Microsoft CEO: our next phones may not look like phones

Microsoft CEO Satya Nadella

Microsoft hasn’t launched a new Windows phone for more than a year now. As Windows Phone market share has shrunk below 1 percent, Microsoft has been busy gutting its phone business and restructuring. That’s resulted in $7.6 billion being written off from the Nokia phone business acquisition, and thousands of job losses. Microsoft said recently that it plans to finalize its phone restructuring by the end of June, but it’s still not clear what the company is ultimately planning for Windows 10 Mobile.

Microsoft CEO Satya Nadella believes Microsoft will still make phones. In a podcast interview (spotted by Softpedia) for Marketplace’s make me smart, Nadella hints that Microsoft is looking at creating phones that don’t look like traditional phones. “We make phones today, we have OEMs like HP making phones and others and we picked a very specific area to focus on which is management, security, and this one particular feature that we have called Continuum, which is a phone that can even be a desktop,” explains Nadella.

Windows 10 Mobile Continuum

Microsoft is focused at the moment on making sure its apps and services are on iOS and Android, says Nadella, but he points to Surface as a good example of how the company can differentiate in hardware. Many have been expecting, or hoping, for a Surface Phone, but it’s clear Microsoft isn’t ready to introduce that type of hardware just yet.

“So when you say 'when will we make more phones' I'm sure we'll make more phones,” claims Nadella. “But they may not look like phones that are there today.” That hint, along with the mention of Continuum and Surface’s unique hardware design, suggests that Microsoft is targeting a device that could transform from a phone into a laptop or PC. Microsoft hasn’t really turned a phone into a PC yet with Continuum, as the Windows 10 Mobile OS it runs requires Universal Windows Apps to work well.

Microsoft will need to do a lot of work to improve Continuum and get desktop apps into the Windows Store before Nadella’s hints at phone hardware are truly realized. It's clear that Microsoft hasn't fully given up just yet, though.