MicroSoft’s days as a Smartphone company are coming to an end. And that’s a really smart move by Microsoft.Last week, the company said it would sell the mobile phone business it acquired from Nokia in 2014 to manufacturing giant Foxconn. Now Microsoft is laying off 1,850 as it shrinks its mobile hardware division further.
Microsoft will still develop the Windows 10 Mobile operating system and hints that it will still sell phones to corporate customers. So it’s not giving up on smartphones entirely. But it might as well be. The company was never able to get much of a foothold in the market—so much so that last year Microsoft took a $7.5 billion write down on its Nokia acquisition. (It also laid off so many people in Nokia’s home country of Finland that the government applied for economic assistance from the European Union.
And yet, in giving up on smart phones, Microsoft is arguably a stronger mobile company than ever. But instead of pouring money into making phones, the company has figured out savvy ways to put more of its products on other companies’ phones and mobile operating systems than ever. While it’s obviously terrible for all the people who have been left jobless, it turns out that at the height of the mobile era the smartest thing most tech companies can do is not make phones.