Microsoft Expects Windows Phone to Continue Its Collapse in the Short Term

We've known for a while that Windows Phone is declining, but the latest financial results provided by Microsoft for the first quarter of fiscal year 2017 revealed a 72 percent drop which does nothing more than to confirm that the future will be gloom for Redmond's smartphone platform.

And while there's still hope that Windows Phone will recover at some point in the future, it appears that not even Microsoft itself expects this to happen on the short term, with Amy Hood, CFO and EVP of the company, explaining in a conference call with analysts after the earnings report that continued decline is very likely.

Phone and Surface decline

Hood said that phones would continue to drop in the next quarter, and so will do the Surface lineup, as the company's existing models are turning 1. Microsoft is already trying to prevent a drop with discounts and special offers in the United States and in other markets, but the next quarter results will reveal if the Surface still sells well enough one year after its launch.

"Phone revenue will continue to decline and as we previously announced, we anticipate closing the sale of our feature phone business in Q2. We expect surface revenue to decline as we anniversary the product launch from a year ago," Amy Hood explains.

According to different research firms, Windows Phone has already dropped below the 1 percent market share threshold, and some put it closer to 0.5 percent.

Microsoft, on the other hand, seems to be more interesting in improving the software side of its mobile effort, as it's preparing a major Windows 10 Mobile update with Redstone 2 in the spring. At the same time, the hardware strategy is lagging behind these days, and rumor has it that the Lumia brand would go away completely.

Microsoft says that it's betting big on partners for bringing phones running Windows 10 Mobile to the market, but for the moment, the number of companies interested in such devices is still well below expectations.

Source: Microsoft Expects Windows Phone to Continue Its Collapse in the Short Term