Microsoft News: Distribution Issues “Killing” Surface & Ballmer’s Nightmare

According to  of AllThingsD, “Microsoft is being coy about revealing Surface sales data, it may be for good reason. Early demand for the company’s first tablet is lousy,” writes  of AllThingsD. “How lousy? Put it this way — if Microsoft really did manufacture three million to five million Surface tablets to sell in the fourth quarter, it’s going to have between two million and four million left over at quarter’s end.”

Paczkowski was commenting on a research note released by Detwiler Fenton, a Boston-based brokerage firm. According to Detwiler Fenton, “Lack of distribution is killing the product. Mixed reviews and a $599 starting price tag certainly don’t help, but lack of retail exposure at Best Buy and others is severely depressing sales.”

Microsoft Surface is only available for purchase from Microsoft Stores. Surely Microsoft would have been aware of this, it makes you wonder why the high expectations.
In other news…

Jay Yarow of BusinessInsider , outlined how “Steve Ballmer’s Nightmare Is Coming True.” He highlighted the iPad assault on PC sales and Office lost of relevance in the Post PC era as sure signs.

From the article:

[quote] 1. The iPad eats the consumer PC market.
This is happening right now. In the third quarter of 2012, PC sales were down 8 percent on a year-over-year basis worldwide. In the U.S., sales were down 14 percent. A big chunk of the decline can be attributed to the rise of the iPad. Apple sold 14 million iPads last quarter, which is more than the top PC maker, Lenovo, which shipped 13.7 million PCs. Throw in Apple’s 4.9 million Macs, and it’s the top computer maker by a mile.
2. Employees gradually switch away from using Windows PCs for work.

This trend has not played out that dramatically in 2012. However, British bank Barclays bought 8,500 iPads at employees’ insistence this year.

… As more people get comfortable with Apple’s mobile products at work, Microsoft will have to worry about them converting their Windows-based computers to Macs at work, too.

3. Windows 8 fails to stop the iPad.

Gulp. It’s still early, but every most data points say Windows 8 is not going to make a dent in the iPad.
Meanwhile, we can’t think of any analyst who has cut his or her iPad estimate for the quarter based on Surface sales. In Microsoft’s defense, it says it sold 40 million licenses, which it says is out pacing Windows 7. There’s a chance analysts are wrong.

4. Loyal developers start to leave the Microsoft platform.

We’re not sure if this happening or not. So far, the early signs are actually positive for Microsoft. It has over 20,000 apps in its Windows app store. Windows 8 is only a month old. At the same time, Microsoft doesn’t have a Facebook app for the Surface, and one of the biggest complaints from reviewers was the lack of good apps for Windows 8.

5. Windows Phone gets no traction despite the Nokia deal and RIM’s collapse.

This has happened. Despite everything Microsoft has tried in mobile for the last two years, consumers aren’t buying it. The latest data from IDC says Microsoft has 2 percent of the global mobile market share. And the latest phone from Nokia is thick and heavy compared to phones from Apple and Samsung. We don’t expect it to be a blockbuster.

6. Office loses relevance.

Microsoft’s Office has been a juggernaut. In fiscal 2012, the Microsoft business division did ~$24 billion in sales.

…The death of Office, has not happened, though. Despite Google’s attempt to create Docs, companies aren’t giving up on Excel.

7. Microsoft’s other business applications start to erode.

If Windows continues to fade, and if Office starts to fade, then corporations have less reason to adopt Microsoft technologies on the back end like Exchange Server for email, SharePoint Server for collaboration, Lync for videoconferencing and real-time communication, and Dynamics for CRM and accounting.

8. The platform business collapses.

For the last decade, Microsoft’s fastest growing business segment has been Server & Tools, which did $7.4 billion in sales last year.

9. The Xbox was never going to make up the slack, and Microsoft can no longer afford to keep investing in it.

In a year of relative gloom, Microsoft’s Xbox has become a big bright spot for the company. Kinect is great technology, people are still buying the console, and it’s been a great entry point for Microsoft to take over the living room. But, for a company like Microsoft, Xbox isn’t enough.

10. Microsoft suffers a huge quarterly loss. Ballmer retires to play golf.

Let’s not kid ourselves — it’s going to take a sudden, unexpected disaster at Microsoft to get Ballmer out of the company.[/quote]

Posted by | Posted at December 5, 2012 19:39 | Tags: , , , , , , , , , , , , , ,
Storm is a technology enthusiast, who resides in the UK. He enjoys reading and writing about technology.

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