Showing 40 posts tagged surface
If at first you don’t succeed…
Charles Arthur explains this well in plain English:
Despite the brave top-line numbers, Microsoft’s Windows business is actually hurting. Surface isn’t contributing much yet, traditional PC sales are sliding, it doesn’t have a tablet competitor yet (though Klein said clearly that it will have a “smaller” competitor – aka a rival to the iPad mini – soon enough), and the only thing really keeping everyone smiling is upgrades from businesses facing the wall of XP’s end of life.
All of this is masking the inevitable.
Though I do have to give props to Microsoft for putting the Surface hardware under the Windows Division. Devices obviously generate far more revenue than software. And even though sales haven’t been great, this is a pretty good bottom-line mask. For now.
Update: From Ian King & Dina Bass’ story for Bloomberg:
Microsoft has sold little more than a million of the Surface RT version and about 400,000 Surface Pros since their debuts, according to three people, who asked not to be named because sales haven’t yet been made public. The company had ordered about 3 million Surface RTs, they said. Brent Thill, an analyst at UBS AG, had initially expected Microsoft to sell 2 million Surface RT devices in the December quarter alone.
Microsoft is taking steps to turn around the tepid demand. The software maker is trying to rejigger its marketing for Surface RT, said two of the people familiar with the company. Microsoft executives have said internally that they failed to persuade some customers to choose Surface over Apple’s iPad or Samsung’s tablets, which run on Google’s Android software, one of the people said.
Marketing. Good luck with that.
Good stuff from Tom Warren for The Verge. This, in particular, sticks out:
The exact timing of Surface development is still a mystery though, and Panay refused to comment whether the iPad was available before work started on Surface. The official timing statement is that the Windows 8 design vision was locked before the iPad and that Apple’s tablet validated a lot of the vision for Microsoft’s new operating system.
The idea totally just came to them out of thin air. I’ll quote Marc Andreessen from a couple months ago:
There’s a pattern in our industry. Apple crystallizes the product and the minute Apple crystallizes it, then everyone knows how to compete.
Steve Ballmer, talking to MIT Technology Review.
Also, read the question — it’s a non-answer.
A lot of gems here. Like:
All new consumer PCs are now Windows 8 based. So in that sense, I would say that here the adoption rate is perfect.
That’s one way to look at it. And:
Oh, I don’t know. Our number one thing is supplying products to consumers. That’s kind of what we do.
So. Many. Quotes.
Now the Microsoft Surfaces make sense. One’s for play and work, while the other… wait.
photo via Jonathan Hoover
So much fail here. I honestly don’t even know where to begin. So I just won’t.
Austin Carr for Fast Company looks back at the project that started as “The Netflix Player” but was eventually spun out into the Roku box/company:
It was December 2007, and the device was just weeks away from launching. Yet after all the years and resources and talent invested in the project (a team of roughly 20 had been working on it around the clock, from ironing out the industrial design and user interface to taking trips to Foxconn to finalize production details), Netflix CEO Reed Hastings was having serious second thoughts. The problem? Hastings realized that if Netflix shipped its own hardware, it would complicate potential partnerships with other hardware makers. “Reed said to me one day, ‘I want to be able to call Steve Jobs and talk to him about putting Netflix on Apple TV,’” recalls one high-level source. “‘But if I’m making my own hardware, Steve’s not going to take my call.’”
In hindsight, good call.
But ultimately, Wood says, “It was totally the right decision. Licensing [digital content] has been hugely successful for Netflix. [The Netflix Player] would’ve created tension with partners, and increasingly decisions would come up where Netflix would have to decide, ‘Should we make decisions based on what’s best for licensing, or what’s best for our own hardware?’”
Sounds eerily similar to the dilemmas that both Google (with Motorola) and Microsoft (with Surface) now face, no?
Whomp! (There it is.)
Horace Dediu, noting that Microsoft’s major problem going forward isn’t necessarily that Windows 8 is a dog, it’s that the entire economic structure of the computing market is changing:
The economics of tablets imply a “commoditization” of system and application software. So what’s Microsoft to do?
The answer is Surface where the software margin is captured in hardware. This explains the pricing of Surface. The price isn’t significantly below what Apple charges because Microsoft wants to capture a comparable (30%+) margin. On a $500 product that amounts to $150. After subtracting hardware operating and distribution costs we can get pretty close to the $120 it currently obtains from a PC.
Detwiler Fenton, a Boston-based brokerage firm, said in a research note today that Microsoft is likely to sell just 500,000 to 600,000 Surface RTs in the December quarter, far below its previous expectation of one million to two million. The reason: Microsoft’s tablet strategy is in “disarray.”
“Lack of distribution is killing the product,” Detwiler Fenton explained. “Mixed reviews and a [$499] starting price tag certainly don’t help, but lack of retail exposure at Best Buy and others is severely depressing sales.”
Yes, I’m sure Surface is a failure because it’s not at Best Buy. It can’t just be because it’s a turd.