With Lumia Dead, Is Surface Next On The Hit List For Microsoft

Microsoft's financial report last week told us that it was no longer in the smartphone business - revenue from smartphone sales were so close to zero to confirm it has effectively liquidated its remaining stock. 

This is a one way street, the likelihood of the mythical Surface Phone ever arriving is also so close to zero as to confirm it isn't happening. Given Microsoft's treatment of phone customer over the last decade who is going to put their trust in them again?

It may not be the last of Microsoft's hardware business culls either. The absence of updates to the Surface line, added to the increasing quality and price competitiveness of machines from other Windows OEMs suggests Microsoft may no longer be keen to play in this space either.

The Surface Pro 4 is now more than eighteen months old and has fallen behind newer machines from HP, Lenovo and even Acer. There's no sign of an update incoming and in its earnings call Microsoft suggested no turnaround in the next quarter - effectively killing hopes of a new Surface Pro until Q3.

So is Microsoft just running out Surface Pro 4 stock too? Having done its job of shaping the market will the Surface Pro line follow the Surface into oblivion?

Tomorrow's Microsoft education themed event might give us a big clue. The introduction of a Windows Cloud SKU aimed at fighting off Chromebooks sounds like the sort of event that won't be full of rip-roaring revelations.

The question of note it whether Microsoft introduces its own hardware to showcase the new offering or focuses on hardware from one of its partners. I'm leaning towards it being the latter, probably with Acer or HP filling the partner role. 

If Microsoft is to continue building hardware I expect it to be in the premium sector, where designs like the Surface Book and Surface Studio allow it to steal sales and mind share from Apple. The Surface Pro 4 no longer occupies that premium (or highly profitable) niche and so I think it may be the last of its line.

0 comments: