Linked by Thom Holwerda on Tue 9th Oct 2012 22:01 UTC
Microsoft Steve Ballmer's annual letter to shareholders makes it very clear Microsoft is at a point of no return - and in the middle of a transition into a hardware company. "This is a significant shift, both in what we do and how we see ourselves - as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses." Line. Sand.
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RE: OEMs deserve to suffer
by kaiwai on Wed 10th Oct 2012 04:04 UTC in reply to "OEMs deserve to suffer"
kaiwai
Member since:
2005-07-06

Had big OEMs like HP, Dell, Toshiba, IBM/Lenovo etc spend 0.01% of the money they paid MS over the years on Linux software and application development Linux would be a much better alternative now that they going to need it.

They had no strategic thinking and only thought about selling cheaper shit with more crapware and now Apple and MS are going to make them pay.


I don't think Microsoft will produce computers themselves but I could see them come down hard on their OEM partners - "here is the standard, either meet it or lose your OEM discounts". I could see Samsung, Lenovo and maybe Sony making it in the consumer space with Lenovo/HP in the enterprise but Dell is eventually going to die the death of a thousand crappy laptops with faulty batteries. I think going forward OEM contracts will not easily be handed out and the bar set will be a lot higher than in the past.

End of the day the biggest barrier has always been crappy OEM's who compete on price rather than quality - and it is amazing when I hear people on this forum whine that their $400 laptop performs horribly when compared to 'those over priced Mac's' that they whine about. There is a complete lack of connecting the dots by people here as to why their $400 laptop costs $400 or why crapware is installed in the first place or how pricing things cheap is no substitute for making a quality product. I'm using a Lenovo ThinkPad X1 Carbon and wouldn't give it up for anything else on the market - it is a quality product with a price tag that was reasonable. Lenovo made a nice profit off my purchase (which I see nothing wrong with) and I've got a great laptop that works like a charm - we both win and come out better off.

Reply Parent Score: 8

RE[2]: OEMs deserve to suffer
by Brendan on Wed 10th Oct 2012 04:51 in reply to "RE: OEMs deserve to suffer"
Brendan Member since:
2005-11-16

Hi,

I don't think Microsoft will produce computers themselves but I could see them come down hard on their OEM partners - "here is the standard, either meet it or lose your OEM discounts".


I don't think Microsoft have a reason to be more involved in PC hardware. They already control the most relevant standards (e.g. ACPI) and also have a "Windows Logo Program" to entice hardware manufacturers to do what Microsoft wants.

The "fundamental shift" they're talking about is smart phones, tablets, x-boxes, TV/media centers, etc; with hardware probably manufactured by other companies in partnership with Microsoft (and sold with Microsoft's branding, software, vendor lock-in, etc).

The other part of it is likely to be making consumers pay for "cloud", and tying all these devices into an app store model (where Microsoft get a percentage of all third-party software sales).

Basically, make sure Microsoft get a good percentage of the initial hardware sale, then make sure Microsoft get a good percentage of everything after that, then make sure the devices are useless if consumers realise their wallet is being sucked dry. :-)

- Brendan

Reply Parent Score: 4

RE[3]: OEMs deserve to suffer
by kaiwai on Wed 10th Oct 2012 05:06 in reply to "RE[2]: OEMs deserve to suffer"
kaiwai Member since:
2005-07-06

I don't think Microsoft have a reason to be more involved in PC hardware. They already control the most relevant standards (e.g. ACPI) and also have a "Windows Logo Program" to entice hardware manufacturers to do what Microsoft wants.


ACPI isn't a comprehensive standard so I wish people would stop chanting these acronyms as if they were complete standards and only if the OEM's actually stuck to them we would have nirvana. The reality is that these standards are deliberately designed in such a way that leaves holes open for vendor differentiation hence the reason why vendors provide ACPI drivers for their computers.

The "fundamental shift" they're talking about is smart phones, tablets, x-boxes, TV/media centers, etc; with hardware probably manufactured by other companies in partnership with Microsoft (and sold with Microsoft's branding, software, vendor lock-in, etc).


Or the a close relationship as with the case of Microsoft and Nokia but I could see a conflict brewing when it comes to services on top where Nokia will want their share of the pie and Microsoft equally preferring that their platform is being used to access Microsoft services rather than the handsets own.

The other part of it is likely to be making consumers pay for "cloud", and tying all these devices into an app store model (where Microsoft get a percentage of all third-party software sales).


The percentage they receive is small when compared to what it needs to pay for - even Apple which runs on the smell of an oily rag isn't exactly rolling in the cash off the back of the 30% cut. The cut they receive pays for the reviewing process, the data-centres and maybe some of the operating system development costs but I don't see it being a big money spinner.

As for the renting applications model - they've tried it multiple times and each time the consumer rejects it even if over a three year cycle the subscription works out cheaper. People like to be in control of their purchasing and they don't want to feel as though they're being forced into anything thus Microsoft has continued to sell Microsoft Office 2013 permanent licence. End of the day as I've said the best thing Microsoft can do when it comes to services is sell value added services on top of their traditional software licenses because long term I simply don't see customers happy to pay a per monthly basis for their software in the same way that people are happy to pay for cloud storage or exchange service (which is what I'm paying for right now).

Basically, make sure Microsoft get a good percentage of the initial hardware sale, then make sure Microsoft get a good percentage of everything after that, then make sure the devices are useless if consumers realise their wallet is being sucked dry. :-)


Or they could go the third option and start selling the tablets through carriers - I know in New Zealand Telecom seems to be quite happy to see tablets at subsidised prices on 12 and 24 month contracts and Vodafone did the same thing with netbooks with 3G devices.

Edited 2012-10-10 05:07 UTC

Reply Parent Score: 4

RE[2]: OEMs deserve to suffer
by diegoviola on Wed 10th Oct 2012 07:32 in reply to "RE: OEMs deserve to suffer"
diegoviola Member since:
2006-08-15

Man that ThinkPad X1 Carbon is amazing, I'm a proud owner of a T510 and I run Linux on it.

I think the X1 Carbon will be my next laptop.

Reply Parent Score: 2

RE[3]: OEMs deserve to suffer
by WereCatf on Wed 10th Oct 2012 07:55 in reply to "RE[2]: OEMs deserve to suffer"
WereCatf Member since:
2006-02-15

Man that ThinkPad X1 Carbon is amazing


I personally don't find anything fantastic about it. Anything less than 17" is too little, I want enough power from the thing to be able to game comfortably on it, and I don't want to spend several grands on it. But alas, tastes are an individual thing, and I've always found practicality much more important to me than aesthetics.

Anyways, off-topic.

Reply Parent Score: 2

RE[3]: OEMs deserve to suffer
by maccouch on Wed 10th Oct 2012 12:19 in reply to "RE[2]: OEMs deserve to suffer"
maccouch Member since:
2012-03-14

actually it does seems a pretty cool laptop. it's in the Air price range, so i would personally go the Air (if Apple doesn't screw up the mac os) but it's a pretty good option and seems a very decent workhorse.

i just wish that:
a) lenovo allowed Linux or BSD as default OS (with the consequent price drop) and
b) that they changed the website for customizing the laptop. 9 out of 10 items don't have any options. the whole thing is confusing as hell.

Reply Parent Score: 1

RE[2]: OEMs deserve to suffer
by kragil on Wed 10th Oct 2012 08:45 in reply to "RE: OEMs deserve to suffer"
kragil Member since:
2006-01-04

Sure, MS won't build low margin boxes. BUT they will build high margin premium devices.

Remember MS and Apple won't sue each other anymore, their patents are all basically shared.

For example: MS can easily add a magsafe power connector to surface and ship pinch-to-zoom or that magic trivial scrolling Apple has patented. Other OEMs .. not so much (besides Sony)

Reply Parent Score: 2

RE[3]: OEMs deserve to suffer
by kaiwai on Wed 10th Oct 2012 09:20 in reply to "RE[2]: OEMs deserve to suffer"
kaiwai Member since:
2005-07-06

Sure, MS won't build low margin boxes. BUT they will build high margin premium devices.

Remember MS and Apple won't sue each other anymore, their patents are all basically shared.

For example: MS can easily add a magsafe power connector to surface and ship pinch-to-zoom or that magic trivial scrolling Apple has patented. Other OEMs .. not so much (besides Sony)


There is a clause though with the patent sharing that doesn't allow 'blatant' copying so it isn't really an open and shut case.

Reply Parent Score: 2

RE[2]: OEMs deserve to suffer
by boldingd on Wed 10th Oct 2012 21:06 in reply to "RE: OEMs deserve to suffer"
boldingd Member since:
2009-02-19

I don't think Microsoft will produce computers themselves but I could see them come down hard on their OEM partners - "here is the standard, either meet it or lose your OEM discounts". ... I think going forward OEM contracts will not easily be handed out and the bar set will be a lot higher than in the past.


I think you're exactly right. I think they're looking at the iOS/OS X and Android models, and they want to go more in that direction. And they can't do that if they're allowing OEMs to ship butchered, mutilated versions of the OS, which produce a sup-par user experience, and a different sub-par user experience per unique OEM at that.
They've wanted to take more configuration control away from OEMs for a long time, and I wouldn't be surprised if they start to become willing to take drastic steps to do it.

End of the day the biggest barrier has always been crappy OEM's who compete on price rather than quality - and it is amazing when I hear people on this forum whine that their $400 laptop performs horribly when compared to 'those over priced Mac's' that they whine about. There is a complete lack of connecting the dots by people here as to why their $400 laptop costs $400 or why crapware is installed in the first place or how pricing things cheap is no substitute for making a quality product. I'm using a Lenovo ThinkPad X1 Carbon and wouldn't give it up for anything else on the market - it is a quality product with a price tag that was reasonable. Lenovo made a nice profit off my purchase (which I see nothing wrong with) and I've got a great laptop that works like a charm - we both win and come out better off.


I don't think I've ever heard anyone do that on this forum. You're railing against a user who either doesn't exist at all, or is non-representative.

I also find "wise consumers should always spend up for expensive OEM systems" to be completely rediculous.

Reply Parent Score: 3