Microsoft gave up the fight, leaving iOS and Android in the battlefield. Microsoft phones couldn’t beat the booming smartphone market and hence declared officially dead. Recently, it announced a major revamp in its hardware department that will include cutting off phone division jobs. As per the news, Satya Nadella, Microsoft CEO, confirmed that 7,800 employees have been laid off, mostly from the phone division. The company is trying to narrow down its focus to 3 diverse market segments instead of appealing to the broader market.

From the letter written by Microsoft CEO to the employees, it has been revealed that they are focusing on providing best management, productivity and security that business customers look for, offer communication services to the phone buyers and the flagship devices that the Windows fans will love. Whatever the message you draw from this letter, the concluding ideas is – Microsoft is not going to compete with Android and iPhone anymore.

Peeping into the details

With regards to business consumers who value productivity and safety, it somewhere gives a feeling that Microsoft will most likely compete for niche areas of interest concerning users that BlackBerry continues to hold onto, which is not specifically a large marketplace. Die hard fans for Windows phone will certainly adore the concept of latest flagship hardware, regardless of the fact that they simply are not enough to boost Home Windows Telephone in the marketplace percentage. And in the perspective of phone patrons, companies like Micromax and Xiaomi has been complacently ruling that marketplace with their dirt cheap Android phones.

Taking all these into consideration, Microsoft, truly, is not interested to compete with Apple or Android from now onward. As an alternative, it is making an effort so that it can add extra to the Windows ecosystem for mobile users, that will not essentially comprise of phones.

Future of Microsoft’s phone business

Nadella, the CEO of Microsoft, explained that he is committed to their first party devices comprising phones. However, they are required to pay more attention to their phone efforts in the near future whilst driving re-invention. They are shifting from a strategy to prosper with a standalone phone business to a strategy by which they can prosper and develop a vibrant Windows ecosystem that comprise of their first party device segment.

In the upcoming days, Microsoft will run a more efficient phone portfolio, with superior products and speed, given the newly developed Windows and Device group by professional developers. The company plans to narrow their focus to 3 customer segments where they can differentiate via the combination of their software and hardware as well as make unique contributions. They aspire to bring better management for their customers and flagship devices that their patrons will love.

After reading this corporate notice, it can be assumed that the company will primarily focus on particular niche markets, like business customers, and will be working with fewer manpower.

In the end, this can be figured out that Microsoft will not develop anything in the phone segment for general users any more. This follows a routine that the last few years have witnessed that Microsoft pro-actively creating apps and services to compete with its rivals. Microsoft has a very small market share in the category of products and has been dominated by Android and iOS for ages.

Nadella also declared a write-down of $7.6 billions, which is essentially altering the value of an asset that has been declared. So, this also means that the acquisition of Nokia was basically not of much use.

So, things didn’t work out for Microsoft quite well, but it gives a more realistic reflection of why and how people do not really prefer Windows Phone.