Microsoft launches thier FIRST PHONE!!..its not WP :/ .......

[DJCBS]

The problem is that Microsoft's profits on Windows are declining thanks to the decline of the traditional PC and even the laptop. If they don't try to push out their services to compensate for that, soon they'll be left only with Office profits. That's not a good idea.

Yes, Microsoft still makes a ton of money out of Windows and Office, specially in enterprise. But unless they want to end up just offering enterprise solutions, they have to try to compensate their sales losses some other way. Leading people to their other services is a solution that, if all goes well, ends up bringing people back to those first software offerings that they rule, ie Windows.

 

[a5cent]

The problem is that Microsoft's profits on Windows are declining thanks to the decline of the traditional PC and even the laptop. If they don't try to push out their services to compensate for that, soon they'll be left only with Office profits.

Like I said, pushing out more services doesn't compensate for anything. Their services aren't making them money. That is the fundamental flaw in all the 'go services' arguments.

 

[DJCBS]

Like I said, pushing out more services doesn't compensate for anything. Their services aren't making them money. That is the fundamental flaw in all the 'go services' arguments.

And that's where the ads come in. Microsoft also makes money out of advertising in their services. I think you'll be seeing more ads from Microsoft in the future, in the likes of the ones you now see in the XBone.

 

[a5cent]

And that's where the ads come in. Microsoft also makes money out of advertising in their services. I think you'll be seeing more ads from Microsoft in the future, in the likes of the ones you now see in the XBone.

In the U.S. maybe. Outside the U.S. Google commands an advertisement monopoly that I doubt MS will be penetrating anytime soon. We're just all assuming MS can decide to make money off adds the way Google does, 15 years after Google has claimed almost every market. I don't think that is realistic. If MS could make their services profitable they would already be profitable.

 

[Michael Alan Goff]

I absolutely don't understand why Microsoft still releases Android phones... would Apple release an Android or WP phone? Never! Then why does Microsoft do it? Don't they trust their software to be the best?

Two different companies with two different ways of making money.

 

[tgp]

Two different companies with two different ways of making money.

Before too long they will probably be making money the same way.

 

[nyolc8]

Their first phone? Nope. Just three letters: KIN
And for using Android when they have WP: lol

 

[Michael Alan Goff]

Before too long they will probably be making money the same way.

That's their goal, but I doubt they're going to get there.

 

[DJCBS]

In the U.S. maybe. Outside the U.S. Google commands an advertisement monopoly that I doubt MS will be penetrating anytime soon. We're just all assuming MS can decide to make money off adds the way Google does, 15 years after Google has claimed almost every market. I don't think that is realistic. If MS could make their services profitable they would already be profitable.

We have ads in Microsoft's offerings in Europe too.
Don't mix ads with a search engine. Bing will never go anywhere as long as Google is around. That I have no doubts. But the rest? Outlook & Co.? Those stand a good chance. And those can be exploited through ads. Outlook already is, for example.

 

[a5cent]

We have ads in Microsoft's offerings in Europe too.
Don't mix ads with a search engine. Bing will never go anywhere as long as Google is around. That I have no doubts. But the rest? Outlook & Co.? Those stand a good chance. And those can be exploited through ads. Outlook already is, for example.

I'd agree with all of that. The difference seems to be that you think MS can make their services profitable by distributing advertisements through outlook.com. I'm not convinced that can generate enough profits to make MS' services profitable. Most of Google's services aren't profitable either (except search), neither are Apple's (except iTunes). I'm sure MS can do better, but achieve profitability... I don't know.

I guess we'll have to wait and see how profits are reported in 2015 and 2016.

 

[DJCBS]

I'd agree with all of that. The difference seems to be that you think MS can make their services profitable by distributing advertisements through outlook.com. I'm not convinced that can generate enough profits to make MS' services profitable. Most of Google's services aren't profitable either (except search), neither are Apple's (except iTunes). I'm sure MS can do better, but achieve profitability... I don't know.

I guess we'll have to wait and see how profits are reported in 2015 and 2016.

Oh no no no. It's not that. I think, though, that the ads can help with the profitability of their services. But not sustain them on their own. If Google can't do it after all these years, none of the other non-advertisement based companies can.

But as everything in economics, it's a matter of balancing the revenue sheets. If they can compensate the losses on Windows sales with gains in their services sales (be it through ads, subscriptions to OneDrive, Xbox etc), they'll be good. They just can't keep expecting to survive only based on their operating systems offers. They need more software and service sales. Which is where the Android phones come in. Note, though, I'm not entirely sure this X platform strategy Microsoft came up with will work. I have my doubts but we'll see. So far the phones are selling well.

 

[a5cent]

Oh no no no. It's not that. I think, though, that the ads can help with the profitability of their services. But not sustain them on their own. If Google can't do it after all these years, none of the other non-advertisement based companies can.

But as everything in economics, it's a matter of balancing the revenue sheets. If they can compensate the losses on Windows sales with gains in their services sales (be it through ads, subscriptions to OneDrive, Xbox etc), they'll be good. They just can't keep expecting to survive only based on their operating systems offers. They need more software and service sales. Which is where the Android phones come in. Note, though, I'm not entirely sure this X platform strategy Microsoft came up with will work. I have my doubts but we'll see. So far the phones are selling well.

It seems to me I'm still not understanding something.

If MS can't expect to survive based on their operating systems offers, then relying on a services division that both of us expect to generate further loses isn't going to help them either. In fact, it will make things even worse. If the Nokia X, and in particular the services angle, are only about losing less money, well, that's definitely not the best business plan, right? It would then be far more reasonable to just kill the Nokia X and all of MS' money losing services along with it (everything except Office 365).

Obviously, that isn't what MS is doing, which is why I'm not on board with the popular belief that getting more people to use MS' services is directly related to financial gains.

I don't know. It seems I'm the only one that isn't on board, which does make me sceptical of my own views, but I still don't see what everyone else is seeing either.

 

[DJCBS]

It seems to me I'm still not understanding something.

If MS can't expect to survive based on their operating systems offers, then relying on a services division that both of us expect to generate further loses isn't going to help them either. In fact, it will make things even worse. If the Nokia X, and in particular the services angle, are only about losing less money, well, that's definitely not the best business plan, right? It would then be far more reasonable to just kill the Nokia X and all of MS' money losing services along with it (everything except Office 365).

Obviously, that isn't what MS is doing, which is why I'm not on board with the popular belief that getting more people to use MS' services is directly related to financial gains.

I don't know. It seems I'm the only one that isn't on board, which does make me sceptical of my own views, but I still don't see what everyone else is seeing either.

At this point it's about losing less money, yeah.
They can't go around axing all their money-losing offerings otherwise WP will be the first to face the axe, starting with Microsoft Mobile. Followed by Bing, Xbox and the lion share of Microsoft's current offerings. So they must try to leverage the money losses in a manner that can be compensated by other gains. Even if the services division isn't profitable to sustain itself, it may help keep other software alive. It's bleeding a thing to keep another alive.

Again, I'm also not sure the X platform is such a good idea or that it will work. But hey...it's more likely to work than if Microsoft did nothing. And at a certain point, any X phone sold is one potential less Google Android phone sold (although it may backfire on them since I doubt anyone who experiences the X platform will be inclined to try a Windows Phone after that...)

 

[tgp]

And at a certain point, any X phone sold is one potential less Google Android phone sold (although it may backfire on them since I doubt anyone who experiences the X platform will be inclined to try a Windows Phone after that...)

Hmmm, I would almost think that any Nokia X phone sold is one potential less WP sold. It seems that a lot of people with WP have it because it's on a Nokia device. The X provides users with a Nokia but with a much more robust ecosystem, Microsoft's services and Android's more plentiful and higher quality apps.

 

[rodan01]

Apple makes a lot of money with itunes. Google make a lot of money with ads.
MS could make money with both and more. Online services, digital goods and the cloud are just starting. These markets will explode in the next few years.
Just think about it. 1 billion people buying music, movies, books, cloud storage, apps, accessories, etc., from you, being exposed to your ads. It sounds like a good business.
Markets aren't static, some staff are going to grow others are going to shrink.
It looks like operating ssystems and hardware are losing relevance.

 

[a5cent]

It looks like operating ssystems and hardware are losing relevance.

In terms of money earning potential, yes, because Google's business model is making OSes unprofitable. It is usually very hard to sell anything your competition is selling below cost or giving away for free.

I realize there are a lot of things MS could sell to compensate for shrinking OS profits. I guess my point is that they have already been trying, and have not succeeded so far. What makes you think that will all change now?

I'm not saying MS' services can't earn more, but just deciding: 'well, now we'd actually like to earn money from services' isn't a guarantee that you will. What is it between today and tomorrow that will change to make MS' services better earners?

 

[thatotherdude24]

Surface team - I have a SP2 - I cant use wfi and BT at the same time - see above.

​Just curious, why not?

 

[wuiyang]

Their first phone? Nope. Just three letters: KIN
And for using Android when they have WP: lol

i use android when i have WP just to laugh how stupid is android

 

[Michael Alan Goff]

i use android when i have WP just to laugh how stupid is android

Elaborate.

Or is this just "Android suxxors lol" type of talk?

 

[rodan01]

I'm not saying MS' services can't earn more, but just deciding: 'well, now we'd actually like to earn money from services' isn't a guarantee that you will. What is it between today and tomorrow that will change to make MS' services better earners?

Microsoft not longer has a natural monopoly on operating systems. The monopoly allowed them to earn abnormal profits from Windows.

The reasons why the performance of services will improve:
*Growth of the market in the number of users and the amount of money each user spend in digital goods, the number of ads the user is exposed to in MS properties. This not only improve the size of the business, scale improve margins specially for MS which is a smaller player.
*They have to align the software with this new strategy. Windows has to be a tool to sell services. They have to ship Windows 9 with OneDrive and search integration in all the devices they can, It's a good idea to make Windows 9 a free upgrade for Windows 7 users Sacrifice the OS business to win in the service business.
* All or most of the software used in Windows has to be downloaded from the store. Desktop store apps are coming.
* MS is the service provider with the best cross platform support.
* I guess they will improve their market share in smartphones and tablets with Windows or X.