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Microsoft takes a heavy blow but it’s still in the smartphone fight

With news that Microsoft is slashing another 7,800 jobs, many critics are predicting the death of Lumia phones in the very near future. But fear not, Windows fans – Microsoft isn’t out of the smartphone game just yet.

A sobering release on Microsoft’s News Center from CEO Satya Nadella revealed yesterday that another 7,800 people will lose their jobs, as the company restructures and refocuses its investments. This restructuring is set to impact Microsoft’s phones business most of all, but Nadella was quick to point out in his release that ‘I am committed to our first-party devices including phones’.

A pessimist will probably take a quick look at Microsoft’s situation and relatively minor share of the global smartphone market, including poor performance in China where less than one percent of mobiles sold are Windows Phone handsets. The logical conclusion is that Windows Phone is dead and Microsoft will ditch phones entirely, concentrating on its software solutions instead.

And to be fair, that’s not an entirely empty verdict. After all, Microsoft really has been pushing its cloud service OneDrive as well as its software suites, with the likes of Office now available on Android and iOS devices.

But Lumia phones are still shifting strong numbers in many developing markets and recently enjoyed a rise in market share in America compared with 2014, to 3.8 percent. In the likes of France and Italy, this share jumps to 11.6 and 12.7 percent.

Microsoft’s apps store has plenty of critics too – us included – but after spending many years attracting developers and growing the online catalogue, a total abandonment now seems ludicrous.

And then there’s Microsoft’s big new strategy, Windows 10, which aims to provide a seamless experience between all of your devices. Microsoft is unikely to turn its back on the smartphone market when most of our time is spent on mobile devices, rather than laptops or desktop computers. Take away the mobile part and suddenly Windows 10 loses its spark.

Nadella seems to agree, as he reinforces the company’s ‘strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family’.

So, what does this latest news really mean for Microsoft? Well, we’re expecting a reduction of the number of Lumia handsets released as Microsoft adopts a more focused approach, with just a handful of new mobile devices emerging this year. Here in the UK, we’d be surprised to see more than one new flagship (the Lumia 940XL?), one or two mid-range handsets and a budget blower or two before the end of 2015.

This is a good thing in our book, as a non-stop bombardment of Lumia handsets might simply result in confusion for the general consumer. After all, many recent handsets have very similar specs and features. We’d much rather see quality over quantity, and hopefully a new hardware strategy combined with the Windows 10 ecosystem will prove a lot more enticing.

What do you think of the latest Microsoft news? Let us know in the comments below.


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