Surface Phone Buzz Builds as Lumia Brand Fades

Microsoft reportedly is getting ready to pull the plug on the Lumia brand by year's end, making room for the rumored Surface Phone.

Microsoft Surface Phone

Time is ticking away on the Lumia brand of smartphones, a lingering reminder of Microsoft's ill-fated acquisition of Nokia's Devices and Services business.

The Redmond, Wash., software giant is getting ready to retire the Lumia brand in December, effectively spelling the end of smartphones that sport the brand, according to a report in WinBeta, citing information gleaned from an anonymous insider. The report also indicates that Lumia handsets are no longer prominently placed in Microsoft's physical retail locations. Online, the U.S. store's home page no longer features a direct link to the Lumia line of products although they can still be found by navigating the site or with a quick search.

Meanwhile, on Sept. 7, Microsoft software engineer Laura Janet Butler, further stoked Surface Phone rumors with a pair of since-deleted tweets obliquely mentioning the unconfirmed hardware. In December, Microsoft Chief Marketing Officer Chris Capossela strongly hinted that his company is taking inspiration from its Surface line of tablets for its upcoming smartphones.

The Surface Phone may make its debut in the coming months if Microsoft stages another hardware event this fall.

Last October, the company held an Apple-style media briefing in New York City for a series of device announcements, including the surprise unveiling of the company's first laptop, the two-in-one Surface Book. Microsoft also used the event to showcase its Surface Pro 4 tablet and upgraded Band wearable. This year, the company is rumored to be readying a Surface all-in-one PC.

Bidding farewell to the Lumia brand could help the company further distance itself from the setbacks suffered due to its purchase of Nokia.

Microsoft acquired Nokia's handset unit for $7 billion in 2014. Instead of turning Windows Phone into a mobile powerhouse the likes of Android and Apple iOS, the buyout turned into a financial drain on Microsoft.

Last year, the company announced it had taken a $7.5 billion write-down related to the acquisition. In May, Microsoft said it was laying off 1,850 employees working in its smartphone hardware business, mostly from Microsoft Mobile Oy in Finland, formerly a Nokia facility, atop previous layoffs that claimed 18,000 mobile phone workers in 2014 and about 7,800 employees in July 2015.

Since the deal, the smartphone market has remained consistently cool to Microsoft's attempts to sway buyers.

Windows Mobile is a distant third in the smartphone OS race. In the second quarter, sales of Windows-based smartphones totaled just 1.97 million units, earning the company a minuscule 0.6-percent share of the market, according to Gartner. In the second quarter of 2015, nearly 8.2 million Windows handsets were sold, accounting for 2.5 percent of the market, Gartner said.

Android is the mobile OS to beat, with sales of nearly 297 million smartphones in the second quarter of 2016 and an 86.2-percent share of the market. In its latest quarter, Apple sold more than 44 million iPhones for a 12.9 percent share.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...