Sounds like progress for Microsoft with phones.
Not that I'm happy that people are being laid off or any such thing. But this certainly sounds like things are going mostly in the direction that I had hoped they would for Microsoft's phone offerings.
The memo is actually surprisingly detailed. The only downside is that it makes me no longer want one of the new flagship phones being announced and instead makes me want to wait for the first devices which bear the fruits of this corporate shift.
I could always be wrong. But to me this sounds like Satya and the board are aware of what Microsoft's (and Lumia's) strengths are and have re-aligned their business around that. The Lumia lineup delivered great quality budget phones and (when they actually released one) stunning flagship devices. Microsoft hardware has always shown an excellent focus on enterprise and flagship hardware as well. And, lo and behold, those are the 3 customer segments they are targeting now; quality budget phones, flagship phones and enterprises.
The only flaw I can see is that they may be too late to target enterprises directly. So, if they plan on releasing an enterprise centric product line it could fail massively. At this point, the smart move would probably be to focus on the other two segments and just make sure that both phones have everything that they need to be used in an enterprise environment. Most enterprise are BYOD as far as phones are concerned. And they may already know this. Nothing explicitly said that this change meant that they would be making 3 phones, or 3 lines of phones, just that their focus was on these three segments.
Now, some people may be looking at this and comparing it to Google and Motorola and thinking that Nokia was a bad acquisition. In fact, people expressing this sentiment is exactly what prompted me to go searching and find the above article. And, while it is safe to say that the purchase probably wasn't as profitable as hoped for, I don't actually think there are any parallels to Motorola acquisition at all and I also don't think it was a bad move.
With Google, Android wasn't really in a position where it needed any one specific OEM, and their market wasn't in decline or a minority player. Even if Samsung stopped making Android phones it likely wouldn't overly hurt Android on the whole for very long. In fact, this is largely why Samsung doesn't sell Tizen phones in North America. Motorola also wasn't the biggest OEM Google had. In fact, they were suffering quite badly. Google also didn't but Motorola for any reason directly related to the production of handsets.
The exact opposite is true for Microsoft. Windows Phone needed Nokia. And Nokia was clearly, seriously thinking about an exit from the platform or at least a foray elsewhere as indicated by their short lived Android based lineup of low end smartphones which was killed pretty much right after the takeover. The acquisition brought their largest OEM wholly back into the fold and kept what little stability was possible in their market. If Microsoft hadn't bought Nokia, the Windows Phone market would quite likely be much worse than it is today. And yes, I know it isn't stellar today either.
Since they remain committed to phones, this seems like a smart move on their part. It was a costly move for sure. But it took them several years to build up the relatively small user base they have and would likely have cost them more than that $7.6B write off if they had needed to rebuild it a second time from scratch.
My expectations are 2 phones in the same vein as the Surface and Surface Pro, though I hope they won't try and re-use that brand. Perhaps just a Lumia and Lumia Pro without the model numbers like "1020" and in different internal storage configurations like an iPhone or Surface device. Make the Pro version Pentaband so it can be sold globally and able to run on any carrier. The non-Pro model should support fewer bands and offer a couple regional variants but keep the rest of the hardware the same. This should streamline both cost and efficiency.
The reason why this makes me not want one of the 2 new rumored devices however is that with the massive layoffs, the write down of the Nokia purchase and the clearly stated shift in focus for phones, you can probably expect the support and love for existing Lumia products and those that were near the end of the production pipeline to die off over time and the focus to shift to the future products. This had already started happening for some phones after MS took over. The Lumia 1020 for example never really had any effort into improving camera performance.
Under Nokia, it felt like every phone had a dedicated team looking out for its owners. And, I think that things will return that way. Surface Pro owners get that sort of love from Microsoft. And once the product line is streamlined and gone through an iteration or two, I think we'll see the same with regards to phone hardware again. Just that I expect that along the way, many of the devices currently in the field will be abandoned.
The memo is actually surprisingly detailed. The only downside is that it makes me no longer want one of the new flagship phones being announced and instead makes me want to wait for the first devices which bear the fruits of this corporate shift.
I could always be wrong. But to me this sounds like Satya and the board are aware of what Microsoft's (and Lumia's) strengths are and have re-aligned their business around that. The Lumia lineup delivered great quality budget phones and (when they actually released one) stunning flagship devices. Microsoft hardware has always shown an excellent focus on enterprise and flagship hardware as well. And, lo and behold, those are the 3 customer segments they are targeting now; quality budget phones, flagship phones and enterprises.
The only flaw I can see is that they may be too late to target enterprises directly. So, if they plan on releasing an enterprise centric product line it could fail massively. At this point, the smart move would probably be to focus on the other two segments and just make sure that both phones have everything that they need to be used in an enterprise environment. Most enterprise are BYOD as far as phones are concerned. And they may already know this. Nothing explicitly said that this change meant that they would be making 3 phones, or 3 lines of phones, just that their focus was on these three segments.
Now, some people may be looking at this and comparing it to Google and Motorola and thinking that Nokia was a bad acquisition. In fact, people expressing this sentiment is exactly what prompted me to go searching and find the above article. And, while it is safe to say that the purchase probably wasn't as profitable as hoped for, I don't actually think there are any parallels to Motorola acquisition at all and I also don't think it was a bad move.
With Google, Android wasn't really in a position where it needed any one specific OEM, and their market wasn't in decline or a minority player. Even if Samsung stopped making Android phones it likely wouldn't overly hurt Android on the whole for very long. In fact, this is largely why Samsung doesn't sell Tizen phones in North America. Motorola also wasn't the biggest OEM Google had. In fact, they were suffering quite badly. Google also didn't but Motorola for any reason directly related to the production of handsets.
The exact opposite is true for Microsoft. Windows Phone needed Nokia. And Nokia was clearly, seriously thinking about an exit from the platform or at least a foray elsewhere as indicated by their short lived Android based lineup of low end smartphones which was killed pretty much right after the takeover. The acquisition brought their largest OEM wholly back into the fold and kept what little stability was possible in their market. If Microsoft hadn't bought Nokia, the Windows Phone market would quite likely be much worse than it is today. And yes, I know it isn't stellar today either.
Since they remain committed to phones, this seems like a smart move on their part. It was a costly move for sure. But it took them several years to build up the relatively small user base they have and would likely have cost them more than that $7.6B write off if they had needed to rebuild it a second time from scratch.
My expectations are 2 phones in the same vein as the Surface and Surface Pro, though I hope they won't try and re-use that brand. Perhaps just a Lumia and Lumia Pro without the model numbers like "1020" and in different internal storage configurations like an iPhone or Surface device. Make the Pro version Pentaband so it can be sold globally and able to run on any carrier. The non-Pro model should support fewer bands and offer a couple regional variants but keep the rest of the hardware the same. This should streamline both cost and efficiency.
The reason why this makes me not want one of the 2 new rumored devices however is that with the massive layoffs, the write down of the Nokia purchase and the clearly stated shift in focus for phones, you can probably expect the support and love for existing Lumia products and those that were near the end of the production pipeline to die off over time and the focus to shift to the future products. This had already started happening for some phones after MS took over. The Lumia 1020 for example never really had any effort into improving camera performance.
Under Nokia, it felt like every phone had a dedicated team looking out for its owners. And, I think that things will return that way. Surface Pro owners get that sort of love from Microsoft. And once the product line is streamlined and gone through an iteration or two, I think we'll see the same with regards to phone hardware again. Just that I expect that along the way, many of the devices currently in the field will be abandoned.
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