If you have a headache, it is a good idea to stop banging your head against the wall. That is what Microsoft chief executive Satya Nadelladid this week when he cut back his company’s struggling smartphone division, writing off almost all of the $7.9bn (net of cash) that Microsoft paid for Nokia’s phone business only 15 months ago.
However, the strategic overhaul at Microsoft looks incomplete, even counting other recent moves. While Mr Nadella has lessened the pain, there is still more to be done. The headbanging was the fault of his predecessor, Steve Ballmer.
The former chief executive’s main justification for buying the Nokia division seemed to be, without better ideas, why not give it a go? It turns out that this is not a basis for sound strategic thinking. Taking on Apple in high-end smartphones and the entire Android ecosystem in every other part of the market were non-starters.