Industry execs say Microsoft is better off without Surface

Oct 5, 2017 05:57 GMT  ·  By

Microsoft’s Surface models are pretty successful products despite the premium price, and even though the company has shown that it’s very keen on expanding this lineup with more devices, industry experts believe the company is better off without hardware in the long term.

The software giant has already abandoned the Band activity tracker and is likely to give up on phones as well, even though a confirmation in this regard is not yet available, and now the next product to get the ax is likely to be the Surface.

This is what a group of executives and analysts forecast, pointing to Microsoft’s culture as the main reason. Microsoft is first and foremost a software company, and Gianfranco Lanci, corporate president and chief operating officer at Lenovo, was quoted as saying that by 2019 the Redmond-based firm is likely to say goodbye to devices.

“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,” Lanci was quoted as saying.

“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.”

Microsoft out of devices by 2019

Dell chief commercial officer Marius Haas doesn’t go as far as a total demise of the Surface, but says that Microsoft is likely to reduce focus on devices, pointing out that most likely the company had never intended to create a product for every form factor.

And last but not least, CEO of analyst company Canalys is also pointing to a dark future for the Surface lineup, adding that Satya Nadella himself is the type of CEO that’ll focus less on hardware given his experience in software and cloud. The inconsistent sales performance of the Surface portfolio could make this model “the first target” when it comes to cost-cutting, he says.

“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,” he concluded.

Microsoft doesn’t typically comment on such forecasts, but previously the company offered absolutely no hint of a potential Surface demise, reiterating its commitment to the lineup on nearly every occasion.