Microsoft is going to wind down Nokia's Asha and Series 40 feature-phone businesses over the next 18 months to focus solely on devices running Microsoft's Windows Phone platform, according to an internal company memo. The decisions come as part of Microsoft's decision to cut 18,000 jobs, including 12,500 former Nokia workers, the largest restructuring in the company's history.
Microsoft appears likely to phase out the Nokia brand in its mobile products, especially smartphones, following its $7.5 billion deal for Nokia's devices and services business, according to newly leaked internal documents.
Microsoft decision pay around $7.2 billion for Nokia's devices and services unit and a license to its patents and mapping software is being cast by analysts as a bold but risky bet that could leave the two companies more isolated in mobile than they were before the deal.
Microsoft announced it will pay around $7.2 billion for Nokia's mobile phones business and a license to its patents and mapping software. Under the agreement, Microsoft will acquire around a third of Nokia's roughly 88,000 employees and much of its Lumia smartphone and Asha feature phone business.
Nokia's head of developer relations, Marco Argenti, said he is leaving the company after five years and taking a position with Amazon's web services team, dealing a blow to Nokia as it continues to try to gain traction with Microsoft's Windows Phone and its own Asha platform.
Nokia's $2.21 billion purchase of Siemens' 50 percent stake in their Nokia Siemens Networks joint venture is less than analysts had reportedly been expecting, leading many to conclude that Nokia got the share for a bargain. The questions multiply from there: Will owning the networks business inject enough strength into Nokia's balance sheet, and what will the long-term future of the business be?
Amid all the scrutiny on its high-end Lumia Windows Phone smartphones, Nokia is apparently providing a master lesson in how to make a profit from a basic mobile phone that costs only €15 ($20).
Microsoft and Nokia held talks as recently as this month on a sale of Nokia's mobile devices business to Microsoft, but the talks broke down and are not likely to be revived, according to a report in the Wall Street Journal.
Symbian was once the biggest mobile operating system in the world, but Nokia appears set to stop new shipments of devices based on the Symbian OS this summer as sales taper off.
Nokia cannot afford to lose its nerve now despite calls for a Plan B from some irate shareholders. It needs to keep its focus and not undermine its best efforts.