Not giving up on phones, just restructuring business: Microsoft

Making it clear that Microsoft is not giving up on phones, company COO Kevin Turner has asserted that the technology giant is restructuring its phones business for profitable growth and will focus on only a few devices that will grab market share.

Turner, addressing over 14,000 partners, resellers and vendors at the Microsoft Worldwide Partner Conference 2015 here, said people have been asking what the company is doing about its phone business, particularly in the wake of last week’s announcement that Microsoft would be cutting 7,800 jobs and write down USD 7.6 billion, all related to its Nokia business.

“Here it is: the reality is, we care about phones. We are still in phones. We are restructuring that business for profitable growth so that it can be sustainable, “Turner said in his vision keynote address yesterday.

He clarified that the company will not dish out a lot of devices but focus on only a few that have the potential to capture market share and address consumer needs.

“We are in it, we are not going to have a lot of devices. We’re going to build a profitable portfolio, we’re focused on a few killer devices that grab share and that enable to help us showcase our uniqueness and solutions. We are actually restructuring to grow, but grow profitably. That’s the ins and outs of what’s the deal with phones,” the company’s Chief Operating Officer said.

Outlining the company’s plan for the phone business going forward, Turner said Microsoft is changing its manufacturing processes, “modernising those and making them contemporary, we’re changing some of our go-to-markets, and using multi-tiered distribution.”

“We are right sizing the organisation, and we are hard at work at what’s the next big wave of innovation relative to that size of device that we need to be working on and geared towards,” he said.

“So make no mistake we’re not giving up on phones, we’re resetting for profitable growth, and we will continue to innovate in that space, and it remains a very important part of the portfolio,” he added.

Turner’s remarks come just a week after the Redmond-based company’s India-born CEO Satya Nadella announced plans to restructure the phone business to better focus and align resources.

The restructuring included elimination of up to 7,800 positions, primarily in the phone business, resulting in a write down of about USD 7.6-billion related to its Nokia phone business.

In addition it will also bear a restructuring charge of approximately USD 750 million to USD 850 million. “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,” Nadella had said.

“In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility,” he said.

Turner also launched a scathing attack on Microsoft’s competitors like Google and Apple, issuing a clarion call to win back customers from the rivals.

He said Microsoft has had great success with Office 365, with over 1,200 customer win-backs over the last year and a half against Google apps.

“These are customers that we won back. We have got to go rescue the rest of the Google apps customers. There are still a few out there, go rescue them and get them over and do so in a big way,” he said to the partners.

“We have to go and win every single deal versus Google. We have better technology and we have an enterprise ready cloud. We do not snoop your email, we do not serve you ads, we do not drive cars around listening to your conversation. We are not that company,” he said.

On Apple, he said Microsoft-supported laptops are more efficient and nearly 100 dollars cheaper that the MacBook Pro.

“We want people to move from using our products to loving our products. That is our plan of attack for this next year,” he said.