I never understood what's the deal whenever someone says stuff like dead or last chance or whatever. Windows 10 mobile is just getting started. The worse that can happen is restructuring to reduce investments but Microsoft will continue to push with Windows on mobile for as long as they can. Also, restructuring means that since there is a single unified Devices and Operating Systems Group now, all its financials will be seen as such and not as an individual department bringing in the losses. A tactical move to fend off uneasy board members and investors. As long as this group keeps on producing profits overall through whatever, either XBox or Surface line or Windows, they will have a cover to work on loss making stuff like Windows 10 mobile or lumias or whatever.
About penetrating the market, persistence is the key. They did it with XBox line and recently with Surface line and the way they are going with this universal windows under Nadella, they can certainly do it with Windows phones as well. A sound product always trumps the public perception or market trends. And although, I myself don't consider W10 mobile to be a sound product, yet, I honestly believe we are getting there.