Stick to What You Know, Acer Founder Tells Microsoft

CommanderFrank

CommanderFrank

Cat Can't Scratch It
Joined
May 9, 2000
Messages
75,399
Microsoft is still receiving negative comments from companies around the globe for the software centric company producing proprietary hardware to showcase its new Operating System. The latest to let Microsoft know exactly what‘s thought of the move on Microsoft’s part is Acer founder Stan Shih.

"I think Microsoft's getting involved in the hardware business is designed to promote its Win8 [operating system]. But I sincerely recommend they withdraw from the hardware market when they get what they want"
Click to expand...
 
In other words step off or the industry will step off. If Microsoft is after the tablet industry, they'll have to compete with Android and iOS. For hardware manufacturers this is a very bold move since Android and iOS have no real added cost with the OS license. They're feeling a lot of pressure with Microsoft decision.

On the other hand Microsoft is doing the right thing. Nobody is really interested in doing innovative designs to compete with Apple, and by them making a tablet will put them in line with Android and iOS products. Still a very risky and bold move on their end. Probably one that won't pay off.
 
What's wrong with making a Windows version of the Nexus series?

Did the Nexus ruin S3 and OneX sales?
 
The Acer founder is scared because of the number of people who have clearly state they want the Surface and won't bother looking at other tablets. I know I have.
 
What is Stan Shih so afraid of? Is he so concerned about Microsoft losing its shirt in the hardware business or is he afraid of competing with superior hardware?
 
dagamer34 said:
The Acer founder is scared because of the number of people who have clearly state they want the Surface and won't bother looking at other tablets. I know I have.
Click to expand...

This is true. Acer is the current champion of cheap when it comes to price versus specifications (note, NOT price versus quality - that's an altogether different discussion :p) and Microsoft entering the market removes licensing costs from their hardware since they probably won't be billing themselves for the price of the OS. That means potentially better quality at a potentially lower price point. Of course that is going to be a concern for Acer and other hardware vendors.
 
I think Microsoft is only making its own hardware to pump up excitement for Windows 8. Microsoft has done this in the past with other products.

99% of the people who like the Microsoft Surface like the hardware and could give a fuck less about Windows 8.

I don't forsee Microsoft entering the hardware scene, only developing niche products from time to time.
 
Most OEMs, like Acer, have been producing utter crap for years. That's why Apple has gained traction and Microsoft lost face in recent years.

Acer needs to step off or start making decent gear.
 
leeleatherwood said:
99% of the people who like the Microsoft Surface like the hardware and could give a fuck less about Windows 8.
Click to expand...

I'm in the other 1%....tablets are meh, Windows 8 is like the most exciting orgasm to ever come squirting out from inside Microsoft.
 
SkribbelKat said:
This is true. Acer is the current champion of cheap when it comes to price versus specifications (note, NOT price versus quality - that's an altogether different discussion :p)
Click to expand...

No, price versus specifications champion is MSI - aka put everything possible in that laptop chasis. Does it overheats ? Not their problem. :D
 
Maybe Acer needs to get their collective heads out of their asses and step off with a tablet to take advantage of 8 rather than whining about M$ doing it. For fuck's sake, if there was a product ready to leverage it already in the windows camp they wouldn't need to be the ones doing the innovating.
 
faugusztin said:
No, price versus specifications champion is MSI - aka put everything possible in that laptop chasis. Does it overheats ? Not their problem. :D
Click to expand...

I haven't got any personal experience with MSI, but I did have an Acer Aspire 3680 with what seemed like heat problems a few years ago. I haven't really purchased a new computer since the gloss craze started though...even though its over, I'm still off the market mostly.
 
bbqrooster said:
What is Stan Shih so afraid of? Is he so concerned about Microsoft losing its shirt in the hardware business or is he afraid of competing with superior hardware?
Click to expand...

They already make only a couple of percent of profit due to the current market. The last they need is someone entering who basically can afford to make hardware at break even or even a loss because they'll make it up from the software license.
 
leeleatherwood said:
I think Microsoft is only making its own hardware to pump up excitement for Windows 8. Microsoft has done this in the past with other products.

99% of the people who like the Microsoft Surface like the hardware and could give a fuck less about Windows 8.

I don't forsee Microsoft entering the hardware scene, only developing niche products from time to time.
Click to expand...

That's what I'm thinking. It does make sense given the lack of enthusiasm for Windows 8 thus far. The success of Windows 8 is very important in order for them to get a foot in the door of the mobile/table business.

I think it is a good move, the other ODM companies needed a little push.
 
Hay Acer. Its called an open market. Here is an idea. Do something innovative, instead of dumping bare minimum crap on the market. Maybe you might get a few more sales? Apple doesent sell as many tablets by being the cheapest ones on the block! Maybe then MS wouldn't need to do your job for you!

I honestly think MS is just tired of the constant stream of cookie cutter hardware products with lack of imagination or innovation constantly streaming from the manufacturers like Dell, HP and Sony. All MS is doing with Surface is lighting a fire under there asses to make them compete with innovation, and not always bu scraping the bottom of the bargain bin bucket.

When was the last time any of us truly saw an innovative Windows device? Its not MS's fault, but they sure as hell get blamed for it.
 
It's not just Acer, though, Dell and HP have said much the same. When your two biggest OEMs who sell your software tell you that you dun' fucked up then you dun' fucked up.

It boils down to licensing. Unlike Android which is free or iOS which is also technically free, Microsoft only sells software (for the most part). This means that whatever device the OEMs make that's comparable to the Surface will always be more expensive than the Surface because they have to pay the licensing fee (which is actually quite high, $80+). This means that if you want to compete with Microsoft's product you need to skimp on hardware or decrease your margins and it's likely they'll have to do both.

I understand Microsoft wants to control the hardware implementation and drive forward some innovative and creative designs. That's commendable. What isn't smart is that Microsoft makes most of its money through these companies. Unlike Apple who also controls the hardware and software (even glues the fucking crap on so you can't touch it), Microsoft doesn't sell itself. MS relies on OEMs to sell its product (software).

Now if Microsoft decided that it wants to do both hardware and software then fine, but if you do that you've got to be able to sell yourself like Apple and not rely on others to do it.
 
No innovation in PC world?

The Air is 0.8 thick? In 2008 it was announced as the thinnest the world has ever seen, right?

Take a journey back in time to 2002. A full 6 YEARS before Steve Jobs released the Air. The Sharp PC-UM20 was 0.65 thick.
6 YEARS before the Air.

You can't tell me innovation doesn't happen. Apple just takes other people's ideas, polishes them up and sells them. They've done it with virtually every product they've ever released.
Apple has something that nobody else has: marketing.
 
pelo said:
It boils down to licensing. Unlike Android which is free or iOS which is also technically free, Microsoft only sells software (for the most part). This means that whatever device the OEMs make that's comparable to the Surface will always be more expensive than the Surface because they have to pay the licensing fee (which is actually quite high, $80+). This means that if you want to compete with Microsoft's product you need to skimp on hardware or decrease your margins and it's likely they'll have to do both.
Click to expand...
Not quite true, because while Microsoft collects $80 from Acer on hardware they stick Windows onto, they collect $0 when they stick Windows onto something. Their license sales go down. It's not exactly that they are getting it "free"- they still have to pay engineers to develop and test it.
 
Epicness said:
Not quite true, because while Microsoft collects $80 from Acer on hardware they stick Windows onto, they collect $0 when they stick Windows onto something. Their license sales go down. It's not exactly that they are getting it "free"- they still have to pay engineers to develop and test it.
Click to expand...

It's also a fee that Microsoft doesn't have to pay. They aren't going to charge themselves an OEM licensing fee...

The point Acer, HP and Dell have made is that Microsoft's Surface, under equal footing with OEM's win8 tablet products, will always be cheaper. The margins on such devices are already incredibly slim and that $80 is a whole lot of dough that they can't use because it stuffs Microsoft's pockets.

It's not a sound strategy from Microsoft. They should have taken a page out of Intel's business guidebook with respect to the Ultrabook. Intel doesn't build Ultrabooks but rather has a certain guideline and hardware requirements that meet ultrabook standards -- less than 1" thick, mSATA SSD cache, 7 hours battery life and ULV processor. Microsoft's Surface would be akin to Intel selling their processors for Ultrabooks and then turning around and making Ultrabooks as well. Of course this will piss off OEMs because you're making money on both sides here and you're always going to have the cheaper product.
 
pelo said:
It's also a fee that Microsoft doesn't have to pay. They aren't going to charge themselves an OEM licensing fee...
Click to expand...
It's not a "fee"... It's a profit that they miss out on when they build their own.

Maybe you haven't spent much time in large corporate accounting environments, but Microsoft will still be "paying" for that license, allocating money from one department to another for these licenses, otherwise it looks like a loss of profit in that division: shareholders don't like to see that.

Yes, in the end it's all the same money... But when you talk about billion-dollar companies, their accounting methods are not the same as yours at home.
 
Epicness said:
Not quite true, because while Microsoft collects $80 from Acer on hardware they stick Windows onto, they collect $0 when they stick Windows onto something. Their license sales go down. It's not exactly that they are getting it "free"- they still have to pay engineers to develop and test it.
Click to expand...

The problem is that companies like Acer will also have to do their own testing and fine tuning as well. Acer could very well jump onto Android, which has a much larger app store market, and they can even include their own app store, much like the Kindle.

When Microsoft sells a tablet, they don't have to deal with license cost, even though they developed the OS. OEMs will still buy it and Microsoft will still make a fortune from it. Not to forget that Windows 8 will earn them 30% share of sold apps from the market.

Android is totally free, and Google doesn't collect a share from the sold apps on the market. On the cell phone market that's usually goes to the carrier, but I know the Kindle and other such products have their own market. So in a sense going Android is a lot better then going Windows 8 for hardware manufacturers.
 
Epicness said:
It's not a "fee"... It's a profit that they miss out on when they build their own.

Maybe you haven't spent much time in large corporate accounting environments, but Microsoft will still be "paying" for that license, allocating money from one department to another for these licenses, otherwise it looks like a loss of profit in that division: shareholders don't like to see that.

Yes, in the end it's all the same money... But when you talk about billion-dollar companies, their accounting methods are not the same as yours at home.
Click to expand...

No, it's not the same. The margins are far slimmer for the OS and because you're now getting margins off the entire device and not just the software it's going to be cheaper.

Now if that weren't enough, the licensing fee for win8 is actually higher than win7 and by a large amount. Licensing fees for win7 were only ~$30 whereas now it's $80+ because they're forcing a slimmed down version of office with every OEM license meaning they stuff their pockets off the OS + the application + the hardware.

Are you sure I'm the one who doesn't understand this?
 
Ashbringer said:
The problem is that companies like Acer will also have to do their own testing and fine tuning as well.
Click to expand...
Microsoft is still buying hardware from the same Chineese sweatshops everyone else is, and will have to do the same testing.

Ashbringer said:
When Microsoft sells a tablet, they don't have to deal with license cost
Click to expand...
They won't have to pay for the development, engineering, testing, and upkeep of Windows? News to me... Microsoft still has a cost associated with putting Windows even on their own device.


Ashbringer said:
Android is totally free, and Google doesn't collect a share from the sold apps on the market.
Click to expand...
Yep, that's because Google pushes those devices into their services which is what generates them lots of money. Microsoft doesn't have that ability. Microsoft isn't Google. Google can make money with online services, Microsoft really doesn't. People are still going to use Google search on Windows. Microsoft cannot recoup their costs there: Google can.
You're fundamentally misunderstanding both business models.
Google can care less about making money on Android. They don't. They make money from search.
It's the opposite with Microsoft. Microsoft DOES make their money from the OS. That's how they make money.
You just misunderstand how each company makes money, it's not the same business model at all.

pelo said:
No, it's not the same. The margins are far slimmer for the OS and because you're now getting margins off the entire device and not just the software it's going to be cheaper.
Click to expand...
Well, obviously... Microsoft doesn't have to make a profit on selling licenses to themselves. I've never said that they wouldn't. So while when they sell to Acer, they are selling at a profit, they're just charging themselves actual cost to produce that license. Now, the difference is they can't just break-even or they're not making profit. So Microsoft MUST make money on either the hardware, OR they will put their eggs in the basket of making money through the Marketplace.
 
pelo said:
It's not just Acer, though, Dell and HP have said much the same. When your two biggest OEMs who sell your software tell you that you dun' fucked up then you dun' fucked up.
Click to expand...

So what. It is not like Acer, Dell, HP, Lenovo and the rest of the bunch have many options.

Let's imagine they will get so pissed off on MS, that they will stop adding OEM Windows on their computers. What are their options :
1) Linux (Ubuntu, SUSE, Red Hat) - we shouldn't kid ourself, this would result in people asking for Windows.
2) OpenSolaris - even less chance than Linux.
3) ReactOS - maybe in 2-3 decades when it will leave alpha.

And that is it. Those are pretty much all the alternatives we got. OS X is a no-go because of Apple licencing.

In short, MS can do hardware, and what can manufacturers do ? Step in the line and shut up. They have zero bargaining position against MS. Even if they would stop bundling any OS with their computers, MS could just push OEM Windows through the retailers/distributors.
 
faugusztin said:
So what. It is not like Acer, Dell, HP, Lenovo and the rest of the bunch have many options.

Let's imagine they will get so pissed off on MS, that they will stop adding OEM Windows on their computers. What are their options :
1) Linux (Ubuntu, SUSE, Red Hat) - we shouldn't kid ourself, this would result in people asking for Windows.
2) OpenSolaris - even less chance than Linux.
3) ReactOS - maybe in 2-3 decades when it will leave alpha.

And that is it. Those are pretty much all the alternatives we got. OS X is a no-go because of Apple licencing.

In short, MS can do hardware, and what can manufacturers do ? Step in the line and shut up. They have zero bargaining position against MS. Even if they would stop bundling any OS with their computers, MS could just push OEM Windows through the retailers/distributors.
Click to expand...

That only holds true for the desktop. Metro, win8 and the Surface tablet are all going into mobile where it's Unix that dominates -- whether Linux or iOS. While Windows may be the big dog on the desktop, it's the poodle in the mobile segment.
 
You are right, but only partially. Non-Apple tablet manufacturers got 3 options :
1) ARM + Android - very hard to compete in this area now, because of Nexus 7 and Kindle Fire. Even the best tablets shouldn't cross the $300 price now, or they will end up as impossible to sell.
2) ARM + Windows 8 - again, you have to compete with Android and iPad. iPad for now can ask higher price for now, simply because they are the "standard" everyone else compares to. Because they are the newcomer on the market, they will have to price accordingly, that means they will have to target $300 price limit for Windows RT tablets too, otherwise people will choose Android tablets instead. I don't see this as realistical option, Windows RT tablets at higher than $300 price range will sell only in very limited quantities. Note: i personally consider Windows RT to be dead at birth, exactly because of pricing issues every manufacturer will face. Sub-300$ price means no margin on product, over-300$ price means limited sales. MS can sell Surface even at loss, because they will get their money back from the Market. Other manufacturers can't.
3) x86 + Windows 8 - here the manufacturers have no option but to use Windows 8.

So as i said, they have zero bargaining position against MS.
 
Translation: setting a high bar frightens us and may prevent us from shipping mediocre crap like we're used to.

It wasn't until Intel made the ultrabook(tm) push that we saw decent laptops that could compete with Apple.

This is no different.
 
I would love to be able to buy clean bloatfree MS made laptops and tablets.

Apple have made a reputation of "works out of the box" due to them issuing the hardware and software at source to their specifications and testing.

MS have had to put up with penny pinching clowns like Acer etc. screwing up time after time with shoddy cheap hardware and crappy bloatware screwing it all up.

Not a good advert for your OS that you spent much time and effort getting right.

After all, how many crappy Dell/Acer/Asus/HP/Lenovo/Toshiba/Fujitsu builds have we all seen that just crawl and BSOD all the time? Then how well do they perform when you just wipe them and install Windows and a few known quality apps? The difference is night and day.
 
Epicness said:
It's not a "fee"... It's a profit that they miss out on when they build their own.

Maybe you haven't spent much time in large corporate accounting environments, but Microsoft will still be "paying" for that license, allocating money from one department to another for these licenses, otherwise it looks like a loss of profit in that division: shareholders don't like to see that.

Yes, in the end it's all the same money... But when you talk about billion-dollar companies, their accounting methods are not the same as yours at home.
Click to expand...

^^ This. Happens more than you would think. Departments billing other internal departments. They are like city-states fighting for their own survival.
 
I laugh at some of these posts.

What MS is doing is called Market Penetration, they are going to run a huge loss on their tablets thats a guarantee. Its the same as XBOX they are pushing their stuff so people adapt get hooked to services. Problem is Windows 8 is not getting a warm welcome so far. Their prices are going to be outragous compared to market alternatives.

I laugh even harder when Americans say oh yeah we will buy from MS for 800 dollars because it will be quality. Thats the biggest load of horse shit I have ever heard. American are Walmart-oholics cheapest nation of people on earth.Americans will buy the cheapest shit possible, don't be blaming HP/DELL/ACER for making cheap products because Americans and a large portion of this world will buy the cheapest shit and that becomes a self feeding cheap shit cycle. Also please keep in mind that MICROSOFT has no reputation in the hardware business and people have a generally neutral and negative things to say about Microsoft unlike Apple. Just like Microsoft routers/mice/joysticks these ventures have all failed miserably, Microsoft has no hardware engineering and their tablets most likely will not differ very much from other OEM's most likely it will be a rebranded OEM.

Also lets look at track record of Microsoft in the Mobile sector.

Everything that Microsoft touches in the mobile sector eventually goes tits up. The only company that hasn't is Nokia, but its coming for them too. I have not seen a single Nokia Winmo cell in the hands of any of the customers and users that I service (about 750+).
 
dagamer34 said:
The Acer founder is scared because of the number of people who have clearly state they want the Surface and won't bother looking at other tablets. I know I have.
Click to expand...
You're saying that you won't even consider other unannounced tablets?
 
faugusztin said:
Even if they would stop bundling any OS with their computers, MS could just push OEM Windows through the retailers/distributors.
Click to expand...
And even if they did that, people wouldn't want to install Windows themselves and would pressure OEMs into including it again anyway.

Love it or hate it, it's the only option when you're the only real player in the business.

"Switch to Mac" yeah, whatever... Most people won't want to put up money for that. Just for a general user, you're talking about buying a whole new license of MSO for Mac. These are the $200 items that most people forget to figure in when they switch ecosystems.

faugusztin said:
You are right, but only partially. Non-Apple tablet manufacturers got 3 options :
1) ARM + Android -
2) ARM + Windows 8
Click to expand...
True. In the "cut back OS" market, Windows might struggle. The only real competitor here is Android. iOS isn't selling like Android was, and now that OEMs are producing good Android tablets, IMO the tablet trend will follow what the phone trend does. Apple will still push stuff, but Android will envelope the market.

daglesj said:
I would love to be able to buy clean bloatfree MS made laptops and tablets.
Click to expand...
You can...
http://signature.microsoft.com/
Microsoft even devotes engineers into testing these signature systems to make sure all the drivers, etc work OK. These are "ready to go" machines.
 
bbqrooster said:
What is Stan Shih so afraid of? Is he so concerned about Microsoft losing its shirt in the hardware business or is he afraid of competing with superior hardware?
Click to expand...

I think the hardware manufacturers have a genuine concern. It's all a delicate balancing act. Acer/Dell/HP need to make money off a laptop/tablet sale, but they also have to pay licence fees to MS, so the profit is split between MS and the hardware manufacturer. The hardware manufacturers need good relations with MS, because they need their hardware to have Windows since it's the most comment consumer OS, and MS needs good relations with the hardware manufacturers to licence out it's OS so that it can get millions of Windows sales (most of which are OEM).

The OEMs aren't necessarily concerned about MS producing "superior hardware" than they can, more so they're worried MS are gonna muscle them out because MS doesn't have to pay licencing fees for their own software.

If Acer makes a $500 laptop, sells it for $600 and then pays MS $50 licencing, then MS make $50 off an Acer laptop sale and Acer is making $50. If MS still want to make that $50, they can cut Acer out of the picture, make the $500 laptop themselves, and sell it for $550.

There must be a tenuous relationship between these companies. In some ways MS have the OEMs by the balls and in others the OEM have MS by the balls. I'm sure MS have some agreements saying the OEMs can use Windows for X dollars per copy, but in return have to promote Windows on their laptops more than other OS's. MS need OEMs to be supporting them to get the sort of Windows sales they want and I'm sure OEMs will feel like they got the shit covered end of the stick if MS start making hardware and expect OEMs to still use and promote Windows.

Especially since Linux is increasingly an option for consumer level machines, it pays for MS to not piss off the OEMs by trying to muscle them out of the tablet market.
 
Acer needs to step up their game, thats all.
 
faugusztin said:
1) Linux (Ubuntu, SUSE, Red Hat) - we shouldn't kid ourself, this would result in people asking for Windows.
Click to expand...
With desktops and laptops yes, but we're talking about tablets here where Android is a big alternative. Android is a free OS that manufacturers can collect 30% of the app store sales, where they can't do either with Windows 8.

Microsoft is leaving behind the desktop+laptop market, which would result is a hole that needs to be filled. One could argue that Windows 8 will still have a strong market, but how long will that last? Especially with big name companies like Valve who decided to support Linux. I think people overlook the threat this brings to Microsoft to keep a substantial amount of the desktop+laptop OS market.
 
pelo said:
That only holds true for the desktop. Metro, win8 and the Surface tablet are all going into mobile where it's Unix that dominates -- whether Linux or iOS. While Windows may be the big dog on the desktop, it's the poodle in the mobile segment.
Click to expand...

What exactly is your idea of mobile? Microsoft owns the mobile segment by a large margin. Or are you simply pretending laptops are not mobile?
 
Im fairly certain this is making Dell/Acer/HP crap their pants because people will notice a free of bloatware and cleaner machine for little more money with less of a head ache.

I understand bloatware is keeping these OEMs in the buisiness but jeesus they need to hire better programmers, most of their programs barely even work, Im suprised they get any type of money for this crap software. I can guarantee you that if any of this stuff worked marginally well for the consumer they most likely would pay for the past-trial membership.

So get off your asses, stop worrying about MS coming into the business and making better products than you and step up your production value.
 
Ashbringer said:
With desktops and laptops yes, but we're talking about tablets here where Android is a big alternative. Android is a free OS that manufacturers can collect 30% of the app store sales, where they can't do either with Windows 8.
Click to expand...

1) as i said above, in ARM area i consider Windows RT to be dead at birth. Android tablets are converging to sub-$300 pricing and there is simply no way MS could do that with their partners.
2) in x86 tablet area Windows 8 is not going to have any opposition. The only x86 Android device is the Intel reference phone sold as XOLO X900 or Orange San Diego, and that one is still running Android 2.3.
3) manufacturers can get 30% of app store sales only and only if they open their own app store with that price cut. Manufacturers get exactly 0% from the Android Market. Manufacturers get exactly 0% from the Amazon Appstore. That is why Nexus 7 or Kindle Fire is so dangerous to the big manufacturers - because Google and Amazon can sell the tablet at no margin or at minor loss, and get their money back through the content sales (apps, music, video, books), where they take 30% cut. Manufacturers get absolutely nothing from the content sales, and that means they have to get their profit at the time they sell you the device.
 
Maybe if Acer stopped making crap hardware, Microsoft wouldn't need to do this.
 
You must log in or register to reply here.
Back
Top