press today (and in the coming days) is wrtiting about "Microsoft's giant smartphone flop". Bad publicity doesn't really help when you want to sell phones again in three months time. Also doesn't help to get developers on board. 2) The showcase devices are really just that: showcase devices. They won't be released in all markets and will only have limited availability - similar to the Microsoft Band (from Daniel's MS Band articles I know that he likes this idea. However many others - especially those in India - are not very big fans of that concept). 3) Wording is everything. Microsoft only speaks about "near future" or "short term". If a company says: "We don't have any plans to abandon our smartphone business in the near future" it basically means they'll abandon it. Remember Nokia in April: "We don't have any plans to get back into the smartphone business in the near future." 4) Mircosoft is writing off the whole phone devision. $7.6 billion, that's even $400 million more than they paid for Nokia. So they basically admit that their whole smartphone business was a complete failure and they don't believe that they'll have any success in the future.
  • I reckon Daniel will be writing an article on why it's good Satya has been replaced in a year or two.
  • I have no firm opinion on Nadella yet, TBH. He's doing stuff and making a lot of changes. Some I agree with, some I worry about (he's less enthused about HW). Will know more in 2 years, actually ;)
  • I like Nadella as well, but I do worry about his hardware beliefs. Leaving hardware 100% up to partners is one reason for the perception of the lack of quality around Windows. Good reference hardware is important.
  • Totally agree with point two. I don't like the sound of "first party" device. Indonesian never have access to Surface, which also is the "first party" line up. With OEM hesitation to make flagship WP, fans in countries without MS Store will get no love from Lumia and will be left with mid/low WP handset. Great Satya.
  • Too bad they're spending resources on Windows 10 mobile, continuom, new devices beyond phones, running full desktop apps on a phone, and more.  Why would they spend all those resources to just abandon it?  Windows Phone is a distant third in the USA, but in several European countries it is second and growing.  Could MS abandon the platform.  Sure, just as much as they could abandon the Surface line (a success btw).  Time will tell, but MS has made it clear through their actions that their mobile presence isn't going down without a fight. 1) The press not long ago was singing praises for Windows 10 on desktop, laptop, tablet, and mobile.  Headlines read "When Did Apple Become the Boring One".  Popular optinion changes by the hour. 2) MS isn't the only company to not release a device globally.  I'd bet only Apple releases all their devices globally because they have a finite number of devices.  Sounds like MS is narrowing down their offerings to get closer to this model. 3) Yes wording is tricky and can be troubling, but I'd pay more attention to their actions than words. Ask a question and you'll get an answer.  Slightly change the wording of the question and you could get a totally different answer. 4) Their mobile division is far ffrom a failure.  Windows Phone has a larger market share than Blackberry.  I personally consider Blackberry a failure in their current state.  What has really hurt MS is taking so long to release a new flagship device.  When they/Nokia were consistently releasing 2 a year their market share was the only one steadily growing.
  • I agree. This basically will translate into a huge loss of confidence. The public perception was already bad and it will now get even worse. I don't expect many developers wanting to invest time and effort in the platform. Long time customers like myself might finally give up and jump ship, seeing the platform's future as uncertain.  
  • Just becouse they cant read? or jump to unfounded conclusions? Microsoft is not saying in anyway there abandoning Windows Phone, actually they are reorganizing there phone business in a way they think they can be more succesfull. So how would anyone say or think this is the end of WP?!
  • Wow, the Lumia 930 is not in that chart..... No mention of the Icon... Overall - this sounds like good news!
  • This is my final take on this article; When I grow up, I want to like Daniel Rubino, there is no way I would not score A in any writing class. Good job again.
  • lol, thank you
  • One of those flagships better come to T-Mobile
  • Most any GSM/LTE phone works on T-Mobile. Posted via the Windows Central App for Android
  • And the negative apple loving press will use this to fuel the "windows is dead bs"!
  • Meaning, there will be no "first party" MS phone in Indonesia soon. Just like how Surface never land here. If that's the plan, then WP fans here would only get phone from half-a**ed OEM.
  • Great article.  I can't wait for the next Ask Dan episode.
  • Well earlier some mentioned a note 5 device running windows 10M. I'd like that a lot. I think many of us would like to see that flagship device.
  • Good article!
  • Withdraw windows phone from murika and its absurd Telcos, may be things will move forward.
  • Great writeup, Daniel. Well written, clear distillation of what Mr. Nadella announced today. I love his plan, too. That there even is a clear, concise plan is something in and of itself, really. They haven't really had one in the last year or so and seemed to have been floundering. Or maybe it was just treading water and trying to gain market share with all the low price stuff they put out while they got Windows 10 squared away and finalized their plan for mobile. I can't wait to see how this plays out, and I can't wait to see what the flagships bring to the table. I hope they are sexy as hell and can sit proudly next to the S6s/S6 Edges/G4s/iPhones of the world and not look out of place. I'm hoping for some cool new features, impeccable build quality, and some serious "wow" factor in their design. Bring it, MS!  
  • This reminds me of the same sort of positive spin they put on ending Zune hardware. ( I understand they are continuing hardware so save your reply) The "lets make lemonade" of this situation is what they have to do. I could sum up the reasons why I think this IS alot more negative but it doesn't really matter. I just feel sorry for anyone who plops down 600+ for a flagship this fall. I just wished they would do right by there customers and don't fool them into purchasing devices they don't plan on continuing..hello surface 2
  • Daniel, are you convinced that the 640 line is low enough to reach that huge and growing emerging markets segment? If MS is simplifying and the 640/640XL will represent the new entry point, are you concerned that this puts all those people who bought 5XX and lower-end 6XX without a affordable sub-$100 replacement?  I also think the idea of business-focused hardware is a bit of a fools errend. It's a vibrant market that the iPhone dominates without any business-centric hardware features. It's not like the Blackberry Classic or the Passport are hits. Maybe Continuum changes the game allowing the phone to be essentially a modern day thin client, but I'm skeptical.  It looks like the selfie-focused 730 and the all-round 830 will be the end of the line as far as mid-range devices tagreted at teens and young adults who can't afford a iPhone or other flagship which I think is a mistake. 
  • Yeah, honestly I don't know what MS considers "low" or affordable here, so it's tough to say. But yeah, personally, I think 640 is low enough, even though that will cut out some users. Should be interesting to see how this actually pans out.
  • Daniel, Thanks for a well written, concise and accurate description of their plan.
  • I'm still affaid. This move is make to convince partners to join windows 10 mobile. What will happen if oem doesn't care about windows mobile?
  • I totally agree. It is unfortunate for those who are being laid off but the decision to launch limited phones in the three outlined areas means less waste and more ability to come to market without confusion.
  • Worth noting: how much of the proliferation of low-budget devices is due to "carrier exclusivity?" AT&T wanting their own 520 while T-Mobile has a 521? etc...
  • "More importantly, Nadella defined three areas in which Microsoft will build Windows Phones: Business hardware
    Value phone buyers
    Flagship devices" Actually he didn't say that. He said for business: " We'll bring business customers the best management, security and productivity experiences they need" That could mean software only. For value phones: "value phone buyers the communications services they want" Again, could mean software only. Flagship devices: Now, he actually mentions hardware. How could anyone read all this as bad news? Because based on things that have happened, and not wishes for the future, the strategy MS has employed has failed, hence, they kill 8000 jobs. Sure, maybe their new plan works out, but that's not actual "good news", it's hope for future good news.
  • Thank God. They have to many phones as is. Glad to hear they're making a smart decision.
  • Disclaimer: I own a Lumia 1020 but switched to Android.   This is a weird announcement. You are just about to launch Windows 10 Mobile but the first announcement is that the platform is on life support. How would you feel as a potential purchaser. Amazing PR!   
  • Obviously they don't care. They know that their Mobile efforts are dead and that Windows 10 isn't enough to change that. They will release "flagship" phones this fall, they will fail and they will continue to slowly back away from mobile. Posted via the Windows Central App for Android
  • I wonder where Microsoft would have been had it not bought Nokia in the first place and had invested time, advertising and technical help to the other big OEMs to make the mobile phones for them. Probably we could have seen the equivalent of the Samsung S6 edge by now on the Windows OS. I think it was a mistake tgo buy Nokia! Balmer was not a visionary man like Nadela. Remember all the previous flops that he came up with. Anyway, I think it is good that they have a focus and finally a clear strategy for the mobile. 6 phones a year is not bad, apple does it with 2! Reminds me of the analogy of restaurants that focus on only few dishes and make the best, and others who come up with 50 choices and one is worse than the other. I agree with Daniel on this one, this is a good news. on a personal note, I just love my 1020 and even though now it is old, I kind of know that they will not be going crazy with camera spec again, so I will settle for a good 940XL. Good screen, processor, thin and Windows 10 OS - which makes porting iOS and Android apps portable to Win10... that's all we ask for!
  • Whatever the future holds, my (modern day toy) mobile phone can be replaced with whatever is on the market next. Some families tonight will have an uncertain future and concerns regarding bill payments etc. I hope that the industry grows and they find new employment soon.
  • Like everywhere else these days: screw the middle class.  It's either a cheap and underperforming phone, or sacrificing your firstborn for a flagship.  I hope the "business" offerings are code for something in between.
  • Oh yeah, Daniel agrees with something Microsoft has done, who could have guessed.
  • What does 'write-down' exactly mean here?
  • Write off. Ie money burnt.
  • I never really understand what a write-down is either, but I think it means that Microsoft says that it's in the loss column, and thus it impacts their taxes etc. Basically they are saying it's money down the drain for them... Or something? :)
  • I like the idea of three phones across the board. When it comes time to update, it will take no time to test before releasing to all. Three segments, six phones a year. That's two phones per segment, per year. Easy to keep up with.
  • Well written Daniel! Couldnt have worded it better.
  • Daniel, thank you for this level-headed piece of fine journalism, rather than the sensationalized "sky is falling" rumor that often passes for such. I wholeheartedly agree with what you have said regarding Microsoft's strategy here, and in your Microsoft and the Future of Windows Phone and Windows 10 article. The closer Microsoft's phone strategy can align with their successful Surface strategy, the better. The entry-level phone proliferation had definitely gotten out of hand. Ideally, I would like to see one very iconic entry level model. It could come in many colors, swap out different radios or dual-SIM for country variants, etc., but it would effectively be ONE phone. It could even be built using last year's midrange tech inside. Such a phone would be well known and recognizable, as in, "Hey, is that a Lumia One?" This will likely lead to loss of entry level sales (which as you mentioned, are 60% of the WP market currently), but is necessary to allow other players to enter the field and gain a foothold. It will also help to build a more identifiable brand for Microsoft Lumia, rather than simply inserting cheap phones wherever possible at the bottom of numerous markets. The business phone seems like a wise choice, and I am curious in which direction MS will take this venture. I suspect such a phone would take over the mantle in the 640/XL to 830 range. Having a dual-pronged approach with an XL model would also allow PDA/tablet-like work to be completed on the go--but many will not want to pocket such a large device. Both should feature continuum. Last, but not least, the flagship device for us diehard fans. I really hope to see Microsoft flex its muscles here. Include specs and features that no Android or iPhone can match in order to set Windows Mobile apart as not simply different, but better. One such example is the 41mp camera from the 1020. Even if 20mp is enough to currently be competitive, I'd like to see Lumia displaying a clear superiority with at least 30mp. The ability for digital zoom without pixelation would be one of those defining features. The dual-pronged XL approach is also relevant here, as it seems will be the case with the coming Cityman/Talkman models. However, one new flagship (in two screen sizes) every 18 months seems reasonable to cut overhead. More importantly, these devices, at all levels, should support radios for all carriers so that each new phone (with Windows Mobile already being a niche player) is accessible to more than at most 1/3rd of the market. A phone that might have 3% market share is massively crippled when only available on say AT&T, down to 1% market share or less. Even if the carriers will not stock and market them, Microsoft can still sell and support them through their stores and online (which is basically free marketing for the carriers, so they will likely support this). Here's hoping to see this new strategy bear fruit.
  • There's NOTHING "good" about making the lives of 7800 families miserable, particularly when it's due to inadequate bosses! Over the past week I've been torn between keeping for myself a Lumia 640 XL or a Huawei P8 Lite. NOW, I'm selling the Lumia tomorrow! So long "restructured" company!
  • As someone with the "full-fat" P8, I think that's the wrong choice right now. Software on that thing is all over the place.
  • As someone who switches phones every two weeks I'm convinced that I'm making the right choice, particularly when I'm talking about the european version of the phone.
  • I think Microsoft's strategy here is correct. Will it make Windows Phone a viable alternative for the average American shopping for cell phones? That is something I can't figure out. I just want WP to have market share so it's profitable enough for Microsoft and attracts enough developers. Time will tell if this is the right move for that. W10M will need some real killer features for that to happen, I think.
  • Sure. Not sure how much room there is in that 3% for other OEMS - at least in the short run - even if MS scales back models. :p Another spin on this could also be that MS or Nadella is less confident in ability to capture market share and grow sales and this means costs of this business lins must be cut dramarically. So not sure it's all good news either (besides the loss of jobs). Would of course also be interesting to know how many of those 7800 (and in particular the 2300 I'm Finland ) worked on Lumias vs. feature phones. Posted via the Windows Central App for Android
  • At some point the cheerleading ends.  Until then, the hive mind at WC offers attaboys and thanks and great chicken salad!  Just like they attaboyed the million variants of crappy phones, low end works they said moar is better.  Release under exclusive 500 variant for Tonga!  Who needs apps we heard, I didn't use such and such anyhow.  Everyone boycotted BofA and the other banks, but I don't see them taking 8 billion dollar write downs.  Very well written, this is super, I agree completely...over and over and over while the platform fails and flounders and now devs are going to be spooked to even bother.  The party's over and its a tragedy because WP was a much better OS than android. 
  • "Just like they attaboyed the million variants of crappy phones, low end works they said moar is better. "
    You mock this but it is the one part of the previous strategy that worked. Windows Phone is huge in India and Brazil and other emerging markets (even 10% in Italy). As to the rest, sure things have gone bad/not improved. I just don't see how Nadella being honest and setting a new course is bad. We do want him to fix things, right? What would you do that is so different?
  • 10% share of low income users is a failing strategy and was always a failing strategy.  The world of making money in this business begins and ends in the US and to a much lesser degree China.  They told devs not to bother with the platform when they gave up on flagship phones and WP is too far behind to ever catch up.  Europeans don't spend enough money.  Same with India.  In my opinion it is over, this is unfixable.  The entire platform will be unceremoniously wound down 12 months after talkman comes to market.  I do hope I'm wrong, but this was not good news just another signal that the situation is dire and getting worse. 
  • So, Thomas Edison just gave up when his first light bulb design didn't work? The Ford Motor Company declared bankruptcy when the Pinto turned out to be a literal bomb? People and companies change directions or attack things from a different angle all the time. That's how we got a working light bulb and the much more successful Ford Escort. Rather than doom and gloom, this should be cause for excitement since Microsoft is focusing on the areas in mobile they are strong in and we'll be getting flagships.
  • I hate how Microsoft acts like these manufacturers can make windows phone devices that are not old and amazing and do great advertising, NEWS FLASH these companies and carriers don't give 2 shits about windows phone how about u now worry about what they think or if u offend them, u need to take the reigns and do something.
  • Thanks Daniel,   I'm a flagship phone kind of guy so the fact they intend to focus there for one of their key efforts is encouraing to me. Maybe Samsung will be encouraged to compete at that leve as well, or HTC could bring their best effort to that segment as well with a Windows Phone version of their M-series phones!
  • Disheartening news.  I see it as the middle of the end for Microsoft Phone covered in BS strategy speak (the beginning being their inability to produce a recent flagship phone and the bad decision to run Android/iPhone apps - giving devs no reason to develop native apps.)   Three reasons: For a developer another reason to wait and see and developer's waiting is the last thing Microsoft Phone needs. The layoffs just provide more fodder for the carriers and their reps to badmouth microsoft phone as a viable choice within their collection.  Focus on value, business, and flagship phones?  That's the same thing they're doing right now, except the business and flagship phone part.  Now they're supposed to do it down 8000 people?  There will continue to be no flagship/continuum phone this year.  Surface will go down next as MS reverts back to being a purely software company (save xbox), with hardware partners exclusively for the PC OS.  Sorry for the pessimistic view (as i really do enjoy my windows phone and can't stand android) but the writing is on the wall.  
  • Again comes for the rescue.Thanks for making young minds feel comfortable, Daniel sir.Whenever you write an article based on deep thinking, you have to again shed some sweat on comments for better understanding of people.So much patience and too much efforts.Btw If you won't mind can I take 2-3 phones from the bunch that you threw at your garden?Anyone.
  • "they were wildly successful" lack of support software side, worsened nokia business eventually Lumia was growing but not nokia
  • When I walk into a store . Let me say when most people walk into a store and see a Lumia first thought it budget device.i have this gut feeling that if when MS puts out high end phone it will be exclusive to one carrier. Which this time around I'm not waiting.
  • It wasn't good for 7800 people that are now unemployed. But screw them as long as the stock price goes up, right? Sickening.
  • Here here. Well said Daniel.
  • After having made the switch to iPhone, my family gets the best of both worlds: A flourishing platform and the best Microsoft has to offer.  Office, Bing and MSN apps are EXCELLENT on iOS and we can use all of the Microsoft services without any issues.  Deep down, I know we will return to Windows when it's time to upgrade our current devices IF developers believe in the Windows mobile platform as much as Microsoft and so many here believe. Until then, we couldn't be happier to finally be able to participate when see or hear "Just download our app from the App Store or Google Play."
  • If we end up with Microsoft having 3 Lumia models that are carrier-independent, it will be a huge win for Windows Phone.
  • Microsoft can reorg WIndows Phone all they want but they are the tech equivelent of 3rd world at this point and its not going to change. People need to accept that. Android has won the overall space(they are essentially the Windows of mobile), and iPhone has a solid second. They were late to the seachange that happend when the first iPhone was introdeuced and it cost them. I personally like Windows Phone as an OS but I also can the a blunt reality of its future.
  • What I expect (and hope they do) after this announcement of the following: When they release Windows 10 Mobile this fall they will do it at an separate event. Announcing: 2 (very compelling, something no Android OEM is offering at that price) entry level Lumia devices running Windows 10 Mobile (at 4.6 inch and 5.5 inch) 2 business centric devices (that obviously would include continuum for phones) at a compelling price point (mid – tier) (at 4.6 inch and 5.5 inch) 2 treu flagship devices with all the bells and whistles to showcase the very best Windows 10 Mobile can offer. (at 5 inch and 5.8 inch) A Surface Mini tablet (at 7 inch.) This simple but complete line up of Windows 10 Mobile Lumia devices should be launched globally (and in the case of the USA on every carrier simultaneously) within 2 weeks after the announcement. to kick-off Windows 10 Mobile with a bang. And addition to all this they should launch a global multi billion dollar add campagne to raise consumer (and business) awarness for Windows 10 Mobile. I mean full samsung style literally in every corner of the world, after a view weeks I want to be sick of seeing Lumia/Windows 10 mobile adds everywhere! They just need to have a brilliant strategy and stick to it (I think a smaller selection of devices is a great strategy with quick launches could be this) and then put the full weight of Microsoft (billions of advertising dollars) behind it to take the mobile space by a blitzkrieg!
  • When your are being run out of town make it look like a parade. 
  • Daniel, I think out of all the journalists I have read today about the Nokia right down, you are the only sane one. Nokia’s phone business was not going to work inside Microsoft, taking the “Surface” approach to phones will reboot it for the final time. Microsoft’s new course of action could have been taken without Nokia, thus the write down. Microsoft has never “got” mobile but this is the best vision so far, a few great devices that span targeted segments, a great development platform, and a OS that should have legs for years to come, instead of scrapping the phone OS every time the wind changes. Even Paul Thurrott is getting into the doom, I usually agree with Paul but this time I think he is a little overreacting. If Microsoft does not finally get a stable share of mobile it will eventually undermine their whole OS strategy and just become a cloud provider. It is going to be noisy for a few months but looking forward to the RTM of Windows 10 Mobile and new devices. Sometimes you need to prune the tree so it will grow.
  • Lumia naming convention is confusing for people not familiar with the platform. Lumia has too many devices to hold a single name. Samsung has galaxy,series but specifies a name like S, note with a number to differentiate. Apples phones are all iPhone, but they release one or two devices a year.
  • Rubino has taken leave of his senses here. MSFT killed WP. They'll probably, although it's not guaranteed, push out a few WP10 devices then officially kill it (i.e., announce the termination of the entire project).
  • Yup. If they were serious about mobile they wouldn't have released this news right before their flagships and new platform are to come out. This doesn't inspire hope in anyone! Posted via the Windows Central App for Android
  • GREAT ARTICLE really enjoyed reading and agreed with every point. I said this 1000 times but I hope with the redefined focus with the device releases I hope they adapt what Apple and Samsung do with their device and just release it on all networks at the same time. Instead of what they're doing now for example this device on ATT, next another on T-mobile, then maybe one on Verizon, and a slim possibilty on one on Sprint. Make the devices  available to everyone and cut down on the different SKU's and i would be a happy consumer.
  •   fox news says  
  • Daniel you're one of the very few cool heads around - it is sad that you actually have to spell it out like this
  • Hell yeah, bring on the Flagships as soon as they and Windows 10 Mobile are ready to go and I'll be right at the front of the queue to pick one up. My contract comes up for renewal at a very convenient time.
  • While I agree, it seems that some people that are echoing this point, were also jumping on commenters who thought the massive wave of similar low end devices was a bad idea. Posted via the Windows Central App for Android
  • I just can't see other OEM's getting in to Windows, the market just isn't big enough. 
  • Thanks for writing this. This is why I avoid the general tech press (Gizmodo, WIRED, The verge) and stick to sites like this. Thanks for not going for cheap, click bait, Fan Boy baiting headlines & misleading articles. Thanks for being responsible
  • wow...reading some of these comments...i really wanna know what planet these guys are living on and smoking... in case you forgot nokia was a dying brand until MSFT came along and gave them life.
  • Well I've got to admit I'm a little sad to see the barrage of new phones coming to an end. While Ms was exploring the market there were always new devices to read about. It was an exciting time in Windows phone history. Of course im not a high end type. I like looking at phones i can actually afford to buy instead of ones i can only dream of. I just can't afford $700 dollars for a phone since going off contract a year or so ago. But i still want that awesome Wp experience.
  • A good read
  • Not to sound cruel but you don't need 7,800 dead weight to design phones, Microsoft does not want to be or need to be a hardware or device company. Yes I understand that they make the Surface and Lumia phones but it's cheaper for them to source out the making of them, at the same time it's better for Microsoft's panthers who don't feel like they have to compete with the company that makes their OS. I don't see all the fuss with everyone running around like idiots, we all knew this was going to happen. Microsoft got the Nokia phone patents and people who made them, those warehouse, manufacturing employees just came as part of the deal to justify that $8 Billion. It was about time this happened, look at Apple they don't have 10,000 people making their phones, tablets, and PC...It's all outsourced. But everyone is on that stupid train and will ride it off the cliff.
  • I desperately want a new phone. My 1020 feels slugish and the camera is so slow... I've been having a problem for a while now where it gets stuck at saving but will never save, and the only fix is a reboot. Looking forward to Windows Hello! Not just for phone but on my surface and desktop pc.
  • We should all celebrate!  High end phones are coming.
  • It's still the apps, stupid.      
  • So I just pulled up both this article and Paul Thurrott's analysis; two pretty much opposite opinions from two different Windows fans. I'm mostly agreeing with Daniel here though. I think we need a phone that is so impressive that people will switch. Hopefully by focusing on fewer models, this can be achieved. Also I think if they decide to kill off Windows mobile, Apple and Google are going to use their marketshare to conquer the desktop/laptop market as well. Microsoft does not want this to happen. They may not want to be in the hardware business long-term, but until they are satisfied that their OEMs are producing and selling Windows-based phones, I don't think they will let go of Lumia.
  • Daniel - spot on! There has been too many options not just in other markets, but even across US carriers. Reduce to a handful and then promote the hell out of it with the carriers directly through incentives.
    I recently had to switch to a S6 for a work app not available to WP - the camera is quick, and there is some background recognition of what I am doing in a good way. But to your comment, the touch wiz interface is a mess that I wish was more like the simplicity of WP.
    Supported Hero phones will change impressions of Windows Mobile - both for Lumia and other OEM's