Earlier today, Microsoft announced a major restructuring of its mobile hardware business, which will include the loss of around 7,800 jobs, mostly from its phone division. The company also took a write-down of $7.6 billion, an "impairment charge" related to its $7.2 billion acquisition of Nokia"s devices and services business last year.
But despite the gloom surrounding this announcement, Microsoft says it remains committed to its phone business - both by supporting its hardware partners with their third-party Windows 10 Mobile handsets, and by continuing to offer its own mobile hardware.
Microsoft CEO Satya Nadella said earlier today that the company will now focus on delivering phones to three key market segments: value-focused devices, business handsets, and Windows flagships. Bloomberg has now got a little more information on Microsoft"s plans for its new more "focused" product portfolio, via an unnamed "person familiar with the plans".
The source revealed that Microsoft now plans to launch just one or two models per year in each of these three market segments, indicating that the company intends to dramatically reduce the number of devices in its range.
Microsoft has launched seven new Windows Phones in the last eight months, and all of them - Lumias 430 Dual SIM, 435, 532, 535, 540, 640 and 640 XL - have been aimed at the lower end of the market. The company has attracted widespread criticism for rolling out so many devices at this end of the market, especially given that many of them differ only very slightly in price and specifications.
Significantly, the source also said that Microsoft plans to exit markets where sales of its Windows Phones have been especially weak, but exactly which markets face the chop isn"t yet clear. The person added that the company will also end carrier partnerships that aren"t working out.
Whether this also signals the end of exclusive carrier relationships - those that restrict the release of a device to one mobile operator in a particular market - remains to be seen. These exclusivity arrangements are often criticized by buyers for restricting availability of new handsets, and excluding those who may wish to purchase a device, but are unwilling or unable to switch carriers to do so.
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Source: Bloomberg