Microsoft's Stephen Elop: We're out of the Android game
In a memo to the entire company, the former head of Nokia says that Lumia will be the standard-bearer for Windows Phone and that Nokia X will switch to Lumia and Windows Phone.
Microsoft exec Stephen Elop is making it abundantly clear: Microsoft has no intention of staying in the Android business.
In a memo emailed to employees on Thursday, Elop said Microsoft's devices business will concentrate "on the areas where we can add the most value" and noted that Nokia X smartphones, which run on heavily modified versions of Android, will migrate to Windows Phone.
"We plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices," Elop, executive vice president of Microsoft Devices & Services, wrote in his memo to employees. "We expect to make this shift immediately while continuing to sell and support existing Nokia X products."
Nokia's X line of devices was the company's attempt to attract more budget-conscious customers to its platform. This was also a major story in the ongoing Microsoft-Nokia saga, since it ran on Android -- Microsoft's chief competitor in the mobile market. It was initially believed that Microsoft would stick with Android on Nokia X devices, but according to Elop, the cheaper end of the smartphone market is a key area of growth for Microsoft, and the company wants people buying those products to run on Windows Phone and not Android.
Microsoft on Thursday announced it will cut 18,000 jobs in the next year, making it the company's largest layoffs in history. A large chunk of the cuts -- 12,500 -- will come from the Nokia devices business Microsoft acquired for $7.2 billion in April. At that time, Microsoft brought on roughly 25,000 Nokia employees.
Elop, who sent the e-mail following the lay-off announcement, was also somewhat steadfast in his belief that Microsoft is doing the right thing by axing a major portion of his former employees, saying that while the cuts to Nokia's staff are major, they've become a necessary component for Microsoft as it attempts to adapt to a rapidly changing marketplace.
"Change is necessary," Elop wrote in the e-mail to employees. "As difficult as some of our changes are today, this direction deliberately aligns our work with the cross company efforts that [Microsoft CEO] Satya [Nadella] has described in his recent emails. Collectively, the clarity, focus and alignment across the company, and the opportunity to deliver the results of that work into the hands of people, will allow us to increase our success in the future."
In a memo to employees on Thursday, Nadella said the layoffs "are difficult, but necessary." They follow a 3,100-word manifesto he wrote earlier this month teasing "big changes" at the company and calling Microsoft a "productivity and platform company," eschewing the idea that it needs to be a software-first firm to be successful.
It is clear from Elop's e-mail, however, that mobile is exceedingly important to him. He only once mentioned other areas he controls, including the Xbox and Surface divisions, saying only that "there will be limited change" in those areas.
"More broadly across the Devices team, we will continue our efforts to bring iconic tablets to market in ways that complement our OEM partners, power the next generation of meetings & collaboration devices and thoughtfully expand Windows with new interaction models," Elop wrote. He went on to say that Microsoft will "right-size" its manufacturing operations, focusing mainly on making devices in Hanoi, Vietnam, and handling phone engineering efforts in Finland.