[German]Microsoft axes its Surface product line, similar to Windows Phone, Microsoft Band or the Groove service, sooner or later? A bunch of PC execs and Canalys CEO say that.
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The Register reports here about the Canalys Channels Forum, held from October 3, to 5, 2017 in Venice (Italy) – see here. The Canalys Channels Forums have long been a trusted source of information, insight and innovation. Attendees will hear from industry leaders in hardware and software, who will explore what needs to be done to meet the challenges of the future and develop business strategies that address the increasing power of technologies now being deployed.
Statements on Canalys Channels Forum
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.
Brazier 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. When the capital expenditure challenge that Satya Nadella has taken Microsoft down becomes visible to Wall Street, everyone will ask him 'Why have you gone to a low margin business?'"
At this point, Microsoft needs to cut it's internal cost. According to Brazier, Microsoft will have a lot of cost-cutting to do, and "Surface will be the first target." Surface RT forces Microsoft to writing down $900 million of stock. Also Microsoft's involvement in PC hardware always appeared to be a point of tension with PC OEMs that were customers – and subsequently also rivals competing against Surface.
Gianfranco Lanci, corporate president and chief operating officer at Lenovo, also commenting on the forecast demise of Surface at the Canalys event. He 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."
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Dell chief commercial officer Marius Haas, agreed that Microsoft will "probably slow it down a bit," in reference to the Microsoft PC. Haas told The Register that it was sensible to use its hardware to "demonstrate the total capability of the [software] platform". According to Hass, Microsoft had never intended to create a "broad based portfolio with a product for every form factor." So it seems that the future for Surface user and fans may be rocky.
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