Will Microsoft Stop Making Lumia Smartphones Soon?

So last Wednesday - July 8, 2015 - Microsoft Corporation announced that they will be slashing up to 7,800 jobs globally as part of its efforts to streamline its mobile devices business, which it fully acquired from Nokia just last year.

Some tech sites and blogs immediately assumed that this move shows that Microsoft has pretty much given up all hopes of ever being able to compete with Apple and Google in the handset game. BGR even posted an article about it entitled "Microsoft Waves the White Flag in Battle with iPhone and Android", which I - along with many of their readers - think is hardly fair to the Redmond Giant.

Microsoft Lumia

Here in the Philippines, as soon as the memo started to spread online, I received lots of questions from you guys as well as from a few geeky friends on Facebook about what exactly Microsoft's mass layoff means and what the future holds for Lumia handsets. Allow me to answer some of those questions here by quoting statements from Microsoft itself.

Will Microsoft still make and sell Lumia smartphones? Yes -- but there's a catch. According to Microsoft CEO Satya Nadella, "I am committed to our first-party devices including phones. 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. [...] In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

Simply put, Microsoft will just be churning out fewer Lumia smartphone models running Windows Mobile operating system from here on out. As result, the future prospects for the company Phone Hardware segment are now below original expectations.

Microsoft Lumia

Is this move good for Microsoft -- and for us as mobile consumers? Well, it depends on how you see it. I think by making fewer devices, Microsoft will be able to give 'more' to individual products, kind of like how the first iPhone - as the singular handset in the company's portfolio - represented the best of what Apple had to offer in that category. "Less is more" as the old adage goes.

Following these changes, how many Lumia models does Microsoft intend to release every year? No official word yet regarding that. But Mr. Nadella said that Microsoft 'will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. 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. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.'

Based on that statement, I'm guessing that the Redmond Giant will launch at least three handsets per year; One for corporate customers, one for budget-conscious Windows Mobile fans, and a high-end, flagship-level model that will have the best features that Microsoft can possibly give a smartphone that year.

I'm not a doom-and-gloom kinda guy so I'm really hoping that these changes would allow Microsoft to be a better competitor in the mobile devices game -- just to make the category more fun and interesting for all consumers.

That said, let me wrap up this post by sharing this line, which reflects Microsoft's vision for the coming years: "In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones."