That's a very old quote and nowhere does it state that it is just temporary. WinBeta recent speculations point out that W10M will get the features of the Creators Update (night light and custom accent picker) with the "official feature2" update but that's it.
How old is feature2? I thought it was only recent.
Dan, from this site, says his insiders have confirmed that feature2 is temporary. His sources have been right on many things, he seems very confident in it, and personally I trust his word more than speculation that seems to spread like old wives tales. He's hardly overly optimistic about windows 10 mobile either, in its current state, in fact constantly pessimistic and critical, depressingly so, so I wouldn't consider him positively biased.
It's not actually that atypical a thing to do, to split branches like this. They often do it, when they want to delay features, market test them, or practically test them before release. In this case the stated reason was made reasonably clear for the split.
Reading into it, like people are, is a little like reading into a change in the direction of the wind IMO.
I am pretty sure it makes zero logical sense to dump windows 10 mobile, commercially - windows on arm is not a suitable replacement for a smartphone platform - it would require major UI changes, and major battery optimisation and clearly won't be ready in that sense for about two years - I mean its not even ready for release on tablets right now.
MS clearly wants windows to be the one OS that rules them all (what multi-billion OS software maker wouldn't!), and while mobile isn't a winner right now, there is no lost profit, or money, so why beat a retreat?
If they were hemorraging money I'd understand, but that are still making in the millions (yes chump change for them, but people would lose/invest money for the sort of opportunity that could later represent - blackberry spent years burning cash on bb10 just to get a shot, and if your still actually making money however "small", whats the big deal?)
If I were Microsoft, I would see windows 10 mobile as a sort of side project. Not a major cash earner, and not an end goal, yet, but something that pays for its own investment, and could open doors later when the pieces are in place.
The actual install base isn't tiny either. It's something between 1 and 2.5% of around 1-2 billion smartphones (actual install base, the relevant number for software, is harder to estimate than marketshare/sales). Some of those customers being key enterprise users, the sort that MS earns its big money via azure from.
Anyway, it says:
"This is a result of more work we’re doing to converge code into*OneCore*– the heart of Windows across PC, tablet, phone, IoT,*HoloLens, Xbox and more as we continue to develop new improvements for Windows 10 Mobile and our enterprise customers."
If you don't trust MSFTs announcements, why would you trust any newer ones on the topic more?
If you have that much distrust, no statement or announcement will ever be enough.