Smartphone Division Layoffs Clouds Microsoft's Windows Phone Strategy

[Guest]

Microsoft announced that it will lay off 7,800 employees from the smartphone division it acquired from Nokia and will write off $7.6 billion that it ended up spending acquiring the company.

Smartphone Division Layoffs Clouds Microsoft's Windows Phone Strategy : Read more

 

[salgado18]

No, silly. They want to have fewer products, but higher quality ones. A large lineup is a great way of making every device just another one, while focusing on one good phone creates a better image of it. Imagine having low-end, mid-range, performance and entusiast versions of the Xbox One, it would be a mess to customers and branding.

In short, they are taking the Apple route: one phone, one name, one experience.

 

[FlayerSlayer]

They did that, actually:
https://en.wikipedia.org/wiki/List_of_Xbox_360_retail_configurations

 

[salgado18]

They did that, actually:
https://en.wikipedia.org/wiki/List_of_Xbox_360_retail_configurations

But all of them are Xbox 360's inside. The experience is the same. They work just like an iPhone 5S, for example, with 16GB, 32GB and 64GB versions: still an iPhone 5S, just different storage.

Compare that to the differences between the Lumia 435, 540, 640, 640XL, 735, 830, 930, etc... (not even counting earlier models still on sale)

I think it makes perfect sense: some people want cheap but good, some people want power, some people want practical. Lumia Home, Lumia Pro, Lumia Ultimate, easy to pick from. And you need less people to make them.

 

[homeskooldalien]

They did that, actually:
https://en.wikipedia.org/wiki/List_of_Xbox_360_retail_configurations

With the Xbox 360 there was never any difference performance wise. The different models has cosmetic changes and different storage amounts. I will say that there was a hardware change in the Xbox 360 S that made the CPU/GPU run more efficiently (aka cooler) but the hardware was identical as far as functionality and performance in game. If a console company made different performing models (aka low-end, Mid-Range, and High-End) you would see A LOT of developers stop producing games for that console due to having to code for 3 different hardware configurations instead of just one. Can you imagine there being an Xbox (doesn't matter what generation) that would run a game at half the frame-rate or half the quality graphics as other models. People wouldn't buy those models period, at least I wouldn't. Just my 2 cents.

 

[Silverking]

Hmmm.. Basic math fail? If half of 18,000 is 9,000 then only laying off 7,800 from the phone division is saving 1,200 jobs originally getting axed.

 

[hannibal]

Yep. 3-5 models is enough! Maybe even 7...
- High end small and big
- Middle range small and big
- Low end small and big
- One huge phablet with high end specks

 

[ohim]

That moment when a company cuts jobs to save money and at the same time give CEO`s wages that could cover all those people`s wages ..

 

[wemakeourfuture]

MSFT has never had real great success making phones overall. This is their 3rd decade in mobile and they're a gigantic flop. It would never work, even if they concentrate on a single phone it will flop. Their tablets flopped. Their music player flopped. You guys may brag about their Xbox but over the course of Xbox entire lifespan its barely been a worth while business venture compared to Sony who have made billions of Playstation. Not to say Sony is a great company but just putting Xbox in its place.

Overall MSFT has almost made 85-90% of its profit from basically two products, Windows and Office and everything else has been a flop or non-game changer.

They can't do hardware, they can't do mobile, they cannot compete with Apple even with a single phone.

 

[falchard]

I think there is some wisdom in this. Microsoft has answered 2 of its biggest issues in smart phones. 1) Less saturated market place - Corrected to a degree in Windows 10 by allowing easier porting of Android and iOS applications. 2) Alienating hardware vendors by being a competing vendor.

 

[Reaver192]

This is brilliant on Microsofts part and they are probably going to start actually building phones with nice hardware. The key for them will be to bring some first to market hardware advances like Apple does. If you have something thats cool that no one else has it will make others want it. However I will say Microsofts marketing division is horrible in my eyes. They need a new image and the stupid commercials with idiots playing their Microsoft Surfaces the way homeless people play drums on buckets in the street while dancing isn't gonna cut it. They need something slick and interesting. Something that people see and say, WOW that is really cool and thats the only one that can do that. Hopefully they have something big up their sleeves for Windows10 with integration, Like Remote Desktop from my phone would be phenomenal. Let me use the processing power of my home pc(just like using a enterprise cloud based application) straight from my device. I wanna pick up on my phone where I left off and my pc and have it work great. Give me a Note4 sized device and an s-pen to do it and Im sold. Ill thrown my S6 in the trash and switch on the spot if it works well.

 

[sicom]

Sounds like they're slimming down for the sake of a more focused portfolio. The large number of Lumia phones and their naming schemes is a bad joke. Especially how most cellular providers end up with their own versions of international phones (520 -> 521, 935 -> Icon, etc).

Microsoft should be leading by example like they've done with Surface.

 

[dusty13]

That is pretty much the most uninformed article I have read in a long time on here ...

If you re-read the letter you will notice that there is a clear statement of nadella to stay in the phone market, but will focus on three core customer groups:

- entry
- enterprise
- enthusiast

Over the last few months MS has gone positively insane with low-end phones to the point where there is no clear differentiation between the models anymore. It is so overwhelming that people simply give up trying to find the right device for them because they can not find a difference in the gazillion low-end devices microsoft has bombarded us with.

This needs to change and it does.

From what I see here, MS is repositioning to build reference designs for each cathegory like they do with the surface lineup. That too will allow other manufacturers to get a bigger share (or get back into the market at all). Currently MS is making it utterly unattractive for samsung, sony, etc to produce windows phone and their overwhelming market share drives those few who hold out like HTC out of the market.

With an entry level design, a mid-size (business) desing and a flagship, all of them in one or at most two versions, MS has a clear portfolio, delivers reference designs for other companies and at the same time leaves room for differentiation that can be used by said other companies to sell their own desings.

Of course such a shrunken lineup will not need as many employees and taking the lumia lineup aside I would be very surprised if the Asha line survives this year. Those will also account for a lot of the 7.800 jobs.

So at the end of the day this is a good thing from a market perspective - a shitty thing from a social one though, I hope MS actively helps those laid off to get another job.

 

[falchard]

Microsoft has some of the best marketing people on the planet. The problem is they are the Korean Microsoft Marketing team. Their commercials are simply awesome.
Also I agree on too many low end phones. When they released the Lumia 635, I thought wow what a great low cost product. Then a couple months later they released the 640 which is a better version of the 635 for the same money. Then they released the 640 XL and I wondered... why bother?
The phone I really want is a successor to the Lumia 1020. I simply am not impressed with any phone by any company since the Lumia 1020 was released.