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The Nokia Asha line of "Android X" phones was an odd bird to begin with. Announced before Microsoft acquired Nokia's hardware division, the phones were a venture into a branched version of Android (much like Amazon's Kindle Fire OS) by a company that for the previous few years, had exclusively made Windows Phone OS smartphones.
At the time, many wondered if it was the first step towards backtracking on the Windows Phone OS exclusivity. Then after Microsoft acquired Nokia, it seemed destined for the trash bin -- except, a couple of weeks ago, Microsoft released a second batch of the phones, long after the acquisition. We really hope you didn't buy one.
Layoffs and Restrategizing
It was an odd move, made even more odd by an announcement late last week that Microsoft was cutting 18,000 jobs, many of which would come from its Nokia division. As part of the cuts, the Nokia Asha/Android X project is officially gone, with the low-end devices set for a Windows Phone rebranding, according to an email from the Executive Vice President of Microsoft Devices Group Stephen Elop.
The email also outlines the company's mobile phone strategy for the foreseeable future: instead of a two divisions for mobile phones and smartphones, there will be one division that focuses on Windows-based smartphones exclusively -- an obvious move considering that smartphones are the new normal for pretty much all cell phone owners.
Focus on the Affordable Smartphone Segment
Elop notes that the company's existing Nokia X designs will be repurposed for Windows Phone devices in an effort to target the low-end market, which is the fastest growing segment of the smartphone market, especially in developing nations.
It's a smart strategy, and not just for developing nations or first-time buyers -- by lowering the entrance cost to the Microsoft ecosystem, it makes it far less of a risk for your average smartphone buyer to dabble in a new operating system. And for those emerging markets and first-time buyers, a cheap phone gets users hooked into Microsoft's services and apps, making it far more likely that their next phone will be a higher-end Microsoft device. That is exactly how Android captured the vast majority of the smartphone market -- by flooding stores with low-end devices.
At this point, it's clear that Microsoft can't compete with today's high-end users, who are dedicated Apple and Android users. But if the company can snag the low-end market, tomorrow's upgraders could end up choosing a high-end Lumia device.
The Nokia X strategy, on the other hand, made less sense: create an alternate operating system to compete with yourself, one that had fewer apps and whose only saving grace, from the company's standpoint, was its tie into Microsoft's cloud services and vague resemblance to the Windows interface.