A week ago a variety of OEMs and respected analysts predicted the end of Microsoft’s Surface experiment is near, with Gianfranco Lanci, corporate president and chief operating officer at Lenovo saying:
“Microsoft is making a lot of money on cloud, making a lot of money on Windows and Office, but losing a lot of money on devices. And frankly speaking, it is difficult to see why they should keep losing money. For them it is a very difficult exercise to run hardware products business, they need to be careful about every single detail as the margin on this is so thin.”
Panos Panay, Microsoft’s corporate vice president of devices was not gracious in response, calling the idea “so far from the truth,” it was the “tabloid rumour of the week.”
Business Insiders note that the Surface business was low margin, and had falling sales and revenue, but Panay insisted that it was about more than sales, saying improvements Microsoft has made to the Surface devices have often led to similar improvements across the entire PC market. For example, as Microsoft has improved the speed and accuracy of its stylus, Surface Pen, that code has made its way back into Windows 10, improving the experience of using a stylus on PCs from other manufacturers.
He noted that previous Surface setbacks, such as writing off $900 million in Surface RT hardware in 2013 did not make Microsoft back of then – it just made them try harder, and Panay said:
“There was no loss of confidence. There was a real belief in how we can change the world.”
After Joe Belfiore’s statements from the weekend, however, we are reminded of Microsoft’s 2016 statement to companies about their phone business, which read:
I want to assure you that your investment in Windows phones is not at risk. The mobility of the Windows 10 experience remains core to our More Personal Computing ambition. We will continue to support and update the Lumia devices that are currently in the market, and the development of Windows 10 phones by OEMs, such as HP, Acer, Alcatel, VAIO, and Trinity; as well as develop great new devices. We’ll continue to adapt Windows 10 for small screens. We’ll continue to invest in key areas – security, management, and Continuum capabilities – that we know are important to commercial accounts and to consumers who want greater productivity. And we’ll help drive demand for Lumia devices.
The release of an uninspiring Surface Laptop and minimally upgraded Surface Pro 2017, however, does not inspire confidence in Microsoft’s investment in their Surface business, and for me personally, I will let actions speak louder than Panay’s words.
Source: Business Insider