Well to be more precise, I suppose my position is that if MS want to increase their product userbase, they need a vanguard of advocates who promote their products far and wide. In the early days of Apple's resurgence, this would've been the graphic designers, musicians, developers, and so on. I think that the advocates that have pushed new MS products are, again, developers and graphic designers and so on, who have transitioned to MS over the last 4 or so years due to their new products suiting their needs (digitizer etc).
My own perception is that their haphazard treatment of their product line has tarnished the sentiment in these communities. It's one thing to phase out phones, but to suddenly drop them in the same year as an amazing keynote in which they promoted the Band and Phones as being central to the platform, at the same time that you're pushing OS updates...it's not pleasant when you've bought into that vision.
Phones might not have been worth the cost in an accounting sense, but if they've lost platform advocates then it could affect their good progress.
Like you though, I'm just speculating and would love to know the politics behind it.
I doubt he had much choice. WP can't exist just for the sake of it. Yes they were increasing market share, but at what cost? If you're losing money on each phone sold and if the amount you're losing is linear with each sale because you're effectively buying the sales, selling more is a road to catastrophe. Gaining WP market share would only be worthwhile if there is a path to profitability. I don't know this was the situation for a fact, but it seems likely.
>...treating the product line like commodities without acknowledging the importance of the ecosystem.
Right, so the argument is WP was worth subsidizing because it supports the rest of the ecosystem. But suppose supporting the rest of the ecosystem was better served by integrating it with competitor's products? Hence Office for iOS, etc. At which point WP just becomes a boat anchor round their necks. I don't think there was any possible future in which it was worth the costs.
In your analysis dropping the product was irrational. I don't think it was, but must admit I'm only speculating as to the reasons. I'd love to know the reality.