Is Microsoft Smartphone Strategy Actually Effective?

Microsoft smartphone business is sinking resulting in a restructuring plan.

Microsoft Corporation is all set to encounter a restructuring plan in terms of its phone business. That will result in the layoff of almost four fifth of the workforce at Nokia where they wish to establish themselves as the industry giant. The company’s core strategy at this point of time is to embrace a turnaround.

The plans to undergo a restructuring plan were announced by the company recently which encompasses a layoff of 7,800 individuals that will belong to the phone business division. Microsoft products have now chalked out its niche audience where it wishes to target those users “business users, cost-conscious customers, and Windows lovers.”

Under the able leadership of Mr. Satya Nadella, the chief executive officer of the company a second round of layoff is likely to take place now. Initially Mr. Nadella bid farewell to almost 18,000 employees.

The tech behemoth is all set to jot down the overall worth of the company’s Nokia handset division which they acquired earlier for an amount of $7.6 billion. Moreover, it has also been estimated by the company that an amount of $750-850 million will be spent for restructuring purposes.

According to Bloomberg, Mr. Nadella wrote an email for the employees that stated, “We are moving from a strategy to grow a standalone phone business, to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family. In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

This strategy by the company is aimed to establish itself as a key player in the phone business unit that will streamline the focus and Microsoft where they will target a limited consumer base. This was the strategy earlier in order to sell the company’s tablet division.

The strategy he used to sell the tablets as that they reduced the range of targeted users in order to become popular which eventually helped them embrace growth where revenues soared substantially and profits also increased to a great extent.

The new strategy by Microsoft seems to come at a relatively critical time frame. The acquisition of Nokia did not really prove fruitful for them since that time there sales have declined substantially. The aim behind this acquisition was to penetrate Microsoft Windows operating system. However, it failed to do that miserably to do so.

So now this will not only help Microsoft redeem its position as a smartphone maker but will also bolster Windows.