It’s quite amazing how far Microsoft has fallen when it comes to smartphones. In its most recent quarter (fiscal Q3 2017), it booked just $5 million in revenue from phone hardware. That is a big drop from fiscal Q3 2015, when Microsoft reported $1.4 billion in revenue on phone hardware.
Looking at its performance in the smartphone arena, it’s quite apparent that Microsoft either needs to completely rethink the way it approaches smartphones or abandon the sector altogether (which likely wouldn’t be a wise decision given how much smartphones dominate our lives today). Luckily, for those that still believe in Microsoft’s ability to produce a competent smartphone, there may be hope in the future.
In an interview conducted on Marketplace.org’s “Make Me Smart” podcast, Microsoft CEO Satya Nadella was directly asked if the company would produce another smartphone. He provided the following response:
We make phones today. We have OEMs like HP making phones, and others. We've picked a very specific area to focus on, which is management security, and this one particular area called Continuum, which is a phone that can even be a desktop...
And we're looking for “What's the next change in form and function?” What we've done with Surface is a good example. No-one before us had thought of 2-in-1s, and we created that category, and made it a successful category, to the point where there are more 2-in-1s coming, and that's what we want to do. So, in a sense, when you say “Will we make more phones?”, I'm sure we will make more phones, but they will not look like phones that are there today.
So, what would this proposed phone look like? Given Nadella’s comments, it’s unlikely that it would be anything like today’s current crop of smartphones that are moving towards edge-to-edge displays. Instead, we may see something along the lines of the foldable phone concepts that we’ve seen in Microsoft patents.
And perhaps the company could go even further by bolstering its Continuum experience, blurring the line between a smartphone and a full-fledged PC experience. Microsoft’s decision to create a version of Windows 10 that natively runs on Qualcomm Snapdragon processors could make that dream a reality.