In the memos written by CEO Satyella Nadella and mobile device chief Stephen Elop announcing layoffs at Microsoft, both executives also announced a subtle change in strategy: Microsoft is planning to change the operating system of its Android-powered Nokia X line to its own Windows Phone. Shocker.
According to Elop, Microsoft will continue “to sell and support existing Nokia X products” but plans to immediately shift “select future Nokia X designs and products to Windows Phone devices.” The Nokia X1, which was released earlier this year, was likely conceived and developed before Microsoft officially took over Nokia. The Nokia X2, its successor, was announced by Microsoft last month, and it will still run Nokia’s version of Android, but future low-cost devices most likely will not.
The Nokia X line of devices was always aimed at emerging markets, as a low-cost device, usually retailing under $100. And it appears to be a success, judging by its 1 million pre-orders in China. But Microsoft and Windows Phone are well capable of powering low-end devices — either Nokia’s own Lumia 635 or through a new Microsoft initiative to waive OS licensing fees for certain handset makers, leading to a plethora of inexpensive devices for emerging markets.
So Android didn’t fit into the plan because phone sales alone are not Microsoft’s end goal, as it was at Nokia. As Elop writes, “Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft’s digital work and digital life experiences, while accruing value to Microsoft’s overall strategy.” That’s hard when you’re selling devices running a competitor’s operating system.