Post by Melzzzzz
On Sat, 23 Apr 2016 21:52:18 -0700
Post by Marek Novotny Post by Melzzzzz
"Microsoft sold a minuscule 2.3 million Lumia phones last quarter,
down from 8.6 million a year ago. Phone revenue declines will only
"steepen" during the current quarter, chief financial officer Amy
Hood warned during a conference call. That's dragged down
Microsoft's results as a company, too. As the company's mobile
device strategy continues to disintegrate, Microsoft may feel
compelled to push harder on Windows 10 adoption and paid services
to prove it can survive without a viable smartphone. CEO Satya
Nadella's strategy is simple enough: grow Microsoft's revenues by
convincing customers to adopt its paid subscription services."
They've completely lost the mobile market. They could fork Android and
use that coupled with their own software. They have a search engine,
mail, maps, etc. It could be done. I wouldn't be surprised at all,
Problem is that they are loosing revenues real fast. PC sales are not
that great and users are sticking to old versions of Windows. They need
to find strategy to gain cash real fast.
Actually they have all the time in the world. The group Azure belongs
to, which I think it is coupled with server, is a $10 bn business.
Office is still a cash cow. Windows is indeed thinning. Games are doing
modestly. But they still earn at least $2 bn per quarter in profits.
They just reported a few days ago actually. Here we go, they earned $3.8
bn for the quarter. And they have close to $100 bn in cash and short
term. They are doing just fine. Revenue was slightly over $20 bn. That's
40x the revenue of Red Hat just to give perspective. Not a jab on Red
Hat. You get the idea. They can afford to lose $7 bn on Nokia.
The problem the way I see it is that their new hardware business is
maybe on track to do $4 bn annually. While that's a lot of money Apple
is actually much larger for just the computer sales and very much larger
if you count iPads and the Mac combined. Which tells me Microsoft is the
underdog here. Mobile is completely lost. Laptops and surface are
plagued with problem after problem. Just listen to Paul Thurrot and Mary
Joe Folie. The surface book, while a good idea is pricey and full of
Microsoft's problem in a nut shell is they just don't make quality
products. And they don't seem to care about that. They just ship broken
shit and figure they can fix it later. But I have to imagine that's not
a good long-term play. I mean if I pay $2,500 for a Surface Book and the
fucker is plagued with software problems, I'm not exactly going to be
loyal. In order to grow you need loyalty. And I just don't see Microsoft
as a company that can adapt to that kind of business. It's just not in
Their new CEO understands that Microsoft is actually a 14% player in the
overall market of all devices. But I think their revue stream is always
going to be from software and services, not hardware. Frankly, I'm kind
of amazed they do well with software. Windows truly is a piece of shit.
Office is well liked, but I don't know why people feel compelled to
upgrade it all the time. There is no benefit for me at all. And the
company I work for, I promise you if I asked anyone there if they are
using a new feature would say no. They are using Word and Excel exactly
as they always have. They upgrade for the sake of upgrading. They have
no idea at all why they do it. I wonder how long that will continue. But
I've been saying that same thing seriously for more than 10 years. Unless
there is some trigger event that causes a mass exodus, that's not ending
any time soon.
I think one of the real long term dangers is that you have Apple selling
iPads and iPhones for quite some time now. You have Google's Chromebooks
flying off the shelves. That presents a long term problem for Microsoft.
What it means is that over time those users aren't exposed to Microsoft.
They don't buy Windows, they don't upgrade Windows, they don't use
Office and they become used to services from Amazon, Google and Apple.
So when they finally buy a computer, it's likely a Mac or a Chromebook
or not a computer at all. Maybe it's just an Android or iOS phone or
As the older generation ages and drops off, the younger generation
doesn't replace the prior and thus Microsoft starts to gradually lose
customers. It's very important to be strong in education and in business
because it becomes a leading cycle of never ending business. But I'd
opine that Apple and Google have broken that cycle.
Now with so much cash on hand and so much still coming in, they can
reinvent themselves. But I think that's going to be much more difficult.
They have no monopoly on the internet to help them. No one likes their
browser. No one cares about Bing. They got no mobile devices. They are
just not setup for the long term.
I look at someone like Elon Musk and I see he's the future. Here's a guy
that starts from scratch to build a car company. A space company and a
solar company. I feel much the same way about Jeff Bezos. Amazon's AWS
came out of no where and it does so well. Who'd have thought a book
seller would turn into a seller of everything, and startup a space
company, Blue Origin, and an Internet company, AWS? Elon and Jeff are
next wave. Google is likely part of it too. Apple, I'm slightly worried
about because so much of their revue stems from just iOS. If that ever
gets old in the eyes of their customers it will hit them extremely hard.
iPad sales are half what they used to be. Phone sales may have peaked.
So unless they start investing in other ideas they too will have a
All of this seems very normal to me. Out with the old and in with the
new. Both Apple and Microsoft have a lot of time to fix their respective