Recently, Microsoft announced $7.6 billion write-off along with the sacking of 7800 employees mostly from the mobile phone unit. Nowadays, sacking is not an alarming signal for any tech company as it is considered as an exercise to cope with changing business environment through reshuffling of management and resources. But then, this is a second large sacking in the reign of Satya Nadella, who is trying to get control over a bumpy ride he is facing since taken the chair. Also, we cannot neglect the ‘write-off’ move. Writing off a whopping $7.6 billion may not be a big deal for the Redmond giant, but, analysts see it in a context of acquiring Nokia business, and link it with the backfire of Windows phones.
Microsoft faces hurdles in Windows phones since launching as it has to keep a balance between performance and price. Let’s check out the position of its rivals in mobile market to understand this: With more than 75 percent share, Android dominates the market, and the reason behind it is a low price for reasonably good performance. On the other hand, Cupertino giant Apple attracts niche customers with the stunning performance of both iPhones and iPads.
For companies like Microsoft, it is tough to come out from the traditional practices that it has implied in making Windows software for PCs and laptops. Today, the mobile platform is the most dynamic platform that deals with users’ ever-changing requirements. There, Microsoft gets failed in giving a strong option for both its competitors. Company’s desperation for acquiring a sizeable chunk in smart devices’ market is visible in two recent steps: Lumia phones with the latest Windows 10 OS, and the company is ready to embrace both Android and iOS apps.
Nokia acquisition- Redmond giant still pays the price
Acquisition of Nokia’s mobile hardware and device services was an ambitious move from Microsoft. Today, it seems that the Redmond Company still pays its price. Big write-off and sacking indicate the intention of closing the mobile business, but, at this point, it is early to conclude anything. However, company’s intentions are vague; we can assume that the company may opt for either of the following moves:
- Continue Lumia phone’s production at least for two years for observing its impact on mobile market
- After making core businesses more profitable, shift the focus on making smartphones
- May change the OS (most likely Android) for launching budget phones in Asian countries
- Completely halt the process of making smartphones (It is less likely though.)
- After covering the loss of mobile business unit, again re-enter the market from scratch
In a way, many doors are open. For a company like Microsoft, it is hard to believe that it can kill any business at the initial level. We can certainly hope for a comeback of the tech giant with a bang in the field of smart devices. But then, it may not come with Windows OS in them. Let us hope to hail its advanced phones again!