Nadella: Microsoft "committed" to making phones

Satya Nadella insists Microsoft is still "committed" to making its own smartphones, the CEO arguing today's massive $7.6bn write-off is refocusing not abandonment. The company announced this morning it would cut 7,800 jobs, predominantly from its phone business, as well as write-off what it spent on acquiring Nokia. "I don't take changes in plans like these lightly," Nadella wrote in an email to all employees, "given that they affect the lives of people who have made an impact at Microsoft."

Unsurprisingly, the sweeping cuts are being seen as an admission that Microsoft has got it badly wrong in the years since it took on Nokia's phone business. Coupled with Nadella's comments in that announcement that a more "focused phone portfolio" was in order, a complete abandonment of the segment was predicted by some.

Not so, the CEO says in his email, though anybody hoping for a sudden resurrgence of Windows on phones will probably have to wait some time.

"I am committed to our first-party devices including phones," Nadella writes. "However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family."

That ecosystem involves universal apps that run across Windows PCs, notebooks, tablets, and phones, as well as more unusual hardware like the HoloLens augmented reality headset.

"We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software," Nadella says.

That apparently means targeting business customers wanting more from management, security, and productivity on the move, "value phone buyers", and "Windows fans the flagship devices they'll love."

Longer-term – whatever that actually translates to on the calendar – Nadella sees more devices in Microsoft's future, too, though that will presumably rest on the success or otherwise of Windows 10.

All in all, it's likely to provide little reassurance to Windows phone enthusiasts both inside and outside of the company, especially as the huge losses in talent today's layoffs and those last year take effect.

Nadella plans to hold a company-wide Q&A session about the changes on Thursday, where the chief exec is likely to face some angry and confused Microsoft staff.

SOURCE Microsoft