Investors want Microsoft to kill Surface
- Thread starter Tekn0
- Start date
I doubt that would happen, but if it does, I'd be really-really pissed.
The difference between Google and Microsoft is that there are many other companies that makes phones and tablets with Android on. On the other hand, as far as I know Nokia is the only major player who makes Windows phones.
Xbox may not make much money itself, but it makes revenue in other ways, already described a few posts ago.
At the end of the day, Microsoft kills products not doing well (revenue/profit wise) and continues products that are doing well. What influence investors (even major) have is on how long to stick with an unsuccessful product before dropping the axe. I bought my SP2 with the expectation that by the time MS decides to kill it that something a lot better and cheaper will be out.
If MS drops the Surface tomorrow, support is unlikely to cease for at least a year and absolutely nothing would change in terms of the hardware: your Surface/Surface Pro will still work the same as it does now whether MS pulls the plug or not.
If MS drops the Surface tomorrow, support is unlikely to cease for at least a year and absolutely nothing would change in terms of the hardware: your Surface/Surface Pro will still work the same as it does now whether MS pulls the plug or not.
macmee
Active Member
Philtastic
Active Member
Actually, XBox is a) such a small part of Microsoft and b) it's debatable whether it has generated any net profit for the company mostly because of how poorly the original XBox did compared to how much money was sunk into it. To put this quickly into perspective, for fiscal year 2013, Microsoft made $16.2 billion operating income (an approximation of profit) from their Business division (Microsoft Investor Relations - Microsoft Business Division Performance and KPIs - see 2nd chart on right) while the Entertainment & Devices division only made $0.8 billion (Microsoft Investor Relations - Entertainment and Devices Division Performance and KPIs - 2nd chart on right). The Entertainment & Devices division includes XBox, Surface, and Windows Phones, coincidentally segments that most analysts see them jumping out of since they say that Microsoft should focus on its bread & butter.
You might say that that's because of XBox One R&D and launch. The lacklustre performance of the Entertainment division was even present in the middle of the XBox 360. For example, in 2009, Entertainment div made $0.2 billion whereas Business was $12.1 billion, grossly dwarfing the Entertainment business (2009 FY from Microsoft's site as above).
Indeed, the XBox brings in revenue but operating income takes into account the costs associated with generating that revenue. In short, it's debatable whether XBox has generated all that much profit for Microsoft, especially considering the ~$6 billion that was sunk into the original XBox. At the very least, XBox has a very bad ROI which is why there is pressure for them to drop it to focus on Windows and business services. This investor advice is actually for Microsoft's long-term benefit so that they will perform even better in their big business and fend off encroaching competition, such as from Apple and Google (OS, productivity software, and cloud services) and maybe even Linux if Steamboxes actually take off.
These comments also relate to the Surface as well since it's part of the same division. Doubling a small number is still a small number. I would argue that keeping Surface is still a good thing even if not a big business because it gives them some foothold in the tablet business which will possibly protect them from loss of Windows revenue if/when people all move over to tablets instead of laptops. Their experience here helps them prepare for this potential future.
XBox, however, has nothing to do with their major money generators, thus the calls for them to axe the system.
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The problem with the Enterprise-focus strategy is that in neglects the consumer market influence and the influence of the tech-savy youth who would be completely alienated from Microsoft products.
Just as a comparative, bare with me for a minute:
There are numerous reasons why RIM has fallen so hard over the past decade but remember when Blackberry was the ever powerful smartphone every company needed for its secure email service? Governments and business loved it for the security and connectivity and those who used it were beholden to the functionality of the keyboard and how well integrated the software was (such as the Calendar, contact list, email etc.) Before the company fell into a quagmire of mismanagement, production delays and untimely service outages it felt enormous pressure from the rising iPhone. Kids bought Apple's phone because it was the next cool thing extending from the iPod line and their parents saw the new apps and tools and thought "all my blackberry has is push email and an aging product line". Eventually those parents, who worked at companies supplying blackberries, started carrying two phones and looked for ways to integrate the iPhone into the corporate IT infrastructure... leading to the Bring Your Own Device practice. Surely the dagger to RIM's heart. Apps superseded the utility of the BB keyboard, bbm and accelerated RIM's charge to irrelevance.
All this to point out that Enterprise is susceptible to the influence of the consumer market. Any tech company that is as mature as Microsoft, and which has it's resources, MUST look to a balanced approach to product development. One sphere merges into another through the evolution of a device and through the generational change in a company's workforce. (Those same kids who bought the first iPod are now executives or decision makers in companies, you think Apple's products aren't following them in?)
Apple's success, in my view is (aside from their obvious strength at design) that their products provide a platform that encompasses a consumers entire .. for lack of a better phrase...daily cycle. Desktops for home, laptops for travel, iPhone/iPad for mobility and limited (very limited) productivity at work and abroad all connected by compatible OS's that seamlessly integrate all the devices. Anything someone wants to do, Apple is there.. want to watch the boob tube? Apple TV. Make a call? IPhone. Write a report? MacBook... RIM only had the mobility and its functionality stopped at email. I remember how long it took to consolidate my BB contact list with Outlook, or worse, copying a video to the phone for playback while in transit! OMG what a nightmare. Half hour episodic took 45 minutes to transfer sometimes!!! RIM was on its way to extend its influence with the introduction of its tablet (Which was a pretty awesome machine at the time in my opinion, just app bare and released a year too early) but that's as far as it could go. RIM didn't have an OS or hardware for home desktops/laptops. MSFT is in a far better position than RIM ever was, no real need to build laptops/desktops, their software are already in the home and office. Surface however is the bridge that can connect all windows based platforms to achieve what apple has. The surface and the pro are to me the most exciting products MSFT has released ever because while the surface can be improved to erode iPad market share, the surface pro line is a statement that says "There is nothing apple has that compares". MSFT still has a long way to go but I think they are well on their way to being very competitive in the consumer space. Just need to flex that 'innovation and creativity' muscle once in a while.
Just this guy's humble opinion.
Just as a comparative, bare with me for a minute:
There are numerous reasons why RIM has fallen so hard over the past decade but remember when Blackberry was the ever powerful smartphone every company needed for its secure email service? Governments and business loved it for the security and connectivity and those who used it were beholden to the functionality of the keyboard and how well integrated the software was (such as the Calendar, contact list, email etc.) Before the company fell into a quagmire of mismanagement, production delays and untimely service outages it felt enormous pressure from the rising iPhone. Kids bought Apple's phone because it was the next cool thing extending from the iPod line and their parents saw the new apps and tools and thought "all my blackberry has is push email and an aging product line". Eventually those parents, who worked at companies supplying blackberries, started carrying two phones and looked for ways to integrate the iPhone into the corporate IT infrastructure... leading to the Bring Your Own Device practice. Surely the dagger to RIM's heart. Apps superseded the utility of the BB keyboard, bbm and accelerated RIM's charge to irrelevance.
All this to point out that Enterprise is susceptible to the influence of the consumer market. Any tech company that is as mature as Microsoft, and which has it's resources, MUST look to a balanced approach to product development. One sphere merges into another through the evolution of a device and through the generational change in a company's workforce. (Those same kids who bought the first iPod are now executives or decision makers in companies, you think Apple's products aren't following them in?)
Apple's success, in my view is (aside from their obvious strength at design) that their products provide a platform that encompasses a consumers entire .. for lack of a better phrase...daily cycle. Desktops for home, laptops for travel, iPhone/iPad for mobility and limited (very limited) productivity at work and abroad all connected by compatible OS's that seamlessly integrate all the devices. Anything someone wants to do, Apple is there.. want to watch the boob tube? Apple TV. Make a call? IPhone. Write a report? MacBook... RIM only had the mobility and its functionality stopped at email. I remember how long it took to consolidate my BB contact list with Outlook, or worse, copying a video to the phone for playback while in transit! OMG what a nightmare. Half hour episodic took 45 minutes to transfer sometimes!!! RIM was on its way to extend its influence with the introduction of its tablet (Which was a pretty awesome machine at the time in my opinion, just app bare and released a year too early) but that's as far as it could go. RIM didn't have an OS or hardware for home desktops/laptops. MSFT is in a far better position than RIM ever was, no real need to build laptops/desktops, their software are already in the home and office. Surface however is the bridge that can connect all windows based platforms to achieve what apple has. The surface and the pro are to me the most exciting products MSFT has released ever because while the surface can be improved to erode iPad market share, the surface pro line is a statement that says "There is nothing apple has that compares". MSFT still has a long way to go but I think they are well on their way to being very competitive in the consumer space. Just need to flex that 'innovation and creativity' muscle once in a while.
Just this guy's humble opinion.
stranger4all
Member
100% true ! , its the brand name that one takes from young age and ends up using in his professional life , if it wasnt for windows 95-7 , i wouldnt have bought the SP2 , this is truely a machine that dares the competition to come up with something like it , its the fist time MSFT has shown that they can design something a beautiful as apple and make sure it has the same old ease that its users have used since long !
CrippsCorner
Well-Known Member
I can't find the article I previously read but a quick bit of Googling brought up this...
Microsoft Earns $2 Billion A Year From Android: Is It Time To Drop Xbox? - Forbes
If I come across the more in depth article about their losses I'll post up the link!
The other issue for Microsoft, the biggest trend in Enterprise IT is "Bring your own Device" (BYOD) also know as the Consumerization of IT, if MS abandons the Consumer Market they will loose the Enterprise Space. What is interesting about this, I'm starting to see small to Mid-size businesses purchasing Xbox Ones as Tele-conferencing devices (Plugging a Miracast/WiDi adapter in the HDMI Pass Through) and using Skype Premium for VOIP. Its a pretty slick combo and a whole heck of lot less expensive then a Cisco Tele-presence device (By around $119,000 USD).
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