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Microsoft's Strong Quarter: 5 Key Facts
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SachinEE
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SachinEE,
User Rank: Ninja
1/30/2014 | 12:46:55 AM
Re : Microsoft's Strong Quarter: 5 Key Facts
@ Thomas Claburn, it is really difficult to predict whether Microsoft will take IBM's path or not because IBM has never been a match for Microsoft in the first place. Secondly, as all these figures in this article show, Microsoft has a lot of money to play with. Low performance in one product can be neutralized by better performance in others which gives Microsoft the leverage to experiment for a much longer time with its new products.
SachinEE
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SachinEE,
User Rank: Ninja
1/30/2014 | 12:46:36 AM
Re : Microsoft's Strong Quarter: 5 Key Facts
@ melgross, you are absolutely right, it becomes really difficult for companies to cope with such situations like keeping the quality high and prices down. But considering that Microsoft is subsidizing its tablets with money earned from other enterprises, it had better introduced Surface tablets at a much lower price to get its tablets some foot in the market. Prices could be adjusted later on when we have produced a fairly considerable consumer base.
rradina
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rradina,
User Rank: Ninja
1/25/2014 | 7:27:12 AM
Re: Surface 2 million + OEM tablets = ????
The entire conversation is a supposition.
melgross
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melgross,
User Rank: Ninja
1/25/2014 | 6:01:10 AM
Re: Is it all bad for Surface?
If, as it seems, the majority of those sales were of the heavily, and money losing, discount ted older models, then it proves very little. A problem Microsoft has here, is no different than what any company has when selling product below production cost. If potential customers now expect those lower prices, and the same quality, then it becomes impossible for the company to ever make a profit on the product in the future. If they lower the quality, then customers will complain. What do they do! This is a very difficult cycle to get out of. People obviously don't think these tablets are worth what Microsoft is charging. That's a basic problem. They can't both be the quality leader in Win 8 tablets, and be the low cost provider.
melgross
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melgross,
User Rank: Ninja
1/25/2014 | 5:54:32 AM
Re: Surface 2 million + OEM tablets = ????
If they included a good keyboard, you mean. I'm sorry, but I've used both keyboards, and neither one qualifies as being good. The type keyboard, the better one, is barely acceptable on a table, and unacceptable on my knees. The combo of the tablet and keyboard doesn't compare to a notebook such as a better quality Ultrabook or Macbook Air.
melgross
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melgross,
User Rank: Ninja
1/25/2014 | 5:49:28 AM
Re: Surface 2 million + OEM tablets = ????
It's quite a stretch to believe that third parties sold 8 million Windows tablets. Where do you get that number from? We don't really know if Microsoft actually sold 2 million Surface tablets—it could have been a lot less.
Gary_EL
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Gary_EL,
User Rank: Ninja
1/24/2014 | 7:10:15 PM
Re: Early "All-In" Bet is paying off.
It's hard to imagine Microsoft doing what IBM did, because Microsoft's beginnings were with the consumer, or maybe it might even be more correct to say with the hobbyist. Maybe Microsoft will decide to exit the hardware business, but I think the consumer is just part of Microsoft's corporate DNA.
Thomas Claburn
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Thomas Claburn,
User Rank: Author
1/24/2014 | 4:30:18 PM
Re: Early "All-In" Bet is paying off.
Does Microsoft have to remain a hybrid consumer-enterprise business or can it take the path of IBM and sell its consumer assets to focus on more lucrative corporate sales?
rradina
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rradina,
User Rank: Ninja
1/24/2014 | 3:14:37 PM
Re: Surface 2 million + OEM tablets = ????
They should have decent margins in their holiday sales.  Wasn't the discontinued RT discount probably covered by the $900M accounting adjustment?  It seems like they have a simple volume problem.  The promotional deal with the NFL must have been expensive given the frequency that Surface logos "surface" during games.  Advertising, building their retail stores and tooling Best Buy probably weren't cheap either.  These costs are the same regardless of whether they sell Surface or iPad volumes.  If they can increase to 3M units/quarter, the strategy might be self-supporting.

Regarding the keyboard -- couldn't agree more!  At least include the touch cover keyboard.  If someone wants the type cover, let them upgrade for a reasonable fee.

I'd also like to see Microsoft engineer an upgradable Surface.  After years of buying upgradable hardware, I'd like to be able to buy an entry-level Surface and then incrementally upgrade it.  

Perhaps I have an out-of-band perspective but when purchasing my current 2 year old laptop, physical dimensions, weight, screen, keyboard, battery and touch pad were far more important than RAM, storage and wireless options.  I knew I could add more RAM, swap out the storage and replace the mini-PCI wireless card.  Over the past two years, I have done all those things.
Michael Endler
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Michael Endler,
User Rank: Author
1/24/2014 | 2:56:37 PM
Re: Early "All-In" Bet is paying off.
Great point, Doug. As much as Ballmer gets slammed for missing mobile, he also oversaw the company as it made aggressive and well-executed moves to become a force in both public and private clouds.
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