Panos Panay, corporate vice president of Microsoft's devices group, denies that the company has plans to pull the plug on the Surface line.
During a panel discussion on Monday attended by Business Insider, Panay said that talks of Microsoft shutting down the Surface by 2019 are nothing more than “tabloid rumors,” and are “so far from the truth it’s laughable.”
His comments were in response to reports that industry analysts do not see a future for the Surface past 2019.
Canalys CEO Steve Brazier hosted a panel at the Canalys Channels Forum last week. During the discussion, Brazier predicted that Microsoft would pull production of Surface products by 2019 or sooner. He cited “choppy performance” from a sales standpoint as the primary indicator.
“Overall they are not making money,” Brazier said. “It doesn’t make sense for them to be in this business.”
He insists that the margins are just not there for Microsoft and when they realize that, the Surface will be the first to the chopping block.
Brazier was not alone in his views. Lenovo COO Gianfranco Lanci and Dell CCO Marius Haas agreed that the Surface was a money-losing venture for Microsoft. Barring a sudden sharp boost in market share, Lanci said that he would not be surprised to see an exit before 2019.
"Frankly speaking, it is difficult to see why they should keep losing money."
Not everyone agrees with this assessment. Our own Rob Thubron pointed out that Microsoft is not likely to want to suffer the hit to its hardware reputation, especially after its smartphone failure. With the latest Surface offerings released just last June, a 2019 exit seems too soon.
Furthermore, the Surface is more important to Microsoft than just sales. It is a platform Redmond uses for improving other products as well. The Surface Pen is a good example. Improvements in the software for the stylus have bled into Windows 10 so that now the Pen works better even on PCs from other manufacturers.
A weak quarter here and there is not going to deter Microsoft from producing the Surface. Panay points to the $900 million loss suffered in 2013 with the Surface RT. That was a “short-term setback” that only served to make Microsoft try harder. The company is set in its resolve to keep the Surface on the market and continue to improve it.
Panay reflected, “[Microsoft] is in hardware for the long haul, and Surface isn't going anywhere.”
Surface image courtesy Gordon Mah Ung, PCWorld