Published in Mobiles

Microsoft might have lost millions on smartphones

by on29 June 2015

Didn't do as well as expected

Microsoft might be getting ready to launch Windows 10 Mobile later in the year, with new devices and flagships, but it might have to write off millions on mobile deals that did not go so well.

Microsoft wanted to hold 15 per cent of the smartphone market by 2018, the company hoped that Lumia smartphone sales would increase in the years leading to that date.

However Redmond has found that the sales are not increasing and according to a SEC filing it has said that "In this highly competitive and volatile market, it is possible that we may not realize our forecast."

Unless Lumia gets some traction Microsoft will have to write off all or at least some of the near $10 billion it paid for Nokia's hardware business.

Redmond is used to this sort of thing it wrote off $6.4 billion after the purchase of aQuantive three years ago, and a $1 billion worth of its own Surface tablets two years ago.

Microsoft's 10-Q filing with the SEC said that during the third quarter of fiscal year 2015, Phone Hardware did not meet its sales volume and revenue goals, and the mix of units sold had lower margins than planned.

"Given its recent performance, the Phone Hardware reporting unit is at an elevated risk of impairment. Declines in expected future cash flows, reduction in future unit volume growth rates, or an increase in the risk-adjusted discount rate used to estimate the fair value of the Phone Hardware reporting unit may result in a determination that an impairment adjustment is required, resulting in a potentially material charge to earnings."-

Last modified on 29 June 2015
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