Analyst and execs say Microsoft might kill off the Surface line by 2019

midian182

TechSpot Editor
Staff member

With its new Pixelbook 2-in-1, it appears as if Google is trying to take on Microsoft and its laptop-tablet hybrid, the Surface Pro. But several big names within the industry think the Windows maker will drop its Surface lineup by 2019, if not sooner.

At the Canalys Channels Forum, CEO of analyst company Canalys, Steve Brazier, said that Microsoft boss Satya Nadella is a “software guy, a cloud guy,” and that the Surface hardware will go the same way as the Microsoft Band and its smartphones.

“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,” said Brazier, as reported by The Register.

“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?'"

Brazier claimed that when it comes time for Microsoft to cut costs and boost its profit margins, “Surface will be the first target.”

Some of Microsoft’s OEM partners agreed with Brazier’s claims. Lenovo COO Gianfranco Lanci believes the Surface line could be nixed before 2019. “It might be earlier [than 2019]. 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” he told Brazier on stage.

Dell’s chief commercial officer Marius Haas agreed with the predictions, saying that Microsoft will “probably slow down a bit” when it came to Surface products.

In its last reported quarter, Microsoft’s More Personal Computing segment saw its revenue drop 2 percent to $8.9 billion, a decline it attributed to lower phone revenues and the fact it sold significantly fewer Surface devices than the previous quarter, where they saw a 26 percent YoY decline.

In reality, though, it’s hard to imagine Microsoft calling time on the Surface line within the next two years, especially as it only launched the new Surface Laptop and Surface Pro a few months ago. And after what happened with its smartphone business, the company is unlikely to want its hardware reputation to take another hit — something that could negatively affect it in the long term.

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Teko03

TS Evangelist
Only Microsoft die-hards wept when Lumia & the Band was killed off, but Surface & XBOX are the two hardware products that should continue on at Microsoft in my opinion....but who cares about my opinion?
 
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ikesmasher

TS Evangelist
They continue to half-bake marketing and pushing the surface lines.
Especially at university - the apple presence vs surface is laughable.

ultimately surface pro is too expensive, surface laptop doesnt differentiate itself, and surface book is just wierdly designed. All of them have driver issues here and there. And I havent even seen the surface studio anywhere.

oh and also, after you use it for a brief while, you realize that the 2-in-1 format with the kickstand is cumbersome and annoying.
 

Kibaruk

TechSpot Paladin
Only Microsoft die-hards wept when Lumia...
The Lumia phones were really good hardware based, the problem was the system never lifted off as Android and iOS had a huge chunk of the market already.
The Chrome OS 2 in 1 is nothing that could "kill" the Surface, some people will complain about this but... it's not a real PC, sorry guys, it will be as much competition as the "iPad Pro" against the Surface. Yeah, end users will probably drool over them, but it's not really a replacement to a good ol' computer, which Surface is and hits the sweet spot over portability and power.

Ok, I have a Surface, it's not heaven on earth nor I'm a tryhard fan, I want to see more alternatives from other brands that can hit the sweetspot, but let's be honest, nor Apple nor Google will bring it the way they have been carrying themselves.
 
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senketsu

Interesting how a low margin profit becomes losing money
they can do what they want with it, reallocate resources as they please, but please don't tell me you are losing money when you are making a profit (to be fair it was the Lenovo COO that said it)
 
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Skidmarksdeluxe

TS Evangelist
MS should accurately know how profitable their Surface line is even if the published figures flatter to deceive. If the profits aren't to their liking, then killing off the line makes sense. Loyal, die hard fans of Surface line don't count for a thing and their tears are to be ignored. Profitability is everything.
 

Kibaruk

TechSpot Paladin
Interesting how a low margin profit becomes losing money
they can do what they want with it, reallocate resources as they please, but please don't tell me you are losing money when you are making a profit (to be fair it was the Lenovo COO that said it)
Well... if you were the owner of a company, would you be looking at margin profit or do you want to make a killer profit? Barely making it is not something appealing for the board, nor the investors, and certainly not for the owners of the company.
 

TomSEA

TechSpot Chancellor
Makes you wonder how much money they dumped into the NFL to get them to use Surface's. You see their logo all over the place, plus the quarterbacks and offensive coordinators use them to review plays. Can't imagine that was very cheap.

My experience with the Surface is a "meh." Does some things well, other things not so well. There are better laptops out there for the money.
 
S

senketsu

Interesting how a low margin profit becomes losing money
they can do what they want with it, reallocate resources as they please, but please don't tell me you are losing money when you are making a profit (to be fair it was the Lenovo COO that said it)
Well... if you were the owner of a company, would you be looking at margin profit or do you want to make a killer profit? Barely making it is not something appealing for the board, nor the investors, and certainly not for the owners of the company.
but notice you said margin profit while the Lenovo COO said losing money, that's all I'm trying to point out..I agree with the rest of your post
 

Adam Leite

TS Rookie
I don't understand some comment. Maybe written by Apple users. The Surface is the best, most creative, most innovative laptop/tablet you can find on the market. Very fast, reliable, and extremely eclectic machine. Only a fool would go for the Samsung line - which starts great and then gets sluggish over time and without ANY updates. They simply abandon the buyers. Google does the same with whatever they put out in the market: they abandon the project and screw everyone who bought their products. Google should stay with software.
 

Theinsanegamer

TS Evangelist
The surface pros dont offer enough for the money, and have reliability issues.

Same with the surface book.
Interesting how a low margin profit becomes losing money
they can do what they want with it, reallocate resources as they please, but please don't tell me you are losing money when you are making a profit (to be fair it was the Lenovo COO that said it)
Well... if you were the owner of a company, would you be looking at margin profit or do you want to make a killer profit? Barely making it is not something appealing for the board, nor the investors, and certainly not for the owners of the company.
I wouldnt kill something because it doesnt make ENOUGH profit, thats for sure.

Some profit is better then no profit.
 

amstech

IT Overlord
I don't understand some comment. Maybe written by Apple users. The Surface is the best, most creative, most innovative laptop/tablet you can find on the market.
.
It is?
What about the other dozen convertible and hybrid laptops that offer the same thing for less money?

Very fast, reliable, and extremely eclectic machine.
So is the competition.

Only a fool would go for the Samsung line - which starts great and then gets sluggish over time
Like every Windows operating systems ever made?
I've owned an S4, S5, now an S6, I also have a HP Slate 4200 Plus and Samsung Galaxy S 10.5" tablet, I've used them for years and have experienced very little to no slow down.

Windows on the other hand....


and without ANY updates.
They simply abandon the buyers. Google does the same with whatever they put out in the market: they abandon the project and screw everyone who bought their products.
All of my Samsung devices get regular updates, I just had another one on my S6 a few days ago.
Before that about 2 weeks.
In the year I've had it its had quite a lot of updates, both OS and system.


Google should stay with software.
And Microsoft should stop asking a premium for the same crap everyone else has simply because their logo is on it. The Surface has been, overall, a flop. It almost got canned a few years ago when no one was buying it. No one bought Microsoft's crappy phones, no one bought their crappy Windows 8 OS, no one pays for more their logo anymore and no one wants anything to do with Microsoft other then work. They have been running on reputation, thank god for Windows 7 and the ad-riddled spyware Windows 10 they forced onto users.

Not trying to jump on Microsoft, its still a formidable company, buts its different now... they force things because they need to, not cause they want to... their ability to sell things on reputation alone has expired. Bye bye Surface.
 
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