The abrupt departure of Stephen Elop as leader of the hardware devices business at Microsoft, which will instead be united under Terry Myerson, creates a big, obvious question: is Microsoft about to kill the Lumia smartphone business that it bought from Nokia for $9bn?
Let’s go through the arguments for and against.
Kill it because: the Windows Phone business loses money hand over fist – no phone maker, including Nokia, has ever managed to make it profitable. My analysis of its financials suggests that in Q1 it was losing around $40 per handset even if you assumed that featurephones made zero profit. Even assuming a loss per featurephone, the calendar Q1 (fiscal Q3) figures still showed a $29 per handset loss, even with generous assumptions about marketing and ignoring goodwill writeoffs.
And Microsoft has warned that it’s going to…
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