In a press release earlier today Microsoft announced that they were selling their feature phone business to FIH Mobile Ltd, a subsidiary of Foxconn, and HMD Global, Oy, a new company formed to build Nokia tablets and phones that will use Android as their OS.
HMD Global will have exclusive use of the Nokia brand worldwide over the next 10 years based on a strategic licensing agreement they have signed with Nokia Technologies.
“HMD intends to leverage and grow Nokia's global brand reach, delivering beautifully designed, high quality products to people all over the world in line with Nokia's brand promise. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.”
Eventually, once the sale is complete, HMD Global and FIH Mobile Ltd. will work together to design and manufacture these new devices.
The sale price for all of the feature phone assets from Microsoft is said to be $350 million dollars.
There is an interesting tidbit in the Microsoft press release that I want to draw your attention to and which may help to answer the question behind this article.
“Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.”
Initially, when I shared that snippet over Twitter, I commented that Microsoft would continue to build Lumia phones. However, as it was pointed out to me in a reply from a follower, the term used in this quote is that Microsoft will continue to support Lumia phones. Nothing is mentioned about building the devices.
By the way, the quote from Microsoft’s press release also reiterates that they plan to continue development of Windows 10 Mobile which is something that makes sense in their overall windows 10 OS strategy.
All of that brings me to this prognostication:
Could Microsoft be looking to move to a single flagship device, such as the rumored Surface Phone let’s say, and focus their manufacturing efforts on that single hero device?
Microsoft has proven that this type of single brand/device focus can be very successful and all you have to do is look back over the last few years and see how their Surface brand has grown and become a multi-billion dollar annual business for them.
If Microsoft was to decide that they would only build one Windows 10 phone device, such as the rumored Surface Phone, it means they would be building upon a well-established brand and creating high end devices along the lines of Surface Pro 4 and Surface Book but for their mobile users.
That quote from the press release also mentions phones from some of Microsoft’s OEM partners such as Acer, Alcatel, HP, Trinity and VAIO. Some of these phones will help fill the range of devices necessary to attract all levels of users across multiple price points.
Bottom line is that there is no evidence that would indicate that these actions will save Windows 10 Mobile and help it to become a widely adopted third party mobile ecosystem. However, as we have heard from Microsoft before, they want to build devices that light up the uniqueness of Windows 10 and its many features and a flagship Surface Phone would certainly allow them to do that.
Focusing on a single hero device, kind of like what Apple does with the iPhone, would allow Microsoft to accomplish their goals yet minimize their overall risk in the market.
What do you think of Microsoft shifting their focus to a single flagship device for Windows 10 Mobile?