Satya Nadella email to employees on sharpening business focus

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

Microsoft isn't out of the game as much as some of us may think. Besides the fact that they're Microsoft and can keep churning on an industry until they're blue screen in the face, they actually have a bit of a foothold in the low end market.

The Nokia Lumia 520 was a pretty big success in the States, and their other affordable phones have done relatively well for them overseas. All of their attempts to break into the high end market have fallen on their face.

Microsoft has a lot going for it right now from a software perspective: Windows 10 looks great, and Outlook, Sunrise, Office, OneDrive are making waves on iOS and Android. The company needs to find a way to turn all that good will gained from their software and turn that into hardware sales.

Or they could give up the mobile hardware game altogether, but they seem to have no interest in admitting defeat.