Microsoft all-but quits the mobile market

Microsoft is officially calling time on its $7.1 billion Nokia acquisition, announcing that it is to cease developing consumer-centric smartphone devices and sell off its featurephone assets to Chinese electronics giant Foxconn.

In an email published in full by Ars Technica, Microsoft's Terry Myerson admitted that the company is 'scaling back' its phone efforts but denied that it amounted to an exit from the market altogether. 'We will continue to update and support our current Lumia and OEM partner phones,' Myerson told staff at the company, 'and develop great new devices.'

The precise nature of the 'scaling back,' however, doesn't leave much room for further progress in the mobile arena: Microsoft is to lay off 1,850 mobile-centric staff, of which 1,350 are based in Finland at former Nokia sites, on top of the 7,800 laid off last year. The email also comes a mere week after the company sold off the featurephone business it had acquired as part of its deal with Nokia, with Foxconn stepping in to pick up the division for just $350 million.

Microsoft has made much of the synergy between Windows Mobile 10 and its desktop equivalent, but Myerson admits that if Microsoft wants to remain at the forefront of software it's going to have to stop concentrating on Windows Mobile and its sub-1 percent market share. 'Our company will be pragmatic and embrace other mobile platforms with our productivity services, device management services, and development tools,' Myerson told staff, 'regardless of a person’s phone choice, we want everyone to be able to experience what Microsoft has to offer them.'