Company / division: Windows
★ Microsoft Unveils Surface Laptop, an Odd Mix of Power and Constraints (May 2, 2017)
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★ Microsoft Unveils a Big Education Push Including Operating System, Hardware, Apps (May 2, 2017)
Microsoft today held an education-focused event in New York City, at which it announced a stripped-down version of Windows, new end-user and teacher/administrator apps, and new hardware for the education market. This is by far the biggest and most comprehensive education push we’ve seen from any of the three big OS vendors, and is clearly intended to reassert Microsoft’s pre-eminent position in the education domain. What was evident from the first part of the event was how committed Microsoft is to making this work, and it began with an impassioned and personal talk from CEO Satya Nadella about his own family background and how education made a difference. Just as Microsoft’s AI mantra has been about democratizing the technology, so he now talks about democratizing educational opportunity. That’s a worthy goal, and Microsoft’s new announcements are a great way to try to bring that about, but Microsoft was also admirably realistic about the role technology plays in education: it assists and empowers but can’t replace committed teachers and parents or educational institutions. I have separate posts about Windows 10 S (here) and Surface Laptop (here). But I like the way Microsoft is introducing education into many of its existing products, including Office, Minecraft, Intune, and so on. Treating education as a first party audience alongside consumers and enterprises makes perfect sense, and is the route others have already taken. What Microsoft announced today feels like it will move its story forward in education considerably. Both Google and Apple have developed more comprehensive stories in education over the past couple of years too, but Microsoft’s arguably goes further, though developer events from the other two in the next six weeks could redress that balance a little.
via VentureBeat
★ Microsoft Misses on Revenue as Hardware Weakness Partly Offsets Cloud Strength (Apr 27, 2017)
Microsoft was one of numerous big tech companies that reported Q1 2017 financial results (its fiscal Q3 results) this afternoon, and the only one of the big three to miss on revenue. That revenue miss was largely due to a shortfall in hardware revenue as Surface had its first big year on year decline in a year and a half due to a lack of new mass market hardware, and phone revenue dropped to essentially zero. However, these two businesses together make up just 4% of Microsoft’s revenue, which continues to be dominated by software and to an increasing extent services, while growth is dominated by the move to the cloud. Microsoft’s cloud revenue run-rate is now at an annualized $15.2 billion, compared to Amazon’s $14.5 billion in actual annual revenue, though Microsoft’s definition of cloud here is far more expansive than Amazon’s. The productivity business had a particularly strong growth quarter at over 20%, while the Intelligent Cloud segment also improved a little to just over 10%. But margins continue to fall overall as the newer cloud services generate less profit than Microsoft’s old massively profitable software business did, and that picture isn’t likely to change. Microsoft is growing again after both lapping the introduction of Windows 10 and the revenue deferral associated with the new business model, and also getting past the biggest drops in the phone business, but it’s mostly doing so by doubling down on enterprise products and services while its consumer and hardware businesses mostly continue to struggle to find growth.
via Microsoft
ARM-Based Windows 10 PCs to Arrive in Q4 2017 (Apr 21, 2017)
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Gartner Says Worldwide PC Shipments Declined 2.4 Percent in First Quarter of 2017 (Apr 12, 2017)
Yesterday, we had IDC’s PC numbers for Q1 2017, and today we have Gartner’s. As usual, they show pretty different trends (IDC the first growth in five years, Gartner the lowest total shipments since 2007), because the companies define the market in different ways. Whereas those IDC numbers were for “traditional” PCs, these Gartner numbers include what some call “detachables” and Gartner calls “ultra mobile premiums” such as the Microsoft Surface. Interestingly, though, whereas in the past those detachable and convertible devices have led Gartner’s numbers to grow faster than IDC’s, the situation now appears to be reversed. That’s interesting, given how hot this category has been and how much it’s helped the overall PC market in the past couple of years. My guess is that the trend will go back to its previous pattern the rest of the year. The two companies do agree on some trends though: HP had a great quarter, particularly in the US, and component shortages are driving some interesting trends. However, whereas IDC saw the latter driving higher shipments in Q1 to get ahead of price increases, Gartner focuses on the downward pressure on shipments the component shortage is likely to cause in the rest of the year due to price increases. IDC and Gartner also agree that the “other” category is suffering badly as the big names consolidate share.
via Gartner
Traditional PC Market Was Up Slightly, Recording Its First Growth In Five Years as HP Recovered the Top Position – IDC (Apr 11, 2017)
This is an impressive rebound for the traditional PC market, which IDC had expected to continue to decline in Q1 but actually grew for the first time since 2012. One of the explanations, though is higher shipments that didn’t necessarily translate into sales, as companies locked in component inventories, so it’s not strictly speaking sales growth. However, it’s worth watching for whether this turns into a longer-term recovery for PC sales or just a temporary blip – my money is still on a long-term decline. When it comes to the individual vendors, Lenovo appears to be struggling despite a pretty decent recent history in PCs, which will further add to its woes given the collapse of its smartphone business over the last year or so. HP did very well, at least on paper, and it will be interesting to watch its next earnings release for signs of what drove the 13% growth it saw. Apple also seems to have done well, continuing the recovery it’s seen since launching new MacBook Pro models late last year. The other big story continues to be the decline of the “other” category as the top five or six vendors continue to scoop up more and more market share and growth, dooming the rest to declines much more severe than the market as a whole.
via IDC
Microsoft’s cheaper mixed reality experience is similar to HoloLens, but there are limitations – Mashable (Apr 7, 2017)
When Microsoft held its Surface event back in October last year, one of the quick announcements it made towards the end was that OEMs would be producing VR headsets starting at $299. At the time, I said “Microsoft’s promotion of VR headsets from its OEM partners today is the first sign we’ve seen that Microsoft might be rethinking its focus on augmented rather than virtual reality. Given that HoloLens is likely to continue to struggle to achieve mainstream appeal, supporting a more consumer-friendly VR push by laptop makers is a smart move, although $299 PC-based VR solutions may struggle against smartphone-based versions at $100-200 which are more portable.” I still feel pretty much the same way about this, and it’s interesting that – despite the Windows Mixed Reality branding – these are basically VR rather than AR headsets. That’s a concession that VR is where the action is today, is the space at least some consumers already understand, and is frankly where all the content is today too. These new devices also reinforce the obvious compromises made when bringing price points down: the lower PC standards and cheaper hardware will make these VR headsets less powerful than either HoloLens or Oculus or HTC Vive hardware. There’s therefore an important question about whether this in-between space will gain any traction versus the cheap and basic mobile VR experiences provided by Gear VR and Daydream VR at one end and the high-end stuff being produced by HTC, Oculus, and Playstation.
via Mashable
Android overtakes Windows as the internet’s most used operating system – TechCrunch (Apr 3, 2017)
This is an interesting counterpart to last week’s item about revenue from Android apps surpassing revenue from iOS apps in 2017. That news had been a long time coming, because Android has long since been way out in front of iOS in terms of user numbers, but revenue for developers has lagged anyway. This week, the news from Statcounter, which measures online traffic, is that Android has surpassed Windows as the source of the greatest share of online traffic by operating system. That, too, is likely a lagging indicator for the number of people using Android versus the number of people using Windows, but for a different reason – much of online usage on mobile is in apps, whereas on a PC it’s almost all web-based, so PCs will always over-index on web usage relative to mobile devices. There’s a good chance that Android has hundreds of millions more users than Windows already.
via TechCrunch
The desktop PC is finally cool – The Verge (Mar 6, 2017)
I’m pretty sure this headline is using the term PC in its narrower sense, and it could therefore read more specifically: “The Windows desktop PC is finally cool” because I’d certainly argue iMacs have been cool from the beginning. But this also feels part of a broader shift in the fortunes of Windows PCs – for years they seemed the utilitarian counterparts to the various members of the Mac line: often uglier, bulkier, with shorter battery life, harder to use, and all the rest. But that’s really changed in the last couple of years: with help from Intel (and perhaps a bit of a nudge from Microsoft’s own Surface line) Windows PCs have finally started to be really competitive in pure hardware terms with the Mac. That’s a sea change, and it means the competition between Mac and PC is now as much philosophical as it is about performance – there’s no clear edge in hardware for either side, and which platform you choose will be about the respective approaches to subjects like platform integration, touch interaction, and services instead. But of course none of this is happening in a vacuum – this resurgence of the Windows PC is coming just at at time when Apple seems to have taken its foot off the gas for a while with regard to the Mac, and especially the non-iMac desktops. And that raises the stakes significantly. Apple has so far said lots about its commitment to the Mac, but only followed those words up with action in the MacBook Pro line on the hardware side and the professional apps on the software side. For now, it’s asking a lot of people to trust that more is coming, but I’d say the urgency for those changes and updates is growing all the time.
via The Verge (see also this pair of posts from BI over the last couple of days – I certainly don’t agree with all of what they say, but they’re emblematic of the narrative developing at the moment)
Video Pros Moving From Mac to Windows for High-End GPUs – Daring Fireball (Feb 23, 2017)
I’m linking to this piece from John Gruber rather than the source because he highlights the key point here, which is that for some creatives with high-end computing needs, the current Mac lineup isn’t cutting it anymore, and they’re switching to Windows. When the new MacBook Pros came out late last year, there was lots of complaining from the developer and creative communities about the computers being underpowered, with no recent updates to the Mac Pro either. I’ve written about this, and think there are two separate things going on: firstly, Apple’s base is about so much more than power users at this point, and it has to focus on the majority not the tiny minority; and secondly, it’s very hard to know how representative these one-off anecdotes are of the broader picture. Are lots of creatives really abandoning the Mac, or is it just a handful who are getting lots of attention because they reinforce a narrative? I wish someone would do some kind of representative survey here – I only have my own anecdotal evidence to go on, which is that most video creatives are sticking with Mac for now, but again it’s not representative.
via Daring Fireball
Microsoft FY17 Q2 (December 2016 quarter) Earnings – Microsoft (Jan 26, 2017)
Cloud was the big theme on Microsoft’s earnings call once again, with a $14 billion annual run rate and nearly 50% gross margins across its cloud businesses, and a 95% growth rate in the Azure business alone. Surface revenue was down a bit, predictably because the product line wasn’t refreshed as fully as in previous years, but not by much, and it seems commercial sales actually grew (probably a reflection of the long sales cycles in enterprise). The phone business continues to dwindle to nothing (just over $200m in revenue this quarter by my estimate, down 81% year on year), but that’s so small now it barely impacts results. Windows did well overall, with some revenue growth from slightly stronger shipments in the PC market, though the PC market overall was still down overall last quarter. Monetizing its consumer business continues to be one of Microsoft’s biggest challenges – its Office consumer subscribers appear to be plateauing at around 25 million, most of its other consumer apps are offered free, and gaming is performing decently, though overall gaming revenue was down year on year. Overall, the results feed the narrative that Microsoft is undergoing a comeback, though it’s a slow and subtle one from a financial perspective.
You might also be interested in the Microsoft Q4 2016 deck which is part of the Jackdaw Research Quarterly Decks Service.
via Microsoft (more on Techmeme)
Minecraft Pocket Edition will no longer receive updates for Windows mobile devices | Windows Central (Jan 19, 2017)
It’s becoming ever clearer that Microsoft is going to go through yet another revamp of its smartphone OS strategy, on top of Windows Mobile and Windows Phone (you could argue Windows 10 Mobile as it currently stands is already a third, but it was very much an update to Windows Phone in reality). Other developers have been abandoning their Windows Phone apps for some time now, but for Microsoft itself to do it is the clearest sign yet that there’s no meaningful future for Windows on consumer mobile devices as it currently stands. The article holds out hope for the full Windows on ARM strategy Microsoft is working on, but it still seems very likely that this will end up being a marginal and enterprise-centric play rather than something that gets Microsoft back into the consumer smartphone market.
via Minecraft Pocket Edition will no longer receive updates for Windows mobile devices | Windows Central
Gartner Says 2016 Marked Fifth Consecutive Year of Worldwide PC Shipment Decline – Gartner (Jan 11, 2017)
This is Gartner’s quarterly press release on PC shipments for the end of 2016 (IDC’s equivalent release is here, with slightly different numbers, and definitions). The thrust is that the PC market continues to decline, with a 6.2% drop for the full year, and a more modest 3.7% decline in Q4 alone. But the other thing worth noting is that there’s a stark difference between the performance of the big players and the rest – the top six grew by 1.4% and the top five by 2%, but everyone but the top six collectively declined by 18.8% over the full year. The big players are mostly doing OK, but at the expense of a plethora of smaller players, and this is the shape of things to come, with the big question being the number of “big” players that will be able to sustain this performance – Asus and Acer saw declines in Q4, while Apple did better thanks to the new MacBooks.
via Gartner Says 2016 Marked Fifth Consecutive Year of Worldwide PC Shipment Decline – Gartner
Microsoft tries to soothe regulators and critics with new privacy controls | ZDNet (Jan 10, 2017)
Microsoft has been rapped over the knuckles by regulators and attacked by privacy advocates over its data collection in Windows 10. Over-collection of data combined with lack of notification for users have to be the most common twosome in privacy abuses among tech companies. Tech companies often collect far too much data by default, and then fail to inform users what’s being collected or why. This change is a positive one, but I’d hope that Microsoft (and others) will learn from the backlash here and do better from the outset in future releases of Windows and other products.
via Microsoft tries to soothe regulators and critics with new privacy controls | ZDNet
The PC is interesting again – The Verge (Jan 4, 2017)
Rather than linking to a whole set of separate CES press releases from various PC makers, I’ll link to this. It’s a great summary of what we’ve seen in PCs at CES and to some extent over recent months in general. Though PC sales overall are declining, there are still some interesting things happening with form factors, performance, and more, and increasingly spec- and performance-wise, Windows PCs are now the equals of the Mac. The big question, then, becomes philosophical differences in approach as regards things like touch, convergence of operating systems across device types, and so on.
via The PC is interesting again – The Verge
Lenovo VR Headset Based on Windows Holographic For Close to $300 | Variety (Jan 3, 2017)
This will arguably be the year of piling on in VR, with many companies jumping on a bandwagon led by Sony, HTC, and Oculus. Lenovo, of course, has two possible routes to VR – mobile and PC-based. This article is about a PC solution, but at a price closer to some mobile VR technology than most of the PC stuff out there today. Microsoft does seem to be getting some big names on board, though of course we’re months from seeing how these products actually perform in the wild. See also this piece from The Verge with some more details.
via Lenovo VR Headset Based on Windows Holographic For Close to $300 | Variety
Microsoft might add ‘game mode’ to Windows 10 for maximum gaming performance – The Verge (Dec 28, 2016)
This isn’t coming out of left field – one of the big consumer features of Windows 10 has been its gaming emphasis, so this is a natural evolution. Gaming has been one of the big consumer success points for Microsoft amid broader questions about its strategy and especially monetization among consumers going forward.
via Microsoft might add ‘game mode’ to Windows 10 for maximum gaming performance – The Verge