Bloomberg's Rana on Microsoft Paring Back Smartphones (Audio)

to seventeen thousand, eight hundred sixty six. That is a gain of nine tenths of one percent. News stack up thirty five points, a gain of seven tenths of one percent. The Old on the tenure one point eight six percent. Gold down five dollars the ounce to twelve twenty four, a drop of four tenths of one percent. Crude Oil West Texas Intermediate forty eight up one point six percent. Should point out that Brent is now trading at forty six.

It is up one point eight percent. I'm Charlie Pellet, and as a Bloomberg business flash, you're listening to taking stoff with Kathleen Hayes and Kim Fox on Bloomberg Radio. We are broadcasting live today from the first ever Bloomberg Breakaway Summit here in New York City, top executives, top business people from around the country and the world talking

about how to achieve growth in a company. One more signed today that Microsoft's for a into smartphones was not a very good way to provide growth and revenue for them. Microsoft it's going to cut back as many as one thousand, eight hundred fifty jobs and took a new imparamid chart charge as CEO Saye Nadella continues to pair back the

company's ambitions in smartphones. Joining us now discuss all this and more is An gran, a senior analyst of software and I T Services for Bloomberg Intelligence, joining us from our Bloomberg eleven thirties studio in New York. Anorag It is just one more step down the path for Microsoft. Yes, I mean, once you know, start there inherited this phone business and it doesn't look like he was a big fan of it. And ever since he has coming, he's been you know, kind of right sizing it down to

um and I would say almost close to zero. At this point with um, you know, very few phones left in the market at this point that Microsoft will ever make, you know, even in the future, for example on a rock. How did the business get to be so bad so quickly? This is nine and a half billion that they've had to write off of the Nokia DEALIM it's it's a question of strategy. I don't think that you know, you know,

he he wants to be in the handset business. Frankly, you know, all he wants to do with sell software, whether it is to the consumers, all the enterprises, and he thinks it can be done without these you know, making these math devices, which is contrary to what the previous CEO thought. Yeah, you know, but how did two very smart people come to very two, two very different conclusions. I mean, it just doesn't it kind of spin your

head a little bit. Well, that's a different approach to how to to make sure that you, as the user don't leave out of the Microsoft ecosystem. And the way Satia has gone about it, it said, it doesn't matter to me if you use an iOS divide as an Android device. If I just want to make sure you

don't lose word, you don't loude Excel. You still use Skype on all these devices, So he wants to make sure that the software connection that you have as a user, you know, is not lost, irrespectable platform you have well, But isn't also the case that Steve Bomber made a bad business decision and starching Adella is making a good one.

Look at this, Uh, Windows phones have less than one percent of the global smartphone market in the first quarter according to Gartner, and that compares with Android for Apple's iOS. So it seems to me, it doesn't boggle my mind at all. Seems that starting Adella is just reading the hand running on the wall. What about the business phone market?

What's going on there for Microsoft? You know? Once again, I mean that is a market it's possible that they will still try to you know, penetrate given their large installed base off Windows operating systems. You know, already within the enterprise now that you know, BlackBerry has been the leader over there, and you know, the thing that the movement that's happening over there is you're bringing your own device.

You know, you really don't have that many you know, company issued phones that at this point and the bulk of them are still you know, used by the consumer. So I mean it's it's it's an opportunity, but I mean I don't think that's that big of a market for them. Well, how does that feed into the discussion about cybersecurity and Microsoft's role in securing the enterprise. The number one thing that you know they're doing is adding a lot more security to their co operating system, whether

it's Windows tent or Microsoft Azure. They are investing a lot more money in security than than frankly any of the even pure play companies out there. So with that in mind, what they want to do is if your infrastructure is secured, then whatever endpoint that you use, whether it's a phone or a PC, you know, that should take care of it. So you're also following today and have been for a while on a rug, we're gonna uh this announced merger of the services segment of Hewlett

Hewlett Packard Enterprise and Computer Sciences Corp. What's that about? Well, the thing is basic there. I mean, the the infrastructure outsourcing market is declining, which is what a large portion of what HP Enterprise and IBM and that cat you know, C s C these guys do along with Fijitsu now that industry has been declining, and what cs C c o A has done ever since he came there, he

cut out a lot of costs, improved margins. Investor liked him, and it seems he's going to do the same thing for HPS business, you know, consolidated and then start cutting a lot of the fact I think the biggest feature of this deal, and you know, in my view, is the billion dollar plus savings that they are going to recognize just in the first field, which means you're going

to be a lot of job losses. A lot of data centers been shut down, and it's possible that even the contracts that you know, these companies have the longer term contracts, if they come up for the new wells, if they're not high really profitable, he might just decide not to even bid on them, Anora, Can I just steer you back to Microsoft for just a second and get your thoughts on the Surface and the laptop that

Microsoft is selling. Can we see the day when they just get out of that hardware business entirely, well, at least in the you know, in in both the case of Surface and their particular PC, they want to focus on the higher end market. And it's not because they think they can make a lot of money over there. They want to showcase the power of Windows, the power of all the applications that they have through these devices,

and that's their strategy. They will not compete with the likes of del HP when it comes to you know, the PC market. But I know people who have purchased the Surface and they love it. They love it. They say it's the best device they've ever gotten, and they've had laptops of all kinds. I know a couple of people who use them all kinds of you know, economics, analysis and charts and graphs. They love them. And my wife hases and she loves it too, Anora, thank you

very much for joining us. Sanara Grana is a senior analyst of software and I T services for Bloomberg Intelligence. Of course, Bloomberg Intelligence providing unique and real time research on a variety of industries and all market and government factors that affect business. Our terminal customers can access this function by just typing B I go on the Bloomberg shares a Microsoft up one and a half percent. Right now,

we are broadcasting live from the Bloomberg Breakaway Summit. It's a two day conference bringing together a select group of executives who lead high growth companies. You're listening to taking stock on Bloomberg Radio Broadcasting lives that Bloomberg Breakaway Summit coming up in the next half our Jim Metcalf, he's a chairman, president and CEO of USG Corporation. We're going to find out how a new kind of wallboard helped make that company a lot of money. This is Numberg Radio can