Microsoft has announced its Earnings for Q4 2015 and Lumia Sales figures are rather disappointing. The Lumia sales volume has seen a steep decline from one year ago, when it had touched its peak at 10.5 million. This quarter Microsoft was able to sell only 4.5 million Lumias.

Doom, Dead-end or was it expected??

Microsoft under Satya Nadella changed the underlying Windows Phone strategy followed by Ballmer and Co before Nadella took the helm. So, it was no more the volume growth strategy followed by Nokia and Microsoft, when they were partners for growing “Windows Phone Eco-system” under Elop and Ballmer and only Microsoft later when it bought Nokia’s D&S division. Under Nadella however, not only harsh decisions like laying off 7800 ex-Nokia employees and writing off the Nokia D&S purchase were made but also Microsoft moved away from the earlier strategy of growing the Lumia volume at any cost even when it meant bleeding money.

The intense competition in Smartphone arena has made the matter worse for Windows Phone and while one year back, competitive offerings like Lumia 535 brought huge volume for Lumia, Microsoft under Nadella seemed not interested to bring such competitive devices at right prices. It may be argued that profitless growth isn’t sustainable but sales volume decline from 10.5 to 4.5 million also doesn’t signal “sustainability”. So, it was largely expected that Lumia sales will decline but perhaps none expected mere 4.5 million sales from the Holiday quarter. With only Lumia 550 as the volume driver in Lumia X50 range, Microsoft has though sent enough signals to market that it is not willing to fight against Android vendors that bring much better hardware at similar pricing. So, one shouldn’t be shocked if this downward trend continues in even coming quarters of 2016.

What happens next?:

Microsoft’s CEO Satya Nadella has always maintained in his interviews how he and his team are committed to  make Lumia devices if no other vendor will make it and how Windows 10 Mobile is one node of the entire “mobility of experience”. So, we still think Microsoft will keep pursuing Windows 10 Mobile and Lumia devices and there may be one or two launches in near future. Microsoft is also working on Lumias based on Snapdragon 820 and then there is the Surface Phone. So, while there may be gloom when sales figures hit us every quarter, Microsoft is all set to bring premium smartphones under Lumia and may be even Surface branded phone in later part of 2016.

The only question that comes to mind is whether Microsoft will still remain relevant for the Mobile world and buyers, when it finally comes with its Surface Phone later this year? It is an uphill task and Microsoft is losing believers at a very rapid pace!!