Microsoft needs to change its mobile strategy or get out

Microsoft Corp. on Wednesday announced plans to streamline the company's smartphone hardware business, which will impact up to 1,850 jobs.

Microsoft anticipates this will result in the reduction of up to 1,350 jobs at Microsoft Mobile Oy in Finland, as well as up to 500 additional jobs globally.

The company acquired Nokia's phone business in 2014 for $7.3 billion, hoping to expand its share of the fast-growing mobile tech industry. In addition to the $7.6 billion it wrote off last year, the company expects to record a $950 million restructuring cost this year.

When asked to confirm whether Microsoft was fully halting its smartphone production, a spokesperson for the tech giant in the U.S. told AFP: "We will continue to develop new devices and adapt Windows 10 for small screens, support Lumia Phones such as the Lumia 650, Lumia 950 and Lumia 950XL, and phones from our OEM hardware partners like Acer, Alcatel, HP, Trinity and Vaio". This miscalculation has proven to be one of the most costly endeavours in the company's history.

According to a report released by Gartner in May, Windows Phone OS only took 0.7 percent market share of the smartphone sales to end users in the first quarter of 2016, lagging behind iOS and Android.

Last week, Microsoft had agreed to sell the feature phone business that it acquired from Nokia for Dollars 350 million to Foxconn, the Taiwenese manufacturer.

Recode published a leaked internal memo from Microsoft, in which Terry Myerson - Executive Vice President of the Windows and Devices Group - explains that it will continue to work on mobile. Up to 1,350 job cuts will come in Finland. But no new Lumia hardware doesn't necessarily mean no new smartphones.

Microsoft has had a rocky few years as it tries to compete with the likes of Apple and Samsung in the smartphone world. With all the right ingredients in place - design, features, OS and above all, brand value, there is no reason why Nokia could once again, end up being a force to be reckoned with in the smartphones space.

Nadella, who initially opposed Ballmer's move into the handset business, hasn't publicly declared a full retreat, saying in a statement that the company "will continue to innovate across devices".

Source: Microsoft needs to change its mobile strategy or get out