Analysts Suggest Microsoft Might End Surface Business by 2019
The New Surface Pro may feature some major improvements over the Surface Pro 3, but analysts say that it might be Microsoft's last tablet. At this week's Canalys Channels Forum in Venice, one industry expert suggested that the company's line of Surface products isn't actually that profitable for Microsoft, making it a primary target once the company starts cost-cutting to balance the books.
According to Canalys CEO Steve Brazier, Microsoft might decide to take the Surface off the shelves by 2019 because of its poor performance in the market. "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. 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?' Surface will be the first target," he said, noting that Microsoft CEO Nadella has a strong background in software and cloud computing.
In a separate statement, Lenovo COO Gianfranco Lanci supported Brazier's claim, saying that Microsoft does not have any reason to keep losing money, especially since it is already making a lot of money on Cloud, Windows, and Office. According to him, that is enough reason for the company to lie low when it comes to its Surface business and focus more on its lucrative ventures. He also felt that Microsoft would end its Surface business earlier than Brazier's 2019 prediction.
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The Microsoft Surface has dealt with troubles since its initial launch in 2012. Aside from its premium price tag, many also found its Windows RT operating system less competitive compared to its rivals in the market. Over the years, the line has seen a dip in revenue, taking its toll on Microsoft's overall fiscal performance.
