
Microsoft to Cut Jobs, Take $7.6B Nokia Writedown - ddeck
http://www.bloomberg.com/news/articles/2015-07-08/microsoft-to-cut-7-800-jobs-as-it-restructures-phone-business
======
newsreader
I own a Lumia 925, my wife owns a Lumia 640, and we use a Lumia 520 as our
home line. I realize that Windows has a small share of the mobile phone market
in the US but everybody that I've ever met that owns a Windows phone is pretty
happy with their purchase -- I am. Apple phones are too expensive for my
budget, and I tried helping a family member with his Android device and
quickly realized I had made the right decision buying a Windows phone. I'm
looking forward to see how the new OS (Windows 10) works on my devices.

~~~
bostonpete
Our of curiosity, what got you buying MS phones? My sense was that by the time
they had a decent phone available, most people were too invested in Android or
iOS to readily consider a change. Were you a late adopter of smart phones or
did you make the switch at some point?

~~~
berns
Free offline maps and navigation for anywhere in the world.

~~~
thaumasiotes
I use osmand for free offline maps and navigation anywhere in the world.
Should I be doing something different? How does this make Windows Phone
special?

~~~
berns
I was answering the question of what made me choose a Microsoft phone. Offline
maps has always been a strong differentiator of Nokia, now the owner of
Navteq. I can't comment on the quality and extension of Open Street Maps. I
gather that you are a satisfied user of osmand, so I recommend that you don't
do anything different.

~~~
thaumasiotes
Eh, I'm satisfied as to use in the US. The quality of the mapping they have
for China is pretty bad... but I kind of figured it wouldn't be great from any
other (english-language) provider either. Google Maps is better in some ways,
but hard to access and still terrible at things like street addresses.

------
tdicola
"Microsoft will record an impairment charge of about $7.6 billion on its Nokia
handset unit"

Wow, well there it is--looks like the rumor is true. So the Nokia deal was
basically a complete flop?

~~~
exelius
This is actually amazing. Between Nokia and aQuantive, Microsoft dumped over
$14 billion into two failed acquisitions. I can't recall another company over
the last decade that has had a total write-off of that scale (well, maybe the
HP-Autonomy thing, but there was likely some fraud involved there).

I have absolutely no idea why they purchased Nokia in the first place -- it
was obvious that they were never going to seriously challenge Apple or Google,
and Nokia was another obviously sinking ship. It was like if Circuit City had
purchased Radio Shack. I have no idea why the board let Ballmer blow billions
on an acquisition they knew he wouldn't be around to see through and that
didn't fit with the strategic direction of the company 6 months later.

If I were an institutional investor, I would demand a change in board
leadership. This kind of stuff is just unacceptable for a public company. I
know hindsight is 20/20, but blowing $14 billion on acquisitions that were
doomed to begin with is simply inexcusable. You can blame Ballmer for being a
terrible CEO, but the blame really rests on the board for allowing him to make
really big, really bad decisions.

~~~
throwawaykf05
1\. Nokia was pretty much the only real manufacturer of Windows Phone. Did
they really have a choice? Microsoft does not seem to be the type to give up
on their bets easily, and it sometimes pays off. For instance, as I recall,
that's where they started with Xbox and Bing, and both products are doing well
now.

2\. Even though their relative market share is low, keep in mind the market is
huge and so in absolute numbers, they are selling quite a few Lumias. Millions
of devices every quarter is a pretty decent number, and something that could
be leveraged in various ways. Not a direct comparison, but note that until
2007 Apple ran their entire business on products that had minority market
share.

3\. Not very familiar with the aQuantive deal - how was it doomed to begin
with?

~~~
Someone1234
Little bit of a tangent here: Is Bing doing well? We all agree that XBox is a
huge success, but given that Bing just gave away its display advertising to
AOL all to gain trivial market share, and is still paying users $5/month to
use Bing, you have to wonder if Bing is really successful or just held up.

I actually don't "hate" Bing. I find their answers to questions directly in
results slightly better than Google's version of the same. But I still use
Google as they have more historical search data to utilise so results remain
more accurate (and will almost indefinitely). Bing also seems to choke on
technical queries and special characters more often.

~~~
0xFFC
No one is going to beat google , until they manage to put their own search
engine on peoples home page and replace Google.Until that day comes ,
Everybody know google is almost unbeatable ( does not matter how much you push
, google will not defeat , because their income resource is somewhere else
).Microsoft realized that very soon , that because they created their own
search engine.and abandoning Bing is almost will end up Microsoft's
death.Every body know google wants everything , And they will come after
Windows(Microsoft last line defense) with their ChromeOS or specialized
version of Android(which will be cloud based).

~~~
magicalist
> _No one is going to beat google , until they manage to put their own search
> engine on peoples home page and replace Google_

IE is still very popular and defaults to Bing. Firefox is very popular and now
defaults to Yahoo or Yandex or Baidu depending on the country you're in...

> _does not matter how much you push , google will not defeat, because their
> income resource is somewhere else_

The majority of their revenue is advertising, and the majority of the
advertising revenue comes from search ads, so search is exactly where their
revenue is coming from.

> _and abandoning Bing is almost will end up Microsoft 's death_

huh? I don't see how that could possibly be true.

~~~
0xFFC
>IE is still very popular and defaults to Bing. Firefox is very popular and
now defaults to Yahoo or Yandex or Baidu depending on the country you're in...

That's not true . (maybe IE is more popular in some corner of the world , or
among some users but) We all know in search engine market share , google is
ruler and leader, without even a serious competitor. (recently _maybe_ bing
become a little more viable). Does not matter you (as company) put yahoo or
anything else in your browser default homepage , most people will use/switch
to google. Need for search engine will be increase with Internet and
population growth.And I think this will end up with Google's exponential
growth in compare with Apple or Microsoft linear growth.

> The majority of their revenue is advertising, and the majority of the
> advertising revenue comes from search ads, so search is exactly where their
> revenue is coming from.

Yes , exactly , because of that they don't care if they create some "free" OS
better than Windows. Like what they did with Android. They just want better IT
industry , better OS , better PC. Because with increasing IT users , their
revenue will increase.

>huh? I don't see how that could possibly be true.

I see this problem in reverse order , with Microsoft giving up on bing, Google
will end up without any serious threat to its income and core market share.
And recent years already proved my , Google wants everything , after a while
their ChromeOS will be viable replacement for Windows.They will push gaming on
Android. and etc etc etc , and after years mayble Microsoft will end up where
Companies like Novel are today .

But these are my view , I could be wrong.

------
JonoW
"Microsoft will focus its phone efforts on three segments: Businesses, value-
phone buyers and flagship phone customers, moving forward."

Doesn't that pretty much cover all potential customers?

~~~
draugadrotten
>* Doesn't that pretty much cover all potential customers?*

That may make more sense in comparison with the 2014 strategy, which didn't
include all potential customers and specifically avoided the high end and
business markets in order to focus on the value-phone buyers in "emerging
markets" so as to "connect the next billion people".

[2014 -
[http://www.bloomberg.com/news/articles/2014-02-23/microsoft-...](http://www.bloomberg.com/news/articles/2014-02-23/microsoft-
targets-cheaper-phones-to-tap-global-internet-growth) ]

Focusing on business and flagship phone customers is a change in strategy
which puts Microsoft into direct competition with Apple and Samsung.

Good luck with _that_ , now.

~~~
jonlucc
And HTC, which, despite making _very good_ flagship-competitive phones, is
losing money.

~~~
emodendroket
Have they really come up with such a great one after the M8? The M9 seems to
be pretty weak.

~~~
jonlucc
That's my point, though. It's very hard to compete year after year in the
flagship space. One company that is doing arguably the second best job of
making flagship Android phones is HTC, and even they can't make money at it.
If the 2nd place flagship maker of the top platform can't make money, how will
even the first tier flagship maker of the distant 3rd platform have any room
for profit?

~~~
emodendroket
Well, OK. But I think that they're not really making a top tier flagship
anymore, compared to other more recent competitors. And it looks like maybe
they don't want to stay in this business. Still, your point is taken.

------
petilon
Nokia remains a separate company and the Microsoft agreement allows Nokia to
get back into phones next year, and they intend to do so. (See link below.)
The best phone engineers being laid off today will probably be rehired by
Nokia. The Microsoft deal turned to be heavily in favor of Nokia. They got 7+
billion dollars, and will continue to make and sell phones, except they will
now be Android phones. Essentially Nokia got $7 Billion for staying out of the
phone market for a couple of years.

Nokia to make phones again in 2016:
[http://www.reuters.com/article/2015/06/18/us-nokia-phones-
id...](http://www.reuters.com/article/2015/06/18/us-nokia-phones-
idUSKBN0OY21320150618)

~~~
keithpeter
Nokia S30/S40 cheap end candybar phones. Who will continue to make those?
Nokia 225 and Nokia 108 quite common round here recently. Low income
neighbourhood, UK.

------
RoboSeldon
I hope that Microsoft will someday buy Xamarin and give it with Visual Studio
Community Edition. This way anyone will be able to publish for Windows Phone,
Android and iOS from Visual Studio.

Personally I like my Lumia phone with Windows 8.1 and I look forward to check
how Windows 10 will run on this device.

~~~
Torn
MS should push Visual Studio Code, as that's properly multi-platform, and
forget Xamarin. Now that the .NET CoreCLR is open source.

Monodevelop is an awful piece of software.

~~~
tluyben2
You do not need to use Monodevelop, even on Windows or Mac to write Xamarin
apps. Monodevelop is just the most obvious as it's packaged. And agreed,
Monodevelop is not very good.

~~~
tomjen3
What do you suggest, on a non-windows platform, then?

~~~
RoboSeldon
Xamarin Studio is better than MonoDevelop and (at least this is what they
claim) free to use for Desktop (Window and Mac) applications
[http://www.monodevelop.com/download/](http://www.monodevelop.com/download/) :

 _For Mac and Windows, you can download Xamarin Studio which is a bundle of
MonoDevelop along with Xamarin iOS /Android plugins and branding. Note that a
Xamarin license is only required if you develop iOS/Android projects, all
other project types are free without restrictions._

------
ddeck
Press release:

[https://news.microsoft.com/2015/07/08/microsoft-announces-
re...](https://news.microsoft.com/2015/07/08/microsoft-announces-
restructuring-of-phone-hardware-business/)

CEO Email:

[https://news.microsoft.com/2015/07/08/satya-nadella-email-
to...](https://news.microsoft.com/2015/07/08/satya-nadella-email-to-employees-
on-sharpening-business-focus/)

------
IanDrake
They really need to reduce the number of phones they produce. There are so
many damn phones models and the numbers / names make no sense.

What they need is a surface phone. One phone, three variants.

Surface Phone - Low-Mid Range

Surface Pro Phone - High end w/continuum

Surface Pro+ Phone - High end Phablet w/continuum

That would match their naming for the tablet and cause little confusion about
what they are in the minds of consumers.

~~~
AdmiralAsshat
Considering there was already so much confusion about the ARM-based Surface vs
the x86-based Surface Pro line, I don't think they want to introduce
additional confusion by also having the "Surface" name now apply to phones and
restart that headache.

~~~
Retra
I have never met someone who cared what processor was in their phone to the
point where it should influence branding whatsoever.

~~~
chadzawistowski
Perhaps average consumers don't care about processor architecture, but they do
care about what programs will run. Surface RT was "that tablet that kinda has
a desktop but can only run Office" versus "that tablet that can run any
Windows program from 1995 onwards".

------
AdmiralAsshat
Something not mentioned in this article but in another[0]:

Microsoft added around 25,000 jobs when it bought the mobile department from
Nokia. The 8,000 jobs they cut today are on top of the 18,000 they cut last
July. Since both were focused "primarily" on the Nokia acquisitions, by my
count nearly everyone from that is gone now.

[0]:[http://www.cnet.com/news/microsoft-reportedly-plans-
another-...](http://www.cnet.com/news/microsoft-reportedly-plans-another-
major-round-of-job-cuts/)

------
camhenlin
I tried out a Lumia 925 on my last contract. It was a decent phone overall,
very solid feeling feeling phone with a good camera and a snappy UI. My
biggest complaint is that Internet Explorer mobile is slow and for the longest
time did not handle touch events properly (I actually wrote a polyfill for
this one:
[https://github.com/CamHenlin/TouchPolyfill/](https://github.com/CamHenlin/TouchPolyfill/)
.) It's a completely broken web experience compared to Chrome on Android and
Safari on iOS which is pretty unacceptable on a "high end" device. Microsoft
should port Chromium or Firefox themselves and it would be a pretty fantastic
device overall

~~~
akshat_h
There are a few third-party browsers like ubrowser that may give somewhat
better experience. I had a lumia 520, and ubrowser gave a better experience
than Internet Explorer on that phone.

------
cromulent
On another note, Nokia sales were up 20% first quarter this year (YoY), and
profits up 65%. Sales were 3.2B€.

[http://company.nokia.com/en/investors/financial-
reports/resu...](http://company.nokia.com/en/investors/financial-
reports/results-reports)

~~~
nacs
And profits were only 181 million for the quarter..

------
mohamedattahri
I wonder how unifying all devices around Windows 10 relates to this number.
After all, it makes sense to reduce the workforce when you only have one core,
one API and one set of bundled universal apps to maintain and develop.

Though I doubt the 7,800 were all engineering and design.

------
higherpurpose
"Restructures" as in making it much smaller.

~~~
tdicola
> much smaller

Not really, they have ~118k employees and are planning to remove about 7800,
so about a 7% reduction. For reference Apple has 98k employees, Google 55k,
Facebook 10k.

~~~
CaptainApathy
Around half of Apple's are retail employees. Microsoft has retail employees as
well, but overall their employee mix is very different.

Still, your main point stands: a 7% reduction is perhaps significant, but
probably not "large."

------
mrbill
I bought a Lumia 1020 a year ago (mostly to play with the 42MP camera) and
it's a _great_ piece of _hardware_ (I'm an Android person for daily / main
use).

However, I upgraded to the first Win10 for Mobile preview, an d now it refuses
to upgrade to a newer build ("Update was downloaded but could not be opened"
\- and I've tried 6-7 times).

If I could get something that was hardware-wise as good as the 1020 (or the
other high-end Nokia phones) that ran Android 5.1.1, it would almost be my
perfect phone.

------
KineticTroi
I wouldn't take this write-down to be any indication of failure. Just a likely
business restructure. One year is nothing in the scheme of evaluating a
business unit.

I like that you can get parts for these Nokia phones on the cheap and repair
them. Also, if you can troubleshoot a browser on any Windows OS, you can
troubleshoot a browser on a Windows Nokia.

My view is that these phones are a lot higher on the quality scale than 99
percent of droids and have less engineered fails than iphone.

------
Lennu
Nokia the company, not the current phone brand, but the company which sold its
phone business to Microsoft. (Yes very confusing)

Anyway Nokia's CEO has made a statement that they are going to start making
phones again: [http://fortune.com/2015/06/22/nokia-ceo-
phones/](http://fortune.com/2015/06/22/nokia-ceo-phones/)

The Nokia - Microsoft deal lasts till 2016.

------
Animats
So Microsoft will now focus on three areas: _" personal computing, cloud
platforms and business productivity._" That leaves Microsoft in the same field
as IBM and HP.

That's OK, but it turns into a consulting and customization business. It's not
mass market. That's sort of where IBM is now. IBM, which once dominated the
personal computer industry, has few if any retail products today.

------
imh
Does anyone know a good adblock-like firefox extension that keeps videos from
playing on pages like this? I hate it so so so much.

~~~
AndrewDucker
[https://support.mozilla.org/en-US/kb/set-adobe-flash-
click-p...](https://support.mozilla.org/en-US/kb/set-adobe-flash-click-play-
firefox)

~~~
imh
Yeah, I really wish there was a solution that wasn't 'nuke all flash by
default.' If there were a 'nuke all flash with sound by default, except for
dedicated video sites (e.g. youtube)' that would be ideal.

------
widowlark
To me, this seems like a positive. Microsoft is infamous for acquiring and
keeping bloat, and its one of the things that has traditionally knocked them
out of the spotlight. With this kind of restructuring, it gives Microsoft a
chance to make their business and strategy right - even if its the second or
third try doing so.

------
reiichiroh
WP apps languish on the unpoliced MS App Store (with tons of rip-off apps and
copyright infringers) abandoned without feature parity (vs other multi-
platform apps for a service) sitting at v1.0 for years before being withdrawn
from sale.

------
rbanffy
Remember when people said that going with Android would doom Nokia?

------
api
Nokia and RIM... they sort of loosely remind me of Commodore and Atari from
the early-mid PC era. Mobile today is sort of like the late PC era -- we have
Apple and IBM in the form of roughly iOS and Google/Android. Interesting how
history repeats. I'm sort of wondering if Cyanogen might not be Microsoft to
Google's Android.

------
skrowl
You're a software company. Get out of the hardware business and start making
Android software.

~~~
soapdog
Surface 3 and 3 Pro are pretty impressive hardware. They work pretty well and
are a joy to use.

~~~
romanovcode
Surface 4 will not be too good though if the rumors that it'll run on M
processor are true.

~~~
joshuapants
I disagree. There are already issues with heat and power consumption in the
Surface Pro 3 especially with the higher end processors. What's the point of a
powerful and power-hungry processor if it's just going to throttle hard when
you really try to use it?

If you need a ton of power, you need a workstation not an ultrabook/tablet
hybrid. The rumored changes should allow for better battery life, cooler
operation, and probably a minimal (if any) impact on performance on tasks that
suit the form factor.

~~~
PhantomGremlin
_What 's the point of a powerful and power-hungry processor_

I strongly agree. The same amounts to laptops, at least for me.

I have a Macbook Pro, 13", 2.9 GHz Core i7, non-retina. About 99% of the time
my laptop is less than 10% utilized. Even when I run VMware/Windows it barely
breaks a sweat.

I got the i7 because it was only $100 more once I got the model with 8 GB RAM.
Wasted money.

Phones, laptops, tablets --> same thing. Mostly used to consume content,
probably less than 10% of users need a high end processor.

As you say, better battery life and cooler operation are the things that
should be optimized for, especially with phones and tablets. I concede that a
decent minority of users can make a good argument for owning a powerful
laptop.

