Microsoft: Windows Phone Not Dead, Still Evolving

The latest round of layoffs in Microsoft’s Windows Phone business—1,850 jobs will be cut, according to an announcement earlier this week—seems to signal the final death gasp of a segment of the company’s business that has long struggled. Windows phones currently make up less than one percent of smartphones sold worldwide.

Microsoft, however, continues to insist that it’s simply refining its mobile hardware strategy. In an email to partners obtained by Windows Central, the company reiterates that it’s now focusing on business customers. That’s one of three market niches Microsoft said last year it would prioritize.

The other two, value customers and diehard Windows Phone enthusiasts, seem to have been largely abandoned. The company recently sold its feature phone business to FoxConn for $350 million. And this week’s email indicates that Microsoft will be pulling back from selling phones in emerging markets like India and Brazil, where budget Windows Phones had found a following.

Microsoft hopes business customers will be drawn to its phones’ security features and the ability to use Continuum to connect to larger displays.

“We will continue to support and update the Lumia devices that are currently in the market, and the development of Windows 10 phones by OEMs, such as HP, Acer, Alcatel, VAIO, and Trinity; as well as develop great new devices,” Microsoft says in the email, according to Windows Central.

Pulling back on making new Lumias allows Microsoft to rely on its hardware partners to help move the Windows Mobile platform forward, while possibly focusing its own resources on a breakthrough device like the rumored Surface phone. In the end, as some have speculated, this might be the best strategy for a company that was never going to own the consumer phone space.

“While it’s obviously terrible for all the people who have been left jobless,” Klint Finley writes in a recent Wired post, “it turns out that at the height of the mobile era the smartest thing most tech companies can do is not make phones.”