Just a couple of days ago, I wondered whether Microsoft would focus on the high-volume, low cost market with its products, or the lower-volume, higher cost one.
On the mobile phone front, it looks like we now have an answer: Both. But running the Windows Phone OS only.
As part of its layoffs of 18,000 people, announced on July 17, Microsoft is cutting 12,500 of those it acquired as part of its deal to buy Nokia's handset and services division. Among those employees are both professionals and those involved in manufacturing, as well as those who've been working on the Nokia X Android-based phones.
The Verge's Tom Warren reported that employees working on the Nokia Asha and S40 feature phones look to be among the layoff casualties, as well, as will those involved with Nokia's MixRadio offering, which may possibly be spun off as a third-party service. According to Warren, those cuts were detailed in a July 17 e-mail from phone chief Jo Harlow.
BGR India has excerpts said to be from the Harlow memo that indicate all "Mobile Phones" (non Windows Phone) services and "enablers" are moving into maintenance mode immediately. That means no new features or updates to Asha, S40 or Nokia X Android phones or app-development programs for those phones as they are phased out over the next 18 months.
The MixRadio decision isn't too surprising given Microsoft has a substantial investment in its own music service, Xbox Music. Update: A MixRadio spokesperson said MixRadio will be spun out as a separate company, but that the application will continue to be preloaded on Windows Phones and other Windows devices. "We are not closing down or ceasing to develop the service," the spokesperson said. "We are being spun out as a separate company, although we will continue to be preloaded to Microsoft devices."
The Asha and S40 phase-out may catch some by surprise, given Microsoft had been talking up those phones as a possible gateway to get to users in the developing world. Microsoft officials never said if or when they planned to put the Windows Phone operating system on those phones, or whether they planned to use them as a way to expose more users to Microsoft software and services.
Microsoft's new plan going forward with its phones is to focus on both the low and high end of the market with Windows Phones from both Microsoft itself and third-party phone OEMs.
"To align with Microsoft’s strategy, we plan to focus our efforts. Given the wide range of device experiences, we must concentrate on the areas where we can add the most value," said Microsoft Executive Vice President of Devices, Stephen Elop, in a July 17 e-mail to employees about the layoffs.
Hanoi, Vietnam is now the new center of Windows Phone production, according to a July 17 e-mail about today's layoffs from Microsoft Executive Vice President Stephen Elop. ("Some production" will continue in Beijing and Dongguan, Elop noted.)
On the engineering side, high-end phone work will be concentrated in Salo, Finland. Tampere, Finland will be the home for "more affordable devices." Engineering work in Oulu, Finland will be ramping down, Elop noted (and was expected earlier this week, following a Finnish daily's report claiming R&D jobs would be lost in Oulu.)
"While we plan to reduce the engineering in Beijing and San Diego, both sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego. Espoo and Lund are planned to continue to be focused on application software development," Elop added.
Microsoft also will shut down the Nokia plant in Komarom (in Northwest Hungary), which employs about 1,800 people, according to a Budapest news agency report. (Thanks to @vhunor for the information and translation.) Elop's mail confirms the start of a "phased exit" from Komarom. The Komarom plant previously incurred layoffs of thousands in 2012 before Microsoft acquired Nokia's handset business. Komarom is where the Nokia X phones allegedly were being manufactured.