Failed Nokia Experiment Cost Microsoft Over $8 Billion

Last week Microsoft began taking out the feature-phone bits of Nokia which it found void of value and cumbersome. Now it is reportedly taking out the remainder, namely the smartphone business of the deal too, which could indicate that the smartphone race could very soon be officially over for Redmond.

According to The Verge, the company is writing off $950 million from its business, just a year after it announced write-offs of $7.6 billion. It will also be cutting 1,850 jobs (to add to 7,800 of that time), retaining just a fraction of employees it inherited from the Finns.

Overall, it took losses of more than $8 billion, just two years into the deal, a shocking amount especially if you consider the optimism shown by both the parties when the deal would sign. In hindsight, the deal would probably go down as among the worst-managed in Microsoft’s history.

Microsoft’s phone business wasn’t helped by the fact that it came under a CEO who departed soon after the deal was announced. Under Satya Nadella, the company made a pledge to move away from the core of the smartphone race, resulting in the ouster of Stephen Elop, the infamous Nokia chief.

Initial predictions for Windows Phone were eerily optimistic and unrestrained. Gartner for one predicted Windows Phone as getting a fifth of the smartphone market by 2015. If anything, it was Android which took most of the share and Windows Phone had to succumb to less than a percent of the market as of today.

Microsoft’s smartphone adventure may be over, but at least if you are one for nostalgia, you will get to take your Nokia now.

  • They could have easily gone android n saved themselves bt no they wanted the loss so much badly noone could stop them

  • I need to know, what are Nokia patents worth? No company buys a giant for its market share. Its patents’ haven, that matter in the long run.

  • mobile is the future. microsoft is not giving up on mobile yet. just because it is cutting jobs and incurring loses, it does not mean they are winding up mobile business.

  • No doubt when Microsoft purchased Nokia, there was a very positive and optimistic expectation for the Windows phone. Although it was looking tough but still its User Interface was liked by a lot of people on earth.
    According to my assessment, its main reason for failure was its “app problem”. Firstly, the lack of many popular android apps and secondly, the app quality. I believe if Microsoft would have given the better “quality” of its at least availble apps including FACEBOOK and WHATSAPP! It could never end like such a bad closing like this.
    I have been a die hard FAN and continous user of Windows phone since 2012 uptill now and I finally sold my last windows phone a month ago when I saw the Windows 10 mobile. It just broke all my expectation and I got fed up finally. Microsoft work its hardest level to change and improve UI of Windows 10 mobile but this time again forgot about the apps which had been its primary issue for all its users.
    Such a bad management of its 7.6 billion dollars investment. This was more a case study for me than merely using a Windows mobile. Microsoft I have been watching and observing your each and every move just for the purpose of learning for last 4 years. I nominated Microsoft 100% for this failure for its bad management more than any other factor!
    Thanks for reading

  • Microsoft didn’t even manage its system apps. The search feature in contacts doesn’t even work.

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