Or at least the Surface Phone is where Microsoft appears to be heading.
Two days ago, Microsoft has announced that they are selling their feature phone business for $350mil to Foxconn. “Feature phone” is also known as “dumb phone” for those not familiar to this language. Foxconn is the same company who assembles hardware for Apple and many others. This news by itself is not a biggie since their feature phone business was never in their long term strategy (it was inherited as part of Nokia deal) but they also made the following announcement:
Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.
This sure sounds like they are not interested in producing any new Lumia hardware in the future. If you recall, Microsoft wrote off most of its Nokia deal about a year ago, for around $7.6bil! It is safe to say that Microsoft’s venture into smartphone business is a total disaster so far. Bill Gates never liked the Nokia deal but Steve Ballmer was a strong proponent of this idea. We now all know who was right. 🙂 Sale of the feature phone business is part of the effort to lessen the impact of the smartphone strategy failure.
Microsoft Device chief has also mentioned that Microsoft is still committed to Windows Mobile 10 and currently developing the next generation product, which I can only assume, is the Surface Phone. The new phone team (or what’s left of it) has been merged into the Surface team and unlike the phone group, this group has been rather successful in producing products that sell and created a good brand recognition. Hopefully, this will all be a positive move for their smartphone business.
I personally would like to see three companies competing in the smartphone segment rather than two, and this is coming from an Android phone user.