With the new CEO, Microsoft is going through a major transformation, the new goal that Satya Nadella has put out for the company, hope that changes would bring the company up, and it’s working. USA Today reports Microsoft shares has gone up 25% under the new CEO. Now, we know that beside Lumia, Nokia still have Asha, Series 40 and Nokia X, as well as services like Here Maps (and the whole navigation suite) and Mix Radio. Well, as a part of the transformation, some of these products will have a major change, beside the 18,000 lays off.
The Verge today reports on a memo that they obtained, and explains how Microsoft is shifting its focus on the Windows Phone OS for the better. In the memo, it shows that in order to do that, unimportant series like Asha, Series 40 and Nokia X development be switching to “maintenance mode,” in other words, switching off. So what is the plan here? Microsoft will try to keep the customers that are using these device happy, but over the nest 18 months, these lines of product will be killed off, and shift everyone focus to Windows phone.
Also, MixRadio (AkA Nokia MixRadio) might not have a spot in Microsft, especially with them trying to grow on the Xbox Music app. Reportedly, Microsoft is planning to sell this service to a third-party. For now, this service is in “maintenance mode” along with non-Lumia products mentioned above. However, there is supposedly some “strong interest” from potential buyers of this product.
Furthermore, Jo Harlow implies in the memo that the company will adjust its “…..flagship engineering efforts towards new flagship products timed with the next release of Windows and Windows Phone,” referring to the Spring 2015 ‘Threshold‘ update. In the meantime, the company is focusing on the Lumia 930, Lumia 1520 “and other high-end products that we will be announcing very soon.”
Also, while we are talking about ending, Microsoft will cut 18,000 jobs in the next year or so, announced by Mr. Nadella, he says in his memo:
We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months. It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible. We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.”
With this cut, Microsoft is expected to cut the “$750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges.”
But what does this means for the next Lumia devices? Stephen Elop addresses that in his email about the 18,000 employee cuts, and how would that affect his mobile division, stating the company will be “particularly focused on making the market for Windows Phone,” which is at the budget price market. He also explains the role of mobile devices in Microsoft, and the different way the new company will execute devices from Nokia, as well as other non-Lumia series:
Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft’s digital work and digital life experiences, while accruing value to Microsoft’s overall strategy. Our device strategy must reflect Microsoft’s strategy and must be accomplished within an appropriate financial envelope.”
“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.”
So the Mobile business and Smart devices will become one. He also added that “While we plan to reduce the engineering in Beijing and San Diego, both sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego. Espoo and Lund are planned to continue to be focused on application software development. We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.”
Back to the topics, even though Mix Radio is quite impressive with its work in just a short time, the merger with Xbox Music is near to impossible due to the Architech base of these two services. Also, the merge would send a Mix (pun-intended) signal to customers who already on the service or the Xbox music service.
In regard to the Lumias, although 930, Icon, 1020 and 1520 are quite elegant and impressive in their own perspective, consumers are favoring the “entry-level Lumia,” and Microsoft is desperate to turn that around, with new, high-end devices that will be coming “very soon”-according to the Verge.