2019: The Year That Microsoft Quits Surface Hardware

Megalith

Megalith

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PC execs claim that Microsoft will quit its loss-making Surface hardware business by 2019: talking at the tenth Canalys Channels Forum in Venice, Canalys CEO Steve Brazier said Microsoft CEO Satya Nadella would exit the product line because he is a “software guy, a cloud guy” and pointed to the demise of the smartphone line. He added: “The Surface performance is choppy; there are good quarters and bad quarters, overall they are not making money. It doesn’t make sense for them to be in this business."

Gianfranco Lanci, corporate president and chief operating officer at Lenovo, said he believed Microsoft may pull the plug on its PC hardware unit before 2019. “It might be earlier,” he told Brazier on stage. “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.”
 
The cloud has become shit because the hosting companies haven't upgraded with their demand so performance has tanked, and ISPs aren't upgrading fast enough to keep up with streaming video so as a result individual connections have slowed down too, which of course makes cloud transfers slower. Can't say it's a good time to focus harder on the cloud, with net neutrality dying Microsoft will have to pay a pretty penny to Comcast, Verizon, etc. to have their services any better than dial up.
 
Wow. I actually expected the Surface line to become more and more core to what Microsoft offers.

Microsoft is just going to become another IBM...A massive services company that makes improvements to it's bottom line in 2 ways: Offshoring and employee reduction. At this point they will have failed with almost every new avenue of business: Surface Hardware, Phone OS, Windows RT, Nokia...
 
So, the CEO of a company that directly competes with the Surface line says they should exit it. I think I need more than a shaker of salt for this one. Surface hardware has managed to push everyone else to make their own 2-in-1 products better, and sell more new copies of windows. Seems like a win to me.

arnemetis said:
The cloud has become shit because the hosting companies haven't upgraded with their demand so performance has tanked, and ISPs aren't upgrading fast enough to keep up with streaming video so as a result individual connections have slowed down too, which of course makes cloud transfers slower. Can't say it's a good time to focus harder on the cloud, with net neutrality dying Microsoft will have to pay a pretty penny to Comcast, Verizon, etc. to have their services any better than dial up.
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Microsoft is a solid #2 in the cloud and most of it isn't selling to consumers, it's selling to other businesses and governments. Crappy ISPs don't impact that segment much at all.
 
darrpara said:
Wow. I actually expected the Surface line to become more and more core to what Microsoft offers.

Microsoft is just going to become another IBM...A massive services company that makes improvements to it's bottom line in 2 ways: Offshoring and employee reduction. At this point they will have failed with almost every new avenue of business: Surface Hardware, Phone OS, Windows RT, Nokia...
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... Windows 8, Windows 8.1, Windows 10...
just thought your list should be moar complete.
 
aliaskary77 said:
i would love to get a surface pro, but not at the prices they are at.
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Nor a glued shut impossible to service shit. Plus failure rate seemed high statistics i looked .. each of those failures is people that say fuck it last time I get one of those... I know im one of those... Surface RT what a piece of shit, died 2 times in warranty, second time didn't even bother... I just not going to buy any surface shit, and thats it.
 
darrpara said:
Wow. I actually expected the Surface line to become more and more core to what Microsoft offers.

Microsoft is just going to become another IBM...A massive services company that makes improvements to it's bottom line in 2 ways: Offshoring and employee reduction. At this point they will have failed with almost every new avenue of business: Surface Hardware, Phone OS, Windows RT, Nokia...
Click to expand...

Cloud sucks soooo bad, IBMs quote to move to cloud was so absurd that one of the managers pushing that route said "There's no way I'm presenting this" and that was just for proof of concept! Along with claiming it was an SaS model where they would take my job but conveniently left out pricing and SLAs for it because they are about 250 USD/hr and would skirt the question whenever asked.

Azure is garbage, non stop issues with sharepoint, they patch at will and just break any sort of customizations done along with abysmal performance, getting my OneNote to sync across multiple systems is soooo slow

Uvaman2 said:
Nor a glued shut impossible to service shit. Plus failure rate seemed high statistics i looked .. each of those failures is people that say fuck it last time I get one of those... I know im one of those... Surface RT what a piece of shit, died 2 times in warranty, second time didn't even bother... I just not going to buy any surface shit, and thats it.
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Costco, pay $99 3 year warranty with 1 time complete coverage in event of an accident.




How the hell are they not making money on the surface, it was friggin $1900 CAD at costco with the $100 warranty and thankfully a bundle saving me on KB and Stylus; the stylus is $130 and KB is $160 so how are those not making money either.. It's a friggin i5 with 256GB SSD so it's not like it's a premium performance machine, i5s are such garbage and intel should be selling them dirt cheap to clear out inventory with Ryzen just stomping them left and right. Where on earth is the crazy expensive piece, screen would maybe be several hundred if that.
 
I love my surface pro 2, the problem is I don't see a reason to upgrade from it anytime soon. As a tablet and mobile work station it does everything my old laptop did faster and better.

New pros haven't given me any reason to upgrade though. But as a device I thought ms put out a quality product here. Hope this is just tumor.
 
azuza001 said:
I love my surface pro 2, the problem is I don't see a reason to upgrade from it anytime soon. As a tablet and mobile work station it does everything my old laptop did faster and better.

New pros haven't given me any reason to upgrade though. But as a device I thought ms put out a quality product here. Hope this is just tumor.
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Lovin the SP4 at work as well, a lot of users have moved over to just that instead of a desktop/laptop. What I’m worried about is the Studio, it just came out! Best screen I’ve seen on an aio, the tilt is amazing and its plenty fast. Whats going to happen to it?
 
Monkey God said:
Very happy with SP3Pro. Glad MS entered this space.
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I agree. My SP3 Pro is still going strong. I wish it would die so I could get a new Surface but the thing just keeps on trucking. It hasn't even slowed down. The only problem I've had is that Wifi stopped working for a week and a half but a software update fixed it.
 
Also, too early to call this "fake news" but I am seeing conflicting reports as to whether or not this is true. It sounds like an analyst said they thought this might happen but there is no confirmation from anyone at MS.
 
As a deployment team lead about to start a Win10/O365/OneDrive deployment for an international energy company that is *also* a total end user hardware migration to Surface Pro 4 devices (complete with 2 1440p monitors, dock, and Surface keyboard and mouse for each and every user) and will contain when complete just shy of ten thousand systems, M$ is only starting to see the benefit of getting into this space.

The division results and device throughput are finally starting to accelerate rapidly. It would be the height of folly to ever quit this.

So, let's instead realize that this whole standpoint is the voice of one outsider who's just speculating wildly.
 
Currently love my SP3! I was planning on upgrading to a Cannonlake version when it came out. Hopefully ...
 
This guy is full of shit. The surface line supplanted everything but iPhones in my office. And given the choice everyone would pick one over the shitty Lenovos
 
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I don't buy it, everybody here loves their SP's and I am yet to see anything from Lenovo, HP, or Dell that rivals it. Are they problem free no, but they are damned good.
 
hope this aint true. on a surface pro 4 here, like it alot. was waiting on the next surface pro release
 
Uvaman2 said:
Nor a glued shut impossible to service shit. Plus failure rate seemed high statistics i looked .. each of those failures is people that say fuck it last time I get one of those... I know im one of those... Surface RT what a piece of shit, died 2 times in warranty, second time didn't even bother... I just not going to buy any surface shit, and thats it.
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Personally, I view glued shut and impossible to service as a bonus to expensive portable hardware.

Yes, you cannot service it, but that also means that someone who steals it will have to go through hoops just to get it into a condition that can be offloaded. (i.e. factory reset).
That makes it less desirable.

Also, Surface RT? I can't believe people bought into that deadend.
 
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I just have to laugh at the reaction of some people to this "news". These are comments from competitors who have been on the dying vine until Microsoft showed them how to make 2-in-1 laptops and tablets. Now that the category is going good they want to sow FUD and get Microsoft out of the market because of what - low margin. If that's the case, why wouldn't they get out of the market as well. After all, they are not getting high margin, correct? Besides, these people have no idea what's going on inside Microsoft's Surface division. Otherwise, they wouldn't be surprised when Microsoft came out with the Surface laptop. Yeah, if Microsoft has this problem they talked about, why would Microsoft come out with the Surface laptop. Yes, a laptop that I prefer over the offerings from these companies.
 
darrpara said:
Wow. I actually expected the Surface line to become more and more core to what Microsoft offers.

Microsoft is just going to become another IBM...A massive services company that makes improvements to it's bottom line in 2 ways: Offshoring and employee reduction. At this point they will have failed with almost every new avenue of business: Surface Hardware, Phone OS, Windows RT, Nokia...
Click to expand...
MS is already a services company. They just also have other segments.

But their services are where their bulk profit comes from, much like HP who specializes in bulk hardware sales and then sells their services on top of it.
 
The problem is that when MS brought out all the Surface products the other manufacturers got a much needed kick up the creative design ass. All those complaints from the likes of Acer etc. where not about MS trampling on their territory, it was the fact they would have to finally up their design game after treading water for 15 years. MS was making them all look boring and shabby.

Since Surface we've had a lot more interesting designs from the likes of HP/Asus etc.

Now we'll just go back to crappy black ABS plastic slabs from Toshiba/Acer etc. loaded up with bloat and crapware.

It would be nice if MS just stayed in the game with a clean looking no nonsense laptop at least.
 
Microsoft should diversify it's Surface lineup.

Have a few "Home" or "Play" models that are more lower budget friendly ($300-$800) targeting the consumer segment. Choice of full Win10 Home or Pro. Pentium to i5.

Have a few "Work" or Office" models that are midrange budget ($800-$1200), targeting the business segment. Choice of full Win10 Enterprise or Pro. i3 to i7.

Continue with their "Pro" lineup ($1200+), targeting all segments, but with a distinct focus on the enterprise and power user segments. Choice of any version of full Win10. i5 to i7.

...all models will have the same available accessories such as Bluetooth kbam, docking stations, chassis-mount extended secondary battery pack, etc. And make them compatible with at least the next generation or two of Surface models as an incentive for those that upgrade their Surface hardware more frequently.
 
The real shame is that it's not MS that wants the hardware to end.

It's Wall Street wanting their way.

Wall Street will only be happy when a corporation manages to create a way for it to make $10 billion a year pure shareholder profit with zero operating costs of any kind.
 
MavericK said:
Also, too early to call this "fake news" but I am seeing conflicting reports as to whether or not this is true. It sounds like an analyst said they thought this might happen but there is no confirmation from anyone at MS.
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Reminds me of the analyst a few months ago who's story was posted here that predicted that the iPhone SE was dead, and Apple would not make any new ones. Then just a few weeks later Apple announced they would be producing a new version of the SE!
 
MV75 said:
It gets to be broken across all platforms. Win!
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I LOATHE the Xbox one interface.

It is absolute shit, compared to the Xbox 360 menus.

I don't want my console to look like a computer. Otherwise I'd use my actual computer!

It cripples an otherwise solid piece of hardware.
 
what's the reason for Microsoft quitting Surface hardware? For the price, they must be making $. Is there a quality problem?
 
Happy Hopping said:
what's the reason for Microsoft quitting Surface hardware? For the price, they must be making $. Is there a quality problem?
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Why do you think they stopped? Maybe they don’t have much new hardware to incorporate to introduce a refresh?
 
Happy Hopping said:
what's the reason for Microsoft quitting Surface hardware? For the price, they must be making $. Is there a quality problem?
Click to expand...

There is a lot more to making a profit on hardware then simple... sell price - costs of part.

Product has to be designed.
Product has to be supported with software.
Product has to be warrantied.
Product needs to be packaged.
Product needs to be shipped.
Product needs to be sold to distribution. (not everyone buys direct)
Product needs to be marketed. (ads don't buy themselves... and MS gave $400 million to the NHL alone for a 5 year ad deal, which interestingly ends in 2019)

Still this is pretty much a necro thread.. I'm not convinced MS is planning to end their misguided attempt to compete with their own OEMs. They have been willing to loose millions on the xbox for years... so even if they aren't turning an overall profit on the Surface line. The numbers are hidden now in their reporting methods that group hardware looses with software profits. The surface line only gets the boot if software sales slow to the point of making it hard to hide losses.
 
ChadD said:
I'm not convinced MS is planning to end their misguided attempt to compete with their own OEMs.
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It's more of a cooperation/competition model. Part of the point of the Surface line was to help give guidance and inspiration in PC form factors. All the major OEMs have copied the Surface Pro for instance. To date no OEM has much copied the Surface Book though, there aren't a lot of detachable screen 2 in 1s as it's a tough design to execute. So there Microsoft takes the risk and the hit on something very unique than maybe OEMs don't really want to get into until the tech has evolved.
 
I said it earlier, but I'll say it again. I'm seeing lots and lots of corporate/enterprise investment in this platform. M$ is selling the shit out of it. My organization has spent over 4 million on Surface crap in the past year, with more each year as sustainment costs. The Surfaces themselves, sure, but also pens, BT kb and mouse sets, type covers, etc. etc. etc.

They are going to realize a profit, and they will continue to create a platform that allows them to showcase Win10 "as it was meant to be".
 
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