Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Microsoft CEO faces tough sell on Surface

16 May 2014, 15:04

New York - Satya Nadella has enjoyed a fairly smooth ride in his first 100 days as Microsoft chief executive, but he risks hitting a rough patch next week when he unveils the latest models of the tepidly received Surface tablet.

Investors have lapped up Nadella's "mobile first, cloud first" strategy to recast the venerable software maker as a "devices and services" company, sending its shares up 9% since he took the helm.

So far he has stressed the services side of the business, making the momentous move to put Microsoft's Office suite on Apple iPad. This was popular with Wall Street and more importantly with consumers, who performed 27 million downloads in a matter of weeks.

But Microsoft is expected to unveil the third generation of its Surface devices at an event on Tuesday, laying hints that it will also introduce a smaller tablet, to address the fast-selling lower end of the market dominated by Samsung's Galaxy range, Amazon.com's Kindle Fire, Apple's iPad mini and Google's Nexus.

The devices side of the strategy has been a challenge. Microsoft's Surface, launched in October 2012, has about 2% of the market and has not made a dent on Apple's iPad. That fits with Microsoft's 3% global share in smartphones.

Business customers

Given that tiny market, some investors believe Microsoft should not waste time and money on the low-margin hardware business. ValueAct Capital, which led the shareholder revolt last year which culminated in previous CEO Steve Ballmer's retirement, has lobbied against Microsoft's hardware effort, including its costly acquisition of Nokia's handset business.

"Nadella is off to a golden start as CEO, although turning around the tablet and mobile business over the next 12 to 18 months remain his two key Herculean tasks," said Daniel Ives, an analyst at FBR Capital Markets.

"If the turbulence gets too rough on the tablet and/or mobile segment, we can potentially see some strategic changes on the horizon around the hardware business."

Despite unspectacular sales, there are signs that Microsoft's Surface Pro 2, which runs the full Windows operating system, is starting to attract Microsoft's core business customers.

"There's certainly tons of interest in the Surface Pro as an Ultrabook [lightweight laptop] replacement that has tablet capabilities," said JP Gownder, an analyst at tech research firm Forrester.

"It is the No 1 model I get asked about, it's going to have a lot of eyes on it."

Even if the Surface never dominates the market, Gownder thinks Nadella and Microsoft are right to persevere with hardware, if only as a way of showing other device makers how best to make use of Windows.

"Microsoft would be nuts not to have devices in the mix. The danger is in not exploring," said Gownder.

The Surface "is an important product to basically show what their overall vision is for Windows, and also to offer businesses and consumers another choice".

- Reuters


Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Submitted by
Wilson Ochieng
ODM beats Jubilee in 3 by-electio...

ODM dominates Jubilee Party in by elections.

Submitted by
Wilson Ochieng
Kenyan ivory seized in Vietnam

Vietnamese authorities have seized 1 tonne of ivory smuggled from Kenya, the fifth such seizure in the past month. Read more...

Submitted by
Cyril Mike Odhiz
Kenyans furious on young lady aft...

A young Kenyan woman is the talk of town after she posted a photo with her elderly lover after a round of steamy sex, or so the photo suggested.  Read more...

Submitted by
Kiplangat langat
Uhuru could be a one term Presid...

Bomet governor Isaac Ruto has said that President Uhuru Kenyatta could be a one term President if he fails to increase allocations to the counties. Read more...

Submitted by
Mody Sammy
35 year old farmer a new milliona...

A 35 year old farmer from Mpeketoni Lamu county has become the latest millionaire in town as she became winner in the ongoing ‘Shinda Mamili na Story Ibambe’. Read more...

Submitted by
Shakila Alivitsa
Leave your past relationship bagg...

Leave your past relationship baggage at the door when you start a new relationship. Read more...