Right now, Microsoft's phone division is kind of wild west city with all the different handsets they have to improve and maintain. What I think they want to do is concentrate on a few phones that serve its goal of one Microsoft and Windows everywhere. That means they have to get lean.
Most people don't talk about how Nadella wasn't on board with the purchase of Nokia. That decision was made by Balmer and now that Nadella is top dog, he's only doing what he think makes sense beginning with cutting all that fat from in and around the phone division so they can concentrate on its mobile goals. It doesn't include Nokia but will grease the skids for developers on other platforms.
This move is NO DIFFERENT than the moves Steve Jobs made when he came back to Apple. He cut off a lot of contracts right off the bat. He said "NOBODY is building Macs but Apple". The VIP's and their managers that had these relationships with PC makers who were making lots of bread building their own kingdoms on the back of Apple got the contents of their desks handed to them in a cardboard box outside of HR. He then fired a ton of people that resisted his leadership and grew Apple into the company it is today.
At least in the near term, this we know, there will be Windows Phones. new ones, flagships that run rings around its competitors. Flagships that will offer flexibility, finesse, power, storage and quality. At least this is how I read things. Gizmodo, BGR, and the rest are looking to make enough to pay down the debt from lawsuits from bloggers they owe money to. And google is writing mad checks for anyone that will tarnish Microsoft. They want death of a thousand cuts. So here they come and its just getting started. In the grand scheme, they make no contribution to Microsoft, Apple or anyone else.