In the past Microsoft was content with letting others take on the role of producing hardware while the Redmond company provided the software, like Windows, Windows Mobile, Windows Phone, and so on. However in more recent years, Microsoft has branched out into making its own hardware which spawned the Surface series of tablets and laptops.
While the Surface products have received pretty favorable reviews, they’re not quite taking the world by storm which has led some analysts to believe that Microsoft could exit the Surface hardware business in the next couple of years. Speaking at the 10th Canalys Channels Forum in Venice, Canalys CEO Steve Brazier stated that Microsoft could exit the hardware business as its current CEO, Satya Nadella, is more of a “software guy”.
He adds, “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.” This sentiment seems to be shared by Gianfranco Lanci, corporate president and chief operating officer at Lenovo who stated that he believes Microsoft could pull the plug on its hardware business by 2019.
Lanci was quoted as saying, “It might be earlier. 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. For them it is a very difficult exercise to run hardware products business, they need to be careful about every single detail as the margin on this is so thin.” Whether or not these predictions will come true remains to be seen, but what do you guys think?