Microsoft moves ever closer to calling time on its smartphone business

Microsoft moves ever closer to calling time on its smartphone business

There was once a time when Microsoft was one of the most untouchable companies, not just in the tech sector, but in the overall business landscape.

But the glory days of the late 90s and early 2000s have perhaps never looked further away, with the company finding itself having to scale back in order to remain a competitive force.

This has been particularly relevant for the firm's smartphone division, which will still be reeling from the news that as many 1,850 jobs will be cut from its hardware business.

Such a situation would have been unthinkable a couple of decades ago, but the fact is that Microsoft has found it difficult to replicate its success and expertise in the smartphone market, particularly amid the success of rivals such as Android and Apple.

Market share drops

The company's difficulties in the mobile hardware market have been well documented, with figures from the first quarter of the year suggesting that Windows Phone's had a market share of just one per cent.

Such figures have come despite the company's takeover of Nokia, which was itself one of the key players in the mobile phone market.

Indeed, reports have suggested that as many as 1,350 of the 1,850 job cuts will be made in Nokia's stomping ground of Finland.

For many analysts these actions resemble a company that is on the verge of exiting the smartphone market, but there are already signs that suggest those assessments may be premature.

In a memo obtained by The Verge, Terry Myerson, Microsoft's head of Windows and Devices, insisted that the company is merely "streamlining" its smartphone hardware business, rather than abandoning it completely.

He said: "I used the words 'be more focused' above. This in fact describes what we are doing (we're scaling back, but we're not out!)".

The construction of new devices has already been mooted, although cynics may well suggest that this will still be 'Last Chance Saloon' for its smartphone arm.

There have already been some suggestions that the assurances from Microsoft are not in line with actual policies. According to Reuters, an anonymous source reportedly told Finnish newspaper Helsingin Sanomat that Microsoft will stop designing and manufacturing mobile phones altogether.

The next BlackBerry?

One thing is for sure, if Microsoft is to continue with the manufacture of smartphones, it may well have to take a good look at its Windows 10 Mobile platform, as the two parties are now mutually exclusive.

There are striking similarities between Microsoft's current situation and that which affected rival firm BlackBerry in recent years.

The Canadian firm initially looked to spark a recovery by way of creating innovative mobile software solutions, before eventually deciding to get back into the business of making smartphones once again.

However, BlackBerry re-entered the hardware game having made one crucial difference; it abandoned its traditional BlackBerry operating system.

Microsoft may well decide that a similar path is required in order to spark its own recovery.