Microsoft lost $7.6 billion on phones: why Nokia Lumia failed.

According to ТСН: Microsoft spent about eight years and $7.6 billion on the mobile segment, ultimately deciding to shut it down.

After acquiring Nokia in 2012, the corporation faced significant losses that exceeded the revenue generated, and the ambitious project did not become the expected success for the company.

Closure of the mobile phone division

For most of the decade, Microsoft attempted to change the situation in the smartphone market, but eventually liquidated its mobile phone division. This was a major disappointment for many Nokia Lumia fans.

In 2015, the company announced job cuts of 7,800 employees and wrote off $7.6 billion in losses in the mobile segment. This continued the massive layoffs of 2014 when 12,500 employees of the Nokia division, acquired for $7.3 billion, were laid off.

“We are moving from a strategy of developing a standalone phone business to a strategy of developing and creating a dynamic Windows ecosystem that includes our own line of devices,” said CEO Satya Nadella.

Competition with iOS and Android

Former Microsoft CEO Steve Ballmer saw Nokia as the foundation of the Windows Phone ecosystem, but the company failed to compete with Apple and Google, which developed their platforms much faster.

As a result, Microsoft lost more than it spent on acquiring Nokia. The first attempts to create their own smartphone began back in 2008, and by 2010, software had been developed that became the basis for the Lumia series. Users were able to work with Microsoft Word, Excel, and PowerPoint on smartphones, essentially having a pocket computer running Windows.

Despite stylish design and touchscreen, the devices lagged behind the development of iOS and Android. Only nine models of Lumia were released over time, and another device was never put on sale.

User reviews of the smartphones were varied: they were criticized for slow performance, freezing, and instability.

Closure of the mobile business

Despite Ballmer's desire to continue the mobile business, in 2014, management recognized it as unprofitable. The project was ultimately shut down, and it was never revisited.

Microsoft tried once more to enter the smartphone market with the Surface Duo — an Android device with two touchscreens introduced in 2019, but this experiment also failed: the project was closed in 2023.

Thus, Microsoft’s mobile story became an example of significant financial loss, although many users still nostalgically remember their Lumias.

Remember what 5G is and why you need it.

Despite ambitious plans to enter the mobile technology segment, Microsoft was unable to firmly establish itself in the smartphone market. The end of this phase became an important milestone for the company, which focused on other directions. The situation with mobile phones, though it ended in failure, left its mark in the memory of many users who recall the innovative solutions offered by Lumia.