Tag: Surface RT

Microsoft's Ballmer says he's going to retire

The CEO of Microsoft – Steve Ballmer – is going to step down as the chief executive of Microsoft within the next 12 months, the company said today.

Shares of Microsoft (MSFT) stock rose on the news.

Microsoft has created a special committee to find a successor to Ballmer. Microsoft founder Bill Gates will sit on that committee. The company will consider both outsiders and insiders as successors.

In a statement, Ballmer said Microsoft needed a CEO who would be around long term as the firm changes to a devices and services company.

Wall Street has wanted Ballmer to go for some time.  Rather like Intel, Microsoft has missed the boat on the move to smartphones and tablets.  Its own attempt to make money on the Surface RT tablet went disastrously wrong, forcing the Voe to take a close to $1 billion charge last month.

Sales of Windows 8 are also in the doldrums as competitors and former partners see Android platforms as a better bet.

Microsoft misses expectations, shares slide

Software giant Microsoft posted its quarterly earnings late Thursday and the numbers were far short of what Wall Street was expecting.  

Wall Street was hoping for earnings of 75 cents per share, but in the end Microsoft reported 66 cents. It was not all bad news, as revenue rose 10 percent to hit $19.9 billion, but even that was short of the Street’s expectations, as analysts were hoping for a figure north of $20 billion.

Net income was $4.97 billion. Sales of Microsoft Office were good, but the result of weak PC sales was still evident. Windows sales were $4.4 billion, well below analysts’ expectations. It appears that both Microsoft and the analysts underestimated the extent of the PC slump.

Microsoft CFO Amy Hood said consumer PC shipments dropped 20 percent last quarter. This directly hurt Windows sales, but indirectly it also affected Office sales. One of the more disappointing parts of the report was a $900 million charge for Microsoft’s inventory of unsold Surface RT tablets.

A week ago Microsoft slashed the Surface RT price in an effort to get rid of excess inventory, but it seems it was too late. Wall Street likes blood in the water and Microsoft fell 6.3 percent in after-hours trading on Thursday. However, the stock performed rather well, with a 33 percent increase this year.

With Microsoft’s tablet strategy faltering, and no end in sight to the malaise in the PC market, the party may be over, at least for now.

Acer expects 10 to 15 percent drop in notebook sales

Acer issued a rather worrying forecast this week, as the fourth largest PC vendor announced it expects notebook sales to drop 10 to 15 percent in the first quarter of 2013.

The company attributed the downturn to seasonal factors, but it could be a sign that notebook vendors are in more trouble than ever. Windows 8 failed to boost sales, demand for Ultrabooks remains sluggish and next generation hybrids aimed to take on tablets have yet to materialise.

Meanwhile, tablets are doing great and they are expected to overtake notebooks in terms of unit sales this quarter.

Acer CEO Wang Jeng-tang said that the massive sequential decline is also a result of “replacement demand” for new products, such as smartphones and tablets, as well as some Windows 8 gear. Speaking at the sidelines of a corporate event, Wang told reporters that the notebook market had been turbulent over the past two years, reports the Taipei Times

Apple is still doing rather well, but Windows vendors are hurting.

Lenovo posted great financials a few weeks ago, but much of its growth was attributed to strong phone and tablet sales in China. However, Wang still sees some light at the end of the tunnel. He pointed out that Microsoft continues to promote its new OS and its Surface tablets, so demand for Windows 8 PCs could receive a boost. Since both the Surface Pro and Surface RT threaten to flop, Wang’s predictions sound a tad optimistic.

What’s more, Wang believes the tablet market will continue to be the main driver of Acer’s sales growth in 2013. Although any growth is welcome at this point, most of Acer’s tablets are affordable, Android based designs and Wang went on to say that the new Iconia B1 tablet generated huge sales last month.

However, the B1 is an entry level 7-inch tablet and it sells at a fraction of the cost of an Ultrabook. Acer plans to ship a total of 5 million tablets this year, up from 1.8 million last year. Up to 20 percent will be cheap 7-inchers. Acer also plans to ship two million smartphones this year, up from 500,000 last year.

It doesn’t sound like much and it isn’t. Like most traditional PC vendors, Acer failed to cash in on the mobile boom. Lenovo and Asus bucked the trend, at least to some extent, but PC giants like Acer, Dell and HP missed the boat.

Taiwanese OEMs are trying to diversify, slowly making inroads in the server space and they are still pushing tablets and tablets. However, growth in these segments is unlikely to offset the effects of the PC slump, at least in the short term. 

Microsoft not planning any new RT devices this spring

It’s no secret that Microsoft’s Surface RT tablet is not doing very well and now it appears that Redmond will not introduce any new Windows RT gear this spring. It will focus on the Windows 8 based Surface Pro instead.

Rumours of new Windows RT products emerged a couple of months ago, pointing to a smaller Surface tablet and some sort of Xbox branded gaming tablet. However, the rumours were apparently unfounded.

Speaking in an interview with Bloomberg, Tami Reller, CFO of Microsoft’s Window unit, said there are no plans to refresh the company’s Windows RT lineup this spring. She said Microsoft is still focused on getting the five RT products announced in October into stores in large numbers.

However, Microsoft’s problem apparently has more to do with getting the tablets out of the door, rather than securing more shipments. As many as 1.25 million Surface RT tablets have been shipped so far, but analysts put the actual sales figures much lower, in the 680,000 to 750,000 range

In the short term, Microsoft will focus on Windows 8 tablets instead, including its own Surface Pro. Reller said more Windows 8-based tablets will probably be sold, compared to those running Windows RT, which doesn’t bode well for the RT platform, which was supposed to end up significantly cheaper than Windows 8 and generate more volume.

“We will scale over time, but right now we’re focused on making sure the designs that have been built do have commercial availability and commercial success, and we’ll stay focused on that for the short-term,” said Reller.

Also, many more OEMs are expected to embrace Windows 8 tablets over their lower end Windows RT siblings and demand for RT gear seems very low indeed. Samsung has already opted not to sell its Windows RT tablet in the US, but at least they chose to build one, which isn’t the case with many partners.

Even chipmakers don’t seem sold on Windows RT. Qualcomm CEO Paul Jacobs recently raised concerns about Windows RT gear. He said Qualcomm was not surprised by the muted demand for new Windows OS and it is taking a cautious approach.

Reller did not wish to provide any Surface RT sales numbers but it is becoming increasingly obvious that the tablet, and the entire Windows RT platform for that matter, aren’t gaining much traction. 

Suppliers say Surface RT falling way below targets

Whispers among upstream component suppliers in Taipei suggest that Microsoft’s great tablet hope, the Surface RT, is more likely to meet just 60 percent of the company’s sales forecast by the end of the year.

Shy and retiring CEO Steve Ballmer recently admitted that Surface sales so far have been modest. Digitimes’ unnamed sources would agree, pointing out that the Surface RT has no advantage in terms of price and performance, while the lack of legacy software compatibility is also putting off consumers. Nor are they, the sources added, keen to use the Windows Store.

It’s also expected, according to Digitimes, that the device won’t be able to outperform the competition during the end of year holiday period, traditionally a goldmine for vendors with winning products. Instead, all the attention seems to be on the three-way battle for lower-end tablets between Google, Amazon, and Apple – itself caught on the back foot and forced to compete.

However, the sources claimed it is only Microsoft’s flagship device that is suffering – and that they expected Windows 8 tablets from vendors to benefit from the weaker than expected sales.

Manufacturing partners were left in the dark when Microsoft insisted on transforming itself from a software company to a hardware company with the Surface RT.

Although there was some hope for the product when details began leaking, the high retail price has led Redmond to repeat history: that is, the last time it tried to challenge Apple at hardware was with the ill-fated Zune MP3 player.

Microsoft will have another pop with an Intel-powered flavour of the Surface in early 2013.

Microsoft worries its app ecosystem won't Surface

An SEC document filed by Microsoft has revealed the rough data its anticipated tablet, the Surface, will go on sale. There are no surprises here but it is nice to know.

According to the filing, the Surface devices will start to appear in shops upon the general availability of the Windows 8 operating system, launching 26 October this year. The earliest previews of Metro suggested a tablet-friendly design but the world and its dog did raise its eyebrows when the company announced it would be manufacturing its own designs.

Although the company is yet to officially confirm when the Surface will be hitting the shops, save supply hiccups and unexpected last-minute faults, we would say an SEC filing is a pretty accurate picture of the company’s roadmap. 

The ARM-based Surface for Windows RT is set to get a look in before the Surface Pro – the traditional Wintel combination – appears, reports PCWorld. The company is sure to irritate some of its partners by working on and manufacturing its own designs, and it has recognised this. In the filing, Vole admits that its Surface products will “compete with products made by our OEM partners, which may affect their commitment to our platform”. 

However, Redmond must have felt pushed into the situation: although Microsoft is a software company through and through, it will have looked at the Apple, Google, and Amazon models and worried about being left in the lurch. Although Apple set the trend for tablets as a premium but essential, everday device (they’re not), Google and Amazon both recognised that the game isn’t in beating Apple, but winning on content.

Android and Amazon are fighting the battle in selling content. Windows Phone has not been particularly successful in building the most profitable or extensive ecosystem. Again, the filing reveals Microsoft may encounter a bump in the road with content. It reads: “In order to compete, we must successfully enlist developers to write applications for our marketplace and ensure that these applications have high quality, customer appeal and value”. Redmond is sure to be on a recruitment drive, and will have to offer intriguing incentives. Remember: it did well with the Xbox.

We can expect the Wintel Surface to be priced at a premium, while the ARM based Surface RT should take aim at cheaper models comparable on the market.