Today’s big Microsoft news is that the company is cutting 18,000 jobs this year – with around two-thirds of those jobs going at the Nokia mobile making division it bought for $7.2 billion back in April.
Redmond also today confirmed it would be transitioning some of the Android-based Nokia X devices over to its Windows Phone platform — suggesting the rest of the range is for the chop.
In a memo to staff Microsoft’s Stephen Elop said the company would continue to “sell and support” existing Nokia X devices, but evidently Microsoft has no plans to develop any new Android-based devices, and presumably will only be selling out the inventory it has. Or else producing only a very limited run of existing Nokia X Android devices (there are four of these: the recently launched X2, and the X, X+ and XL unveiled in February).
“In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices. We expect to make this shift immediately while continuing to sell and support existing Nokia X products,” wrote Elop.
However, as most of the world could tell you, Nokia made its mobile fortune making far more basic devices, and has continued to make and sell basic mobiles right through the modern smartphone era. But these basic Nokia phone are also now evidently for the chop, under Nokia’s new owner.
TechCrunch understands that Microsoft plans to ramp down production of Nokia devices running the legacy Series 40 platform — such as its Asha low-cost feature phones, and other more basic handsets. You know, the phones that look like this.
Bottom line: This really is the end of the line for the humble Nokia mobile phone — a device that connected millions of people around the world long before the iPhone landed on the scene to disrupt the mobile market. The first mobile phone I ever owned, way back in 1997, was a Nokia handset. Seventeen years on that entire category of Nokia-branded device is on the chopping block.
BGR India has obtained an internal email sent by Microsoft’s Jo Harlow to staff in the mobile phone division which uses Microsoft’s “clear focus” on Windows Phone as the justification for all mobile phones-related services being immediately moved into “maintenance mode”, and — over an 18 months period — shut down.
“This means there will be no new features or updates to services on any Mobile Phones platform as a result of these plans,” writes Harlow. “We plan to consider strategic options for Xpress Browser to enable continuation of the service outside of Microsoft. We are committed to supporting our existing customers, and will ensure proper operation during the controlled shutdown of services over the next 18 months. A detailed plan and timeline for each service will be communicated over the coming weeks.”
The email also notes that Microsoft will be transitioning developer efforts and investments in the mobile division to focus on the Windows ecosystem.
“We plan to immediately begin ramping down developer engagement activities related to Nokia X, Asha and Series 40 apps and shift support to maintenance mode. We are committed to supporting our existing Mobile Phones customers, and will ensure proper operation during the planned controlled shutdown of services over the next 18 months,” she adds.
For his part, covering off the “very lowest price ranges” with one line in his staff memo, Elop notes: “We plan to run our first phones business for maximum efficiency with a smaller team.”
‘Maximum efficiency’ is – ultimately — a euphemism for termination in this instance.
The looming exit of Nokia’s basic mobile devices from the market will inevitably reduce choice at the budget end of the market — which, coupled with smartphone price-tags continuing to be squeezed lower — pushes more consumers to buy a smartphone from the get go.
Microsoft is going to be hoping that over the next 18 months it can drive the price-tag of its Windows Phone-based smartphones low enough to hook those entry level “first phone” buyers — or else its decision to kill off the most basic of Nokia’s mobile devices might just drive more first-time phone buyers even faster into the arms of Android.