I agree with you, I can see that happening but I think they might be continuing the W10M for the next device or what I have come to believe is that W10M is being used to Gap an expanse of time, The current devices including the x3 and Idol 4s are simply stop gaps to get to the windows on Arm thing then quietly discontinued. Unless MS manage to turn things around, I agree that this is MS own making and I think that its the people defending the product on this thread that wont acknowledge the truth. There is so much potential simply slipping through MS's fingers.
The downturn in Windows for Mobile is not the point being defended here. Numbers don't lie, since Windows Phone 8 the downturn started.
The point being missed is Microsoft has a snowball's chance in hell of ever grabbing back what it had for Market share, let alone steal some of the Android/Apple pie, pushing forward with a same old thing way of thinking.
Microsoft has raised the White flag on "Phone", it's one of the reasons why they started putting out Office Apps to Android/Apple. Just make no mistake on the other platforms Office apps are just that "Apps". Not a full feature Suite.
Step back for a second and look at the whole picture, and then start to pull in the information Microsoft has let out. In a way Microsoft has a task ahead almost equal to that of Gates and Balmer way back in the day. Building DOS into Windows, pick away at the mind set in the business world and the consumer market will take notice. They can't make head way in phones......but they can with something that has Phone features.
Windows on Arm is a major key to this, the soon to be Adaptive Shell is another key. Windows RT was in part practice for the Windows on Arm. Just as Continuum to Windows 10 for Mobile is now. Add in the knowledge they gained with Surface Book and how to best sync up a Secondary GPU. Also think if it works for GPU it can be used for CPU
Now take a look at the Newest baby in the Surface line the Surface Studio......A Screen on Roids with sub par hardware in the base. Most look at it and think....." How can that knock off the Mac Pro?" Truth it can't but it was not meant to, it's a dry run for something new.
Take a closer look at it's base, do you not notice just how much it looks like a beefed up Continuum Dock for the Lumia 950/950XL???
The term SKU is going to become important this year, as what ever the Surface Phone will be, it is not going to be just a phone.
Surface Phone ( or what ever they call it ) will be the heart of your daily connected life.
This does not mean Windows on a Phone is going away for good, it's just going to take a new form, with an ability to change into something else based off of want you need it to do.
Hint: A Surface Book that has most of the Motherboard taken away with just battery and a GPU and CPU, who knows maybe a side port the phone slides into, or just connects via USB C. However now none of the chips are x86 but Arm. Battery life for days, plus powerful chips to run full on Windows 10.
Whats to say the phone can't hand off to an Intel i7 type studio device on a desk, with the phone basically acting mainly as the HDD ( not as likely but not imposable, as full Windows 10 runs on my Acer W3 32Gig with still 13 Gig free)
Microsoft said they will be cutting into new ground starting this year, and if Mobile Windows is to see a future it has to play a major part in the new ground.