Mobile Digest: Microsoft guts Nokia operation, slashes jobs and declares handset division worthless

Tech companies take big strides toward making all devices “Wi-Fi Aware”, as Microsoft throws up its hands with its mobile handset business. Andrew Tolve reports.

In this week’s Digest: Microsoft, Nokia, Flipagram, Sequoia, Kleiner Perkins Caulfield & Byers and Index Ventures, Universal Music Group, Sony Music Entertainment, Wi-Fi Aware, Apple, Intel, The Wi-Fi Alliance, Google, Purchases on Google, Apple Pay, Deloitte, Samsung Pay, Comcast, Verizon, ESPN, CBS Sports, Vice Media, Forrester Research and Argus Insights.

In the news

Microsoft wrote down the value of its Nokia handset business by a whopping $7.6 billion, effectively acknowledging that the mobile handset business is worth nothing just a year after purchasing it for $7.2 billion. Ouch.

Microsoft CEO Satya Nadella has been cool on the hardware side of Microsoft’s business ever since taking the helm in 2014, which seems sensible given the fact that Microsoft’s software drives such large profit margins while Windows phones deliver little profit on meagre revenues, squashed as they are between Apple iPhones and Android smartphones.

Microsoft will continue to make some Windows Phones, but only one or two new devices a year in three strategic bins: phones for businesses, phones for ardent Windows users and phones for low-cost consumers.

Nadella plans to lay off upward of 7,800 jobs. Nokia’s former CEO Stephen Elop is already gone.

In the money

Flipagram, the free mobile app that lets users create short video compilations set to music, raised $70 million in a Series B round of funding — ‘cause that’s the kind of world we live in. Funding comes from big venture capital firms of Sequoia, Kleiner Perkins Caulfield & Byers and Index Ventures. Flipagram also announced partnerships with the likes of Universal Music Group and Sony Music Entertainment so that users can set their videos to a near universal catalogue of music.

In other news

The smartphone in your pocket is about to become connected to all the other smartphones and tablets and digital devices around you. Oh, and to all the businesses in your vicinity as well. That’s the long and the short of two news items from last week:

Wi-Fi Aware” is a new release from Apple, Intel, Microsoft and pretty much every other big tech player you can think of, all of whom worked in unison under the umbrella of the Wi-Fi Alliance to make the new technology happen. Wi-Fi Aware is a discovery mechanism that continuously runs in the background of a device, picking up and connecting with other nearby devices and allowing your apps to use that information to push stuff of interest in your direction. Say a long-lost friend of yours happens to be walking down the same street as you: Wi-Fi Aware will allow an app like Facebook to ping you. Say you’re dying for a new pair of Crocs for your kid and there’s a shop that’s selling them, unbeknownst to you, right down the street! Wi-Fi Aware will clue you in. Check out this video for more.

Similarly, Google announced a network of bluetooth low energy (BLE) electronic beacons that provide precise location and contextual cues within apps to help smartphone users navigate the world. Google rolled out an open beacon format called Eddystone that allows any developer to harness the beacons on Android or iOS. Intro video for developers here. Apple already offers something similar in the form of iBeacon.

On the mobile payment front, Google made it even easier for you to shop on your mobile phone. Now when a Google ad pops up on your screen, it will include a pay button that will take you to a screen where you can buy that item. “Purchases on Google” will keep users within Google, but it will offer secondary branded screens that display specific merchandise and allow users to search/shop for other items from that same brand.

Apple Pay has finally gone live in the U.K. That’s a nine-month delay from when Apple Pay launched Stateside for all Brits out there who have been counting the days, which, it seems is quite a lot. Research from Deloitte suggests that there’s far greater interest in the U.K. in mobile payments than in the U.S., with the 18-34-year-old segment leading the pack with 34% positive attitudes.

Samsung Pay went live in Korea. Granted, it’s just a pilot at this point, with big releases soon expected to follow in the U.S. and Europe. Samsung Pay differentiates from Apple Pay in that it doesn’t require vendors to upgrade existing point of sale devices to accommodate mobile payments.

The mobile video surge continues, with Comcast unveiling a new cable Internet service called Comcast Stream. The service doesn’t work with traditional TVs, just mobile devices and computers, all of which will be supplied with cable service for $15 a month. Rollout starts end of summer.

Verizon made headway on its mobile video service, which will deliver streaming TV from the likes of ESPN and CBS Sports and original video content from the likes of Vice Media. The latter Verizon inked a deal with last week, ensuring that Vice will help produce original exclusive content for Verizon’s forthcoming video service. Details as to when the service will debut and what it will be called remain murky.

On the device front, several studies suggest that consumer interest in tablets and, yes, even smartphones is starting to plateau. Tablet sale stagnation won’t come as a surprise to anyone who follows the market. The iPad and others of its ilk were too hot to handle a couple years ago; now everyone has seemingly moved on to the Apple Watch. Forrester Research says that tablets aren’t going away, especially since businesses find them useful and customers may upgrade every once in a while, although certainly not with the fervor that they did a few years ago. iPad sales are down 18%. Android tablets reflect similar slips.

The smartphone data is more surprising. Research firm Argus Insights says that thirst for smartphones has diminished 8% in the U.S. in the past six months. It’s not that the desire for or ubiquity of smartphones has changed at all, says Argus. It’s just that new smartphones don’t seem to be offering enough new features of value to warrant shelling out the additional $500 for them. In other words, we’re living in a world of “upgrade fatigue.”

#FirstWorldProblems.

The Mobile Digest is a biweekly lowdown on the world of mobile, combining Open Mobile Media analysis with information from industry press releases.

Andrew Tolve is a regular contributor to Open Mobile Media.