Microsoft Wants To Field ‘Great Flagship’ Smartphones Under Windows 10, CEO Says

The July 29 launch of Windows 10 will be the “first step” in Microsoft’s ambitions to build a base of a billion Windows 10 “active devices” by 2018, CEO Satya Nadella said on an earnings call Tuesday. Based on feedback from more than 5 million people who have been using Windows 10, “we believe people will love the familiarity of Windows 10 and the innovation,” Nadella said. Though the PC “ecosystem” has been “under pressure” recently, Windows 10 will “broaden our economic opportunity and return Windows to growth,” he said. In recent days, Advanced Micro Devices and Intel downgraded their PC sales expectations for the year despite any anticipated sales bump from the impending Windows 10 launch (see 1507170035). Microsoft’s OEM partners have more than 2,000 “distinct devices or configurations already in testing for Windows 10 upgrades as well as hundreds of new hardware designs,” Nadella said. “We are delighted that the first of these exciting new devices will start to be available on Windows 10 launch day, and by this holiday we will be selling the widest range of Windows hardware ever available.” Nadella also thinks Microsoft will field “great flagship” premium smartphones for Windows 10, he said in Q&A, conceding that’s a market “segment” in which “we don't today have good devices, and we hope to change that with Windows 10.” Nadella’s long-term view is for Microsoft smartphones to “spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly,” he said July 8 in announcing the decision to cut up to 7,800 jobs in the restructuring of Microsoft’s smartphone business (see 1507080024). In “value” smartphones, “that's the place where I want us to be much more efficient,” he said on the Tuesday call. Microsoft needs to be “smart” about how many SKUs in that segment “we want to generate” and at what price points, he said: “That's where you will see the most significant operational changes from how we operated last year to the coming year.”