Microsoft Introduces Three Lumia Phones, ‘Mixed Reality’ Games

Microsoft Corp. introduced three Lumia phones Tuesday, the first indication of the company’s revamped hardware strategy three months after announcing a dramatic scale-back in plans to make its own smartphones.

The Lumia 950 and 950 XL have two antennas to improve signal detection and allows users to glance at the locked screen for information without using battery, Panos Panay, who runs engineering for Microsoft, said at an event in New York introducing Windows 10 devices. Lumia 950, priced at $549 and the XL, at $649, will be available in November. The company also introduced a lower-end Lumia 550 for $139.

The handsets are the first released since Chief Executive Officer Satya Nadella in July said Microsoft would write down almost the entire value of the acquired Nokia handset unit and fire about 7,800 people. Under the new plan, Microsoft will release fewer than 10 phones a year targeted in three categories: business phones, high-end models and value devices. Some analysts have said they are unclear whether the plan represents a retrenchment or the first stage in Microsoft’s complete withdrawal from the smartphone market over time.

“We are looking for clarity and understanding about the role of hardware and Microsoft,” Will Stofega, an analyst at market research firm IDC, said before the introduction of the new products. “Because if there’s any doubt, why would customers commit?”

Narrowing Focus

Microsoft describes the new hardware plan as focusing not on selling as many phones as possible, but on a narrower set of scenarios in which it thinks it can win over customers. It’s a similar play to what Nadella has executed with the Surface devices, which now have reduced ambitions for market share, but greater success in generating profit. The Surface currently generates more than $3.5 billion in revenue for the company a year, Terry Myerson, Microsoft’s vice president of Windows and devices, said at the event.

Microsoft also introduced its “mixed reality” games project in a HoloLens demonstration that uses holographic weapons. The company said it would deliver a development kit for the device to Windows 10 developers in the first quarter, priced at $3,000.