Microsoft’s Sensible Phone Strategy
The news is out: Microsoft is cutting 7,800 jobs and most of the damage will occur within their hardware [read: ex-Nokia] division. This, to me, is no real surprise. When Microsoft purchased the devices and hardware division from Nokia last year this was surely on the cards. Does it make perfect sense? Not really, no. But cold-hearted strategising within a multi-billion dollar global company is not something I am an expert in.
The facts matter though. It is disheartening to hear about nearly 8,000 fellow humans about to be made unemployed, and I’m not about to applaud any big company that puts people out of work. It must absolutely suck. So looking at this news from a merely consumer point of view isn’t all that easy. So I’m going to try and look at this as objectively as I can.
Firstly, there’s really no need for the panic sandstorm that is engulfing Twitter and other outlets today; people are saying this is the end of Lumia, or that Lumia has 12 months to live and then it’s dead. The news about the job cuts today isn’t completely unexpected; we all knew it was coming at some point, and the “tough choices” email from Microsoft CEO Satya Nadella did seem to hint at job cuts. 7,800 job cuts in the Windows 10 team would be news, but of course, the ‘downsizing’ is taking place in the department that is making the least positive impact on profits, and anyone with any business sense at all can agree that if cuts need to be made, then that is where they need to happen. It’s unfortunate that the department in question is the one closest to my heart: the phone hardware division. But let’s take another step back and look at this picture as whole.
If Microsoft are about to embark on their biggest, most ambitious project to date with Windows 10, it makes sense to me for them to focus in on this with laser-accuracy. If that means taking more of a conservative stance on how many products (hardware products) they put out there to maintain this new, immense push for software and services, so be it.
Let’s look at how the Other Guys do it. Take Motorola for example. How many devices does the once Google-owned, now Lenovo-owned phone manufacturer actually release each year? Not very many at all. But they sell well, and they receive very favourable reviews from the tech world. The Moto, E, G, and X are three excellent devices, each one aimed at a different segment of the market. Apple have a slightly different method of putting out one or two high-end phones each year. They don’t make low-end phones but why should they? The market is flooded with them anyway, and maintaining the top-end maintains their perceived appearance as the luxury brand, and they are enjoying huge success with this strategy.
Samsung may have recently done themselves a disservice by churning out the same flagship device each year, albeit with minor iterations in spec, but they are still very popular in those carrier stores, and Samsung Galaxy S4/5/6es in New York anyway are everywhere.
Then there’s Microsoft. I can’t even keep up with the tidal wave of low-end phones out there now. I can’t even, with full confidence, differentiate between all of them. From the Lumia 435 to the 535 to the 635, from the 520 to the 525 to the 540, from the 720 to the 735 to the 740… all of these phones are fine, capable devices. But they represent a confusing phone strategy, and without a modern, up-to-date flagship (yes, yes, I know, it’s coming!) it all seems a little, well, baffling.
“Microsoft still plans to make Lumia phones and is pushing ahead with Windows 10 Mobile, its operating system for Windows Phones and small tablets, expected to hit later this year. Microsoft still plans to launch Lumia flagship devices this calendar year. (The rumor is this fall, once Windows 10 Mobile is available.) Going forward, Microsoft will “in the near term … run a more effective and focused phone portfolio,” said CEO Satya Nadella in an e-mail to employees. Microsoft will focus its phone efforts on three segments: Businesses, value-phone buyers and flagship phone customers, moving forward. I’m not sure if Microsoft will continue making its own phones or outsource its manufacturing completely, while still branding its phones as “Microsoft”-made.” – Mary Jo Foley
Seems sensible to me. I am certain that I will be sticking with Windows as it transitions from “Phone” to “10 Mobile”. I honestly really enjoy using my Lumia 930 and 1020 still, and I find the interface easy, slick, gorgeous and very useful. It still seems fresh to me, even though aesthetically it hasn’t changed very much since I bought my first Lumia Windows Phone. And why should I remain a Lumia user? What’s stopping me from marching into an AT&T store right now and buying an iPhone 6 or a Samsung S6? Nothing. Nothing at all. But here’s the thing: I choose Windows Phone. I continually make the choice to use it over other devices. And because I believe that there are things on my Lumia that make it unique, I choose to remain a Windows Phone user. Nobody is paying me or forcing me to use a Lumia. Of course my heart is always going to be with old Nokia and therefore the new Lumias, but the choice is out there for me to take, and I choose this OS over others. And with Windows 10, things will surely only get better and more exciting and maybe even more advantageous.
But back to today – why are people panicking? Because these days it always seems as if the Lumia line is in the cross-hairs. Whether it’s chatter about Microsoft ditching Windows Phone and going all in with Android, or ditching the whole shebang altogether… it’s easy to write an emotionally-charged blog post or tweet (“Lumia: The End Is Nigh!”) but it gets a little tedious after a while. Sensible voices like Mary Jo’s are few and far between, but they are the ones we should be listening to.
Look, I know it stinks. People are losing their jobs. There’s nothing cool about that. But from a different standpoint, this new, leaner strategy does seem to make more sense. A company with their focus on an enormously important new product, Windows 10, cannot just keep shoveling coal onto a fire nobody wants. What they need to do is utilise the resources they have (and by that I mean remaining talent) and design three or four exquisite phones for launch each year. A charming low-end phone like a Lumia 535, a high-end, gorgeous flagship like a Lumia 930, and a business-centric model like a Nokia E7. Ok!! I jest, I jest! No, but perhaps by “business” they mean a device that has all the whistles and bells that corporate-types might actually use; perhaps the necessary chips and ports for Continuum to work at its best, or HDMI compatibility, or ports for easy insertion into some kind of dock – the stuff the average user would probably never even think of using but would be incredibly useful for businesspeople on-the-go.
And that’s it. Keeping things slimmed-down but at the same time awesome, and not spreading the wealth over too many devices that don’t sell well. And more importantly, freeing up some of the market for our OEM friends to step in and produce a few Windows 10 Mobiles of their own. I mean, you can’t really blame the likes of LG, Samsung, and HTC for releasing very few Windows Phones over the years, because why would they? Nokia had, and now Microsoft have the market all tied up right now. But if Microsoft stepped back a bit and gave them some room, we might see many more devices running Windows 10 Mobile from these (and other) manufacturers. Thinking about it, one could even see how Microsoft might, in the future, scale back production even further to just one flagship device per year, if many other manufactures end up churning out a plethora of devices. If they are keeping the Windows 10 engine chugging along sweetly, with updates and patches coming in all of the time, it’s quite easy to see how they may produce one great Lumia and one great Surface per year, while the shelves are full of Windows 10 devices made by others.
In my view, the sky is still up there, and while nobody wants to hear about folk being made to look elsewhere for work, the long-term view seems much more sensible to me. There’s no need to panic, kids.