Fake News: Microsoft to End Surface in 2019?

Posted on October 5, 2017 by Paul Thurrott in Microsoft Surface with 54 Comments

Fake News: Microsoft to End Surface in 2019?

Don’t believe reports that Microsoft is planning to shutter its Surface hardware lineup in 2019. That is just speculation and wishful thinking.

I want to be very clear about this. There is nothing in these reports that claims to have insider information that Microsoft is planning such a move. Literally, what we have here instead is a single market researcher who is reading into how he believes Satya Nadella will behave. And a few representatives from PC makers who are clearly still burned that Microsoft has shown up out of nowhere to compete with them and show them how to build nice-looking PCs.

Of course, this is Microsoft and anything could happen. But these reports, these things that people are so worried about today, are just fabrications.

So breathe. Relax. And let’s look at the reports.

According to the ever-reliable Register, the CEO of Canalys, a market research team I never reference, said that Microsoft would exit the Surface product line because he is a “software guy, a cloud guy,” He also pointed to the demise of the smartphone line as corroborating evidence.

“The Surface performance is choppy,” he said. “There are good quarters and bad quarters, overall they are not making money. It doesn’t make sense for them to be in this business. When the capital expenditure challenge that Satya Nadella has taken Microsoft down becomes visible to Wall Street, everyone will ask him ‘Why have you gone to a low margin business?’ [Microsoft will have a lot of cost-cutting to do, he claimed, and] Surface will be the first target.”

To be clear, that is just an opinion. So we all have those. What else happened?

The Register also notes the following statement by Lenovo corporate president Gianfranco Lanci, from the same event.

“Microsoft is making a lot of money on cloud, making a lot of money on Windows and Office, but losing a lot of money on devices,” he said. “And frankly speaking, it is difficult to see why they should keep losing money. For them it is a very difficult exercise to run hardware products business, they need to be careful about every single detail as the margin on this is so thin.”

So, this is also an opinion, and this time from a representative of a company that is both a competitor and a partner with Microsoft.

The thing is, are Microsoft’s hardware initiatives really all that expensive? Phone was, but only because it owned all of the factories, manufacturing facilities and employees, and their expensive European benefits packages, that came along with the Nokia acquisition. With Surface, Microsoft has none of those issues, or those costs. This argument seems specious to me. Worse, actually. It sounds like wishful thinking from a competitor in the premium PC space.

What else have we got?

A Dell guy claiming that Microsoft may “slow down” Surface a bit, which I’ve argued they’ve already done.

And that’s it.

Guys. This is nothing.


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Comments (54)

54 responses to “Fake News: Microsoft to End Surface in 2019?”

  1. matsan

    ”With Surface, Microsoft has none of those issues, or the costs”

    You conveniently forget the write-downs in the billions in 2014 and 2015... I guess there is plenty of non-activated R&D costs lurking in the balance-sheets as well... Just saying...

    • webdev511

      In reply to matsan:

      Surface as it is today is a long way from the Surface RT boondoggle. On one hand they HAD to start working on Windows on ARM. On the other hand they built too many. So the R&D isn't a complete write off, but the ARM based hardware was.

      That said, I just wish things like Surface Studio were based on current hardware with at least the option to give them some real power under the hood without invalidating the warranty.

    • Polycrastinator

      In reply to matsan:

      There's a sunk cost fallacy where we keep throwing good money after bad, but there's also the opposite, where you look at large previous losses, compare to a business that's making money today, and say "this business isn't profitable." Not really. If they're making money today, who cares if they lost a ton of money getting up and running. Killing a profitable business doesn't get you that cash back, it just throws away the investment you made.

  2. mikiem

    Well, it's something to talk about, & the press Canalys is getting certainly has gotten their name out there, and for free, rather than having to pay for all sorts of advertising. Down the road there are going to be people who don't remember where & why they heard of Canalys, but the name will sound familiar, hopefully from Canalys' perspective, giving them an edge over companies whose name is a complete unknown. 

    As far as Canalys' logic goes, there really isn't any... I've seen nothing hinting that Nadella, or any exec at Microsoft really, ever expected their Surface line to generate huge profits while dominating the marketplace. They knew it would be a low margin product line with more than plenty of potential pitfalls. So what changed? Vista is often considered a failure because it never fullfilled Microsoft's expectations in the marketplace -- with Surface that's obviously not the case. 

    Now consider Lenovo & Dell. Neither is going to bring a PC, laptop, tablet, or 2-in-one to market that they don't think will make them money, & hopefully lots of it. They may or may not be privy to Microsoft's reasoning & strategies with the Surface lineup, but it's not their prime focus -- not something either company would likely ever be interested in -- so they commented on the future of Surface from their company's perspective. And as Paul noted, anything these guys say publicly is going to, in their mind, benefit their respective companies. 

    What will decide the future of the Surface line, and any other Microsoft product for that matter, is how well it's meeting their expectations -- how close it's coming to *their* goals. And there's definitely more to it than simply dominating whatever market &/or market niche, e.g. Bing, Cortana, Edge etc. While we can [and will] debate &/or argue those goals, as Paul wrote: "This is nothing."

  3. ChristopherCollins

    I actually believe this one... Microsoft as any type of consumer ecosystem is over now.

    Makes me sad. I have pulled for this company, bought their tech, and tried to use their services. I'm down to O365 (which will stay) and XBox Live.

    I ultimately think it is a mistake, but everything they were ahead on, they either gave up too early or showed it off and let everyone else catch up while it stayed in R&D forever being 'improved'.

  4. GT Tecolotecreek

    MS is a for profit corporation.

    Profit matters more than anything else.

    Why would they continue to make product(s) that lose money?

    If the sales trajectory continues it's current path, Surface is gone by 2020.

  5. Tsang Man Fai

    While OEMs have obviously improved the standards of Windows devices they have made in recent years, the surface line-ups still stand out. My school requires every student to purchase a Windows 2-in-1 tablet. Over 80% bought a Surface Pro 4. Only a small percentage of them bought HP/Lenovo 2-in-1's. OEM devices should sell much better than Surface in the enterprise. However, without Surface branding, there will be more people losing trust in Windows and this will affect the sales of OEM in the long run. People have choices today - Mac, iPad, Chromebooks. If MS does not keep on building a better image of Windows PC, even their enterprise market will collapse. So it would be too stupid if MS abandons Surface.

    Windows Phone is another story. While it is sad to see MS giving up the phone business, it is just a strategic move. They are too late to the game and it is the time to give up. Is it too late for MS to save the PC industry with the Surface line-up? I don't think so.

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  7. Ugur

    I wonder if these rumors are spread by random pseudo journalists who just want to have something to write about that gets people riled up (and i don't mean Paul, he just reports about those rumors already floating around) or by people outside MS who'd like MS to leave the hardware business or by people inside MS who want MS to leave the hardware business and test the reaction of the public.

    No matter which is the case, me personally, i feel like it would be a HUGE mistake by MS to leave the hardware business regarding own laptops/desktops/convertibles.

    You know what is Microsoft's Nr. 1 mistake to which most of their failures can be boiled down to?

    Lack of consistence and lack of sticking with something until perfecting it when they actually have something with potential in a field.

    Seriously, look at all their failures, it almost always can be boiled down to this.


    Yes they were late with the Zune to MP 3 Players, but just when they had one which was pretty nice in comparison, instead of releasing it worldwide, they cancelled it.

    It could have been pushed further to a pretty nice own phone years before they were late to have an own nice phone..

    (One could argue MS never had an own nice phone because they misguidedly bought Nokia in a trojan horse move and tried to kill off that company's DNA and make them make MS phones instead of actually designing own DNA cool MS phones themselves and letting them be manufactured by Foxcon etc like the others do).

    Microsoft band, sure, it had a design flaw in that the band was not durable enough but the device had potential and sure was nice, what about releasing it worldwide and actually sticking with it a few iterations when you're just starting to get it cool and liked with gen 2?

    It was a sleeker smartwatch than the Apple watch i and many others would have totally bought if, you know, it was actually sold in most countries, which it wasn't.

    Windows phone, one of the best examples: If they had not rebooted it from zero every few iterations, they could have climbed up from 5 to 10 to 15% market share instead of dropping to zero each reboot of the platform until having lost all reasonable people's trust in the platform the second or third time they rebooted it over.

    (And yes, as i said, misguided to buy nokia and manufacturing instead of designing the device and letting it get manufactured)

    Or Kinect, where they had tech years ahead of others which had and still has huge potential for the future but they thought of using it for targeted advertising as one of their leaked docs showed and then released V1 cut down in precision and pulled out fully quickly when someone made a pedo joke about Molyneux' game for it and on top it made the new xbox more expensive.

    Instead they misguidedly changed the well working voice control stuff to more annoying to use cortana stuff, cause sure, why be consistent with something that works well.

    Or Skype, which they reboot with their latest UWP or other nonsense over and over and basically each time making the app worse and worse. Like, to the degree and in so many iterations where one has to wonder if they intentionally sabotage themselves.

    And when you change something fully over, you should ask yourself if it is better than before in usability and overall, else not reboot it yet again and instead with consistence improve what you have.

    Same story with XNA and Silverlight and pretty much most of their developer platform efforts in the last 15 years.

    One can still darkly remember Balmer yelling developers, developers, developers, but if you constantly reboot your designer/developer tools/platforms every few years instead of pushing them further with consistence, of course at some point no one fucking gives a shit (to put it bluntly) when you put yet another one out (which is on top more limited and walled garden) like UWP.

    It is just such a typical completely misguided move again to want to declare win 32 / x86/ x64 desktop apps and games (99% the reason why people use windows running machines if not 100%) and want to push UWP instead.

    Look at how to do it properly by looking at what apple did. Did they get rid of regular macOS apps? No. They stepwise improved the packaging and delivery and each time allowed users to use the existing ones still and offer developers an easy upgrade path to push their apps to the next level.

    Also one can just use a macOS desktop app (for most) by just downloading it and dragging it into the apps and delete it by moving it to the trash. And one can get them from anywhere and launch if by clicking the icon. So that's the part users care about and what MS should get going.

    Why can't i do that all with UWP/Containerized apps? back to the drawing board there until i can.

    And sorry, it is just so stupid that they don't let one containerize win 32 apps with nice one click button ui to turn them into containerized "more safe" "less intrusive on user's system" apps one can still launch with click on the icon it should have or push them to the store apps and that way make way more people push apps into the store.

    Heck, why don't they also allow anyone to put non containerized apps into the store, too? Just have a different label for containerized and non containerized apps/games.

    At some point it comes to the state like we are in now, where after years of no consistence in many fields where, have a look at a longtime enthusiasts of all things MS like Paul Thurrott and one can hear a clear bitterness in his words when he talks about MS topics all that often, clearly seeing it like it's more likely MS will do 1-2 failed attempts in most areas and then just pull out of it if it didn't work in that area by then.

    I feel like MS needs some people at the top who tell them what to push further with consistence and what to cancel and what to change and what not to change.

    And i also feel like MS needs to do changes which foster consistence and making them trustworthier asap, because at this point such mistakes span so many products and categories that they are meanwhile seriously loosing a lot of trust for their entire brand.

    And if you are not trusted as being longtime reliable for anything, well, that's the end for you no matter what you try to sell.

    Now that introduction out of the way, let's get to the surface devices and their current state:

    I will not rose tint anything there, i had a surface Pro 3 and sold it because i had bought the high end version and it had so many issues in software/drivers, that it was just not acceptable to me for a device i had paid a bunch of money for.

    And, as we know, each generation of Surface Pro and Surface book up until the very latest had various issues in either hardware or Windows 10 or drivers or all.

    One could also say if MS wanted to get the pc makers to make (more) nicer devices, that push has worked out.

    So should MS pull out of making own devices then? One could argue their own ones had some issues for several gens and if the main goal was to get other PC makers to push harder, that seems to have worked out.

    So time to pull out in yet another category or all?

    No, absolutely not, that would be a huge mistake, like all those others.

    MS does usually not get things right in first iteration, often not in second or third fully either. But they usually are onto something in many fields, often even ahead of their times and ahead of what's the reasonable best package to do right now, which often is the reason it is not perfect in iteration 1-3.

    But if they actually stick with something good and expand on it instead of giving up or rebooting it from zero every time, usually over time, they actually make it great. And if they don't, others do it.

    See Kinect, they released the first version cut down and gave up on the second iteration quickly mostly.

    Now what happened? Apple bought that company and touts it as revolution in their phone to have included a small version of what that company made.

    MS could have been the company with a cool smartphone with such kinect sensors years earlier, if it wasn't for some such misguided decisions earlier.

    MS has been years ahead of others with their AR headset, but instead of being consistent in their progress on it and releasing a V2 which cost a bit less, was a bit better in some specs, no, they talk crap about skipping a gen and releasing a gen 3 as gen 2 after missing out a year.

    Like, who in their right mind is driving such decisions?

    Even if i was into paying that much for a dev first gen device, why would i want to buy last year's version when i know they could have released a (even if slightly) better one this year but now will not do it to do it next year.


    Meanwhile others are releasing cut down phone AR and since MS has nothing new this year in this category, some misinformed people then even talk about Apple being ahead now because you don't need an extra device for it and can just use the phone you already have.

    (While that is misguided because Apple is still behind and working on their own headset and phone based AR while fun and even useful still means you have to hold your device out in front of you all the time which automatically makes it a no go for many use cases, actually most of the use cases where AR would be most useful and will be in the future)

    With their surface devices, they are just starting to become good and reliable enough in not just hardware but also win 10 and drivers and general software control, that it would be worth buying them (again), even for people like me who got burned with earlier iterations and are more cautious now.

    That is a huge achievement by itself, that the stuff becomes so good that they would win me back.

    And with some devices where they are not fully there yet, they are very close to being fully there.

    The surface book is a great aspirational device, but it had that gap there for the lid, and it had issues due to that connecting/disconnecting/two gpus aspect. So get rid of the gap and either fix those software issues or make it all the time connected and just keep allowing to flip the screen over for it. And make it your high end laptop where one can flip over the screen with highest end spec and screen size options. Hint: if it does not have the standby/battery/sleep issues anymore and i can flip the screen around and there are 15 and 17 inch versions with high end nvidia gpu, you have another buyer there, actually many.

    And sure you want to sell the devices at a profit, but your profit margin has to be reasonable. You don't have the trust/reliability/brand credit yet, so while you build it up, your profits have to be there but smaller.

    You can't go for 30-60% profit margin like Apple already can. You have to build up deserving that and people trusting on you delivering over several reliable iterations before you can increase the profit margins further.

    Something like the surface book, studio, laptop, are too high profit margin right now regarding that.

    The surface laptop would sell much better for example if the mid spec was the base spec and sold for 999 or less and one could toggle win 10 s on/off any time and by default it was turned off.

    if you make it toggleable anytime on per user account level, guess what, people might see it as feature instead of a a stupid walled garden attempt where one recommends to switch away from asap while one can for free.

    The surface studio is from the overall device design a very nice device but should be usable as external screen option, too and should also have high end state of the art spec options and cost a few hundred less.

    You have the most forward facing, best all around all in one device design there, now the internal specs have to match that, too, then you have the allinone which makes all others seem like a weak sad joke from the past.

    And yes, push to release that this year, not when your specs are already outdated again 2-3 years later because you wanted to make x fancier or squeeze all into too tiny base or whatever noone cares about.

    (You can put more powerful hardware into the screen or make the base box have more depth)

    The surface laptop, again, is neat but the base model should have the specs of their mid spec model at the price it has and one should be able to remove the alcantara thanks to velcro connection or similar and they should offer larger screen size and high end spec options for it, too.

    Windows 10 S, again, should not be a destructive switch option but instead a setting one can toggle per user account as admin account level user at any time so one can for example turn it on for kids or pupil accounts while keeping all the desktop apps and games and full windows pro functionality for the power users in the family/company.

    That would be a big selling point for both the device having 10s option and also windows 10 s itself, too as more secure mode when you want to toggle it on for some users.


    So in hardware they are not fully there and in OS and software they are still misguided to some degree.

    But the hardware is actually quite good by now after several iterations and for several of the device categories so good, that it is very close to the device i would totally buy and recommend as the ultimate device in that category if they would only address these 3-5 things for it.

    So it would be insane for them to give up on it at that point when they are so close in each category to the device one could totally recommend to everyone as the best in that category.

    MS has to get the last 10-30% right in each field, not give up and/or reboot each time they are at 70-90%.

    And those thinking: MS is a cloud and services company now, or wants to be more and more, they don't need to do (hardware) products facing consumers anymore, well, that's just total nonsense and anyone pushing for such things is completely misguided.

    First because their OS and drivers only get better if they also eat their own dog food and see the issues earlier and fix them earlier and better for all manufacturers.

    But then also because many of MS' software and services offerings are only appealing if those customers are using either MS' OS or MS hardware or ideally both.

    Why should i buy/subscribe/use MS anything if the entirety of the rest of my eco system is by <other ginornmous company x>

    Recently there was a discussion in a thread somewhere by some fellas i know who are much younger than me, just entering University. The talk was about what was the recommendations for what to use in Uni to take notes, collaborate, do your Uni stuf in general etc.

    Common suggestions brought up were One Note, Word, Google Docs, EverNote, OneDrive, Google Drive and some other software/services options and Chromebook, Surface Laptop Or Pro, other laptops, iPad etc, too.

    It was very interesting to me to follow that discussion.

    You know what ended up as bottomline winner combo most recommended? One Note, One Drive, Word, Surface Pro.

    Because all came to the conclusion that word was needed enforced for some things, One Note was handy, then when using those using them with OneDrive made most sense to them and then they liked taking notes and having full desktop OS capability with Surface pro, and there you go, they picked the whole package.

    Fascinating to see how basically a whole grade of Uni starters picked the whole MS package there because each made more sense when also using the others already anyway.

    Now take one aspect of this away after the other, what do you end up with?

    Suddenly none of the MS offerings make more sense over the total package the others offer then.

    It would also be extra misguided insanity when looking at how Apple and Google are being so successful by exactly pushing vertical and all around integration further on all aspects. Like maybe rewatch the latest Google presentation and you'll see it is all about that in every detail.

    MS needs more vertical integration and consistency and building up, refining and making the best version of things instead of less of that.

    This one's for free for you MS, use it wisely.

    • sandeepm

      In reply to Ugur:

      Lumia screens: best super super high def oled in town. Replaceable battery... dual SIM ... external storage. Fucked up OS. Missing quality control on os... the writing is on the wall, this is just someone venting out. Long live the new ceo

  8. DeejaySpinn

    Not only is this a sigh of relief, but by the same token, I had a big feeling it was some sort of fake news. I strongly believed that guy (along with a lot of other fake journalists), just made that story up for publicity - or he was probably an unfortunate one to have a faulty Surface. I'm sorry, but I hate people like that! The Microsoft devices are IMO the best in the business! And with time, they can only get better. My only thing against Microsoft was why did they take so long to get in to the hardware business. But again, I'm glad they did. I've always been a Windows user, and own a Surface Pro 4 (which is what I am using right now).

    IMO, the Surface Pro 4 has been the best device to date (I haven't tried the newer model(s) yet), and like I wrote above, it's what I'm using right now to write this, and I use for just about everything else, from DJ'ing to recording music, editing photos, you name it. High-five to Microsoft! Keep up the good work!

  9. melinau

    It would be a shame, but I'm not sure MS actually NEEDS Surface any more. Personally I love The SP, and the new Laptop. Both are Premium PC products, and this is somewhat at odds with the way the world is going.

    Without much effort Google & Amazon are going to be able to offer seamless interconnectivity between their SpeakerAI systems and usable applications for emailing WP etc. For consumers, the resulting inputs can be shown on their Tablets or TVs. At that point the traditional PC becomes a bit of an anachronism, and Windows more so - for most consumers, and potentially many businesses.

  10. Jules Wombat

    Its pretty clear that the Surface Brand is being diminished by Surface Book and Laptop, so those devices will be chopped as not offering anything distinctive. Only Studio, Pro and Hub will be retained beyond the next iteration.

    Once the Surface business profits continues is slide below $1billion, Surface will be dumped by Satya. Its just business sense guys.

  11. polymath

    Microsoft Surface was "launched" .. Surface: October 26, 2012 -- 2019 ,, that's 5 years?

    If they are launching "all ways ON 4G LTE" snapdragon ARM x86 emulation machines this year (2017) then two years winding down the existing INTEL surface machines dose't sound so far fetched.

    look on YouTube,,, this is a year ago and windows mobile,,, Today it could easily be windows 10 s (x86E) -- "HP Elite x3 with Microsoft Continuum and Snapdragon 820 is world’s first 3-in-1"

    if you were moving away from ...INTEL surface .... technology, you would phase it out too

  12. polymath

    Youtube "Full Windows 10 on ARM 64bit 10nm Qualcomm Snapdragon 835"

    LISTEN to the first few mints of the Qualcomm representative, he tells you all the machines which have been designed by HP, Asus & Lenovo, the Formats of those machines, bigger batteries, more functionality built into the SOC "system on a chip" .. etc. Then to a rather ..slow journalist he demonstrates the emulator ( note 32 bit ).

    I think the end of the range known as "Surface" in 2019 is on the books.

  13. polymath

    one last observation, "...all ways connected to the internet ...."

    Chromebooks get all there systems power from the CLOUD ie, racks of servers & they are all ways connected to the internet

    the new ARM based windows machines, with there on board 4G LTE, will be "all ways on .. the internet"

    just like Chromebooks

    This will allow Microsoft to wind down the operating system knows as "windows" to a cloud based system like google has with its Chromebooks .

    further as web based applications gain ground with WEBASM to give them near native speed of operation locally combined with the power and reach of the cloud systems, the need for complicated local operating systems will start to decline.

  14. Maelstrom

    I do believe Microsoft must keep burning cash on hardware at least till they have a device that will put them back on the saddle in the mobility market (i.e., a pocket PC à la 'Surface Phone') in order to get OEM's inspired and stay relevant.

    In other words, they do need to demonstrate, with at least one device, that there's a future for Windows in ultra mobile scenarios. In other words, a device that can replace a smartphone, a tablet and a laptop. And no one will do that for them. Otherwise, they are going to end up being spanked and ultimately crushed by Android/Chrome, even on the desktop.

    IMO, this is vital for them to stay relevant or they are going to fade away in the background à la IBM.

  15. MeaditatingAmigo

    I don't care what Microsoft does in hardware any longer. I used to be an ENTHUSIAST. Now, I've just LOST MY FOCUS.

  16. ayebang

    I do believe in Lenovo and Dell due to they are talking the truth.

    Now they are direct competitors with Surface in between.

    I think they (Lenovo and Dell) do not lie about Surface as both are good men really. Nothing else.

    Do you believe what your competitors mention about you ?

    I am clever to know that both said the truth, not jealous at Microsoft on its successful Surface line.


  17. ayebang

    Nadella used to kill Win phone and he wastes 1 month to do so. Microsoft released no new phone, new line of aceessories before that.

    What about Surface ?

    Microsoft release new line of products all the time...ummm Will they shut it down with this.

    Micorosoft just release new Surface which is the best Surface tablet and overcome many minor fixes in the past...Ummm Will Microsoft kill all of it ?

    Microsoft has just sold Surface with high margin same as McBook..... Will Microsoft abandon this high end market which they has just won ?

    Nadella used to say when we make software we also should make hardware, too.... It is true he used to say this.

    Ummm All Apple fanboys here just spread this rumor quickly due to next quarter sales of new Surface will show how high New Surface is. Hahaha

    • sandeepm

      In reply to ayebang:
      I bought Lumia 950 XL the day of release from Microsoft Store in Eaton Centre. You guessed it right, there was not a soul, no one there to buy it other than me. When I brought it home, I was (unpleasantly) surprised that I spent $1100 on a phone that came with a cheap plastic cover. Then I had to spend an extra $60 to buy a champagne leather back cover in order to not feel ashamed of my latest prized possession. Few months later I bought a 950 from Microsoft Store online as that is really what I wanted but on launch day they only had the XL. Interesting part is that the XL was not compatible with the Nokia charger as the location of the coil was too high. This was sabotage, after firing all the 30000 testers, they had no one to look into these subtleties.. I managed to get it to work by shaving off the rubber bridge from the Nokia charger. Just some thoughts on what massacre occurred after the sabotage began.

      And no one talks about it, but we shareholders need to know about the patents from Nokia. Were they part of the deal and how did HMD get them? 13 billion, can you believe it, And no patents????

  18. akarpo

    Is Windows on ARM launching this year? They've been decidedly quiet on that front since BUILD, which was awhile ago.

    I have a feeling they're going to wait until the next BUILD to launch devices.

  19. sandeepm

    You know what, this might be a fact. A week or two ago, I would have refused this theory vehemently. But since the announcement on the demise of Windows mobile operating system (which also puts a question mark on his favorite feature: continuum), I would not be too surprised. After all, that reporter is not a journalist trying to draw crowds to his news channel or site. That is what I call fake news, when someone is simply trying to capitalize with clicks by creating a new sensation, from incorrect information, in order to make dough. On the other hand, our guy seems to want to concentrate on the cloud and does not like Windows and hardware. Remember... he renamed Windows Azure to Azure. In the end, he might succeed by walking out on direct consumers but can you imagine that market being anywhere close to what apple and google and the likes are on to? 'Poor' Bill Gates (not intending a pun here), all that wealth that he created selling direct to consumers?

    Wishful thinking: Microsoft will be back with OneCore handheld devices next year. OneCore is not dead yet. There will be handhelds and tablets and embedded running Windows again.

    In the meanwhile, I realised that Blackberry Launcher on Keyone is far more sophisticated than Arrow. Thanks for the tip to not assume that all Microsoft software on Android is the best. Once I paid attention to the Blackberry Launcher, I realised how thoughtful they have been and how clumsy Arrow really is.

  20. nbplopes

    Considering Surfaces, at least in Europe, are easy easy to be seen on shops, MS tried to pull an Apple, iMHO there is a potential for a political backlash with consumers if they drop it.

    But here is another view I would like you guys to consider.

    The public perception of the lack of innovation in the PC space, prior to 2009 up the SP3 line, even in the circles of high profile tech journalists, was mostly down to OEM's not wanting to innovate on top of Windows.

    I was in the field of those that did not think so. I was in the field that believed sOEM's were hand strapped by MS roadmap for Windows and its implementation. The evidence was companies like HTC offering their own stance on top of Windows Mobile and UMPC. But the thing was mostly choppy in comparison with what came after.

    I think if we observe what happened with both Windows Phone and more so in the Surface line. its that the capabilities of MS in the context of what its required to offer robust innovation in the device / software space, not just gimmicks with potential, was way overhyped by its own marketing. That reflected for instance in Surface history multiple ways, down to the latest report about its reliability. But look at how much MS had to change in Windows 10 from Windows 7 to be in the playfield of mobile innovation.

    Furthermore, its quite clear that OEM are a fundamental piece to make Windows robust in the device!!!

    I think MS needs to keep on muscling these capabilities and for that what more profound way to do it than actually building end to end products? Not just stuff that stays in labs?

    Yes, MS may be loosing money if we consider the Surface line has a business, but on the other hand if you consider it has an investment in the Windows ecosystem, in MS capabilities in the point of.contact with the user, just a pure financial analysis on losses vs gains in context does not work. How much independent is the Office 365 is from Windows? Consider a world that Windows would be dropped next year how much of impact that would have in Office in the prosumer space and Azure business?

    If we look at the Fall Creative Update, I think its clear that the next phase of Windows 10 its kickstarting. A phase marked by use case integration across multiple devices and platforms. Take for instance the Timeline feature promising a historical vision of actions taken by the user across multiple application. But for this to work, developers need to use MS API's in their apps, regardless if the app is to be used in iOS, Android or Windows. Not only that, the user needs to be logged in the app with a MS account. But if you look at 99% of the apps to day, when you create an account, only two third party account mechanism are offered, Facebook and Google ... ... Where is MS?

    If they could not give uses unparalleled integration on things they control end to end, is it believable that they will pull it off in things that technical control is far weaker? While people are advising MS to pull far from the device and focus on the Cloud, Google is doing precisely the contrary with the Pixel line. They know, if the Cloud its to be successful in what is to come, presence its fundamental for internality acquiring capabilities. Why is the MS Android shell yet so unfunded and uncertain? Will it win over default Android shells? How will Google react if and when it gets popular? And that its a big If.



  21. skane2600

    I doubt that the Surface line will be halted in 2019, but it's more credible than reports of a Surface Phone.

  22. WP7Mango

    Just to add, how long did it take for Xbox to become profitable? And they never quit that, did they?

  23. JacobTheDev

    A few years ago, Surface was a billion dollar business. I highly doubt they're going to kill it off any time soon.


  24. markbyrn

    The real story should be OEM partners are critical of Surface despite Microsoft playing up Surface as a competitor to Apple.

    • carlrhorn

      The OEM's aren't selling much product out of the Microsoft Stores so I can see why they would be critical. Right now 20 Surfaces are sold for every OEM unit at the Microsoft Store in White Plains and that may be generous. The great news as I see it was the fact that A. More people were in the microsoft store than in the apple store and B. The kids and young people were choosing the surface pro and surface laptop over the same apple products..That store has been open for about 5 years now and that was the first time that I saw the Microsoft Store have more foot traffic than the Apple Store and this was from about 3:30pm until 8:00pm on a Saturday Night!!!! To get to your original point if I was an OEM I wouldn't be very happy with Microsoft either as they are eating their lunch right now...

  25. straker135

    You make a good point Paul but you can understand why this 'report' might get a lot of undeserved traction. The herd is skittish after the lightening stroke of Groove abandonment. I know the app will continue to be available but there is a strong impression of a steady Microsoft withdrawal from the consumer space which has us spooked. Rumours like this come at a bad time and might trigger a stampede if we don't, as you advise, take a deep breath. The upcoming hardware announcements at the end of the month might have a settling influence if there is any substance to them. You have your ear to the ground Paul. Anything interesting coming up apart from possible (needed) refreshes of Book and Studio? Surface ARM device with LTE perhaps? The rumour mill is unnaturally quiet.

    • leops1984

      This. Satya Nadella is on thin ice with Microsoft fans when it comes to the consumer space in general. Even if the story in this case is false, the fact that is plausible in an of itself is an indication of where Microsoft stands right now.

  26. mjw149

    It was a poorly sourced article, typical of that blog. Surface just added Studio and the ultrabook, there's no way they're doing an about-face so soon.

  27. Bdsrev

    If they kill Surface, I honestly believe it would be one of the biggest mistakes Microsoft has ever made. I myself would buy an iPhone and Macbook the very next day

  28. Elan Gabriel

    While easy on the eye, they are more of a demo computer than a real one. If you're into that high end PC, most likely you want more control for upgrading etc. I don't believe they will "end the line", but I don't expect them to introduce a new device either. They will probably kill the mixed reality stuff before.

  29. carlrhorn

    I can tell you this much. I am very close with the Microsoft Team at the White Plains, NY store. My wife and I spent about 4 hours there on Saturday. Microsoft would be absolutely insane to discontinue the Surface line. For the first time since I have been visiting that store (I have been a customer since the day it opened) there was more people in the Microsoft Store than in the Apple store at that particular mall. I will also go on to say that the vast majority of the people in the store were young people (under the age of 30). The kids (18 and younger) were going crazy AND BUYING the surface laptops and I was told they really can't keep the blue and burgundy in stock. Surface Pro's and gaming gear sales were also up. For the first time in my life I tried both VR and MR. In my opinion that will indeed be the future. I was also told that 95% of the people that walk into the store interested in a laptop or tablet don't even look at the OEM table. They want a surface pro or the surface laptop and sales are phenomenal according to those folks. My personal observation after my visit to the Microsoft Store is that the surface pro, surface laptop and video gaming hardware and gear is what is selling. The big push I see coming from microsoft will be gaming computers, virtual and mixed reality headsets and gaming monitors. I can see them using the screens from the surface studio as gaming monitors and selling them separately. The bottom line is I don't see any possibility of Microsoft pulling the pin on it's surface line of products. On a final note...I spoke to 2 employees who spent a week out in Redmond and both of them are convinced that some sort of mobile computing device that can make phone calls is in the works...Take it for what it's worth...Just to make it clear I am not drinking this cool aid anymore and spoke to both Brand & Paul at a meetup this March at the Rattle and Hum regarding the death of microsoft in the phone market. I even had to eat crow and tell Paul he was right. I hope your enjoying the Lehigh Valley Paul and that your daughter has adjusted to here new school. I am the big blond haired funeral director with the crew cut...Hope to see you at the Rattle and Hum when you visit next week...

    • hrlngrv

      In reply to carlrhorn:

      You do realize you're describing a phenomenon observed almost nowhere else. Statistics is a wonderful field. It teaches the foolishness of generalizing from individual observations.

      Enjoy your local MSFT store, but it may not be wise to generalize from it.

      • carlrhorn

        I am only telling you what I have seen and what my experience has been there for the last 5 years....Take from it what you will and I am well aware of how statistical analysis works and I am no fool...I guess we will see when the next quarterly sales report is released...

        • hrlngrv

          In reply to carlrhorn:

          If you've been seeing this in your local MSFT store for 5 years, but MSFT hasn't been breaking out stellar financial results from their brick & mortar stores, how exactly would you interpret that in terms of how well their stores as a whole were doing?

  30. Chris_Kez

    Unfortunately we don't know much about the context of the conversation, which makes it a little tricky to evaluate some of these comments. Also, with all due respect to Canalys CEO Steve Brazier, I'm not sure he fully appreciates the strategic mission of Surface. To be fair, given how small Surface is relative to the rest of the PC market (let alone the smartphone market) I doubt that Surface is high on his list of analytic priorities. If he was watching closely then he'd probably offer a better or more incisive summary of Surface sales performance than "up and down". Not to sound like a Surface apologist, but the uneven release/update cadence (which has lengthened) has a big effect on YoY comparisons, and the fact that they have a very small portfolio of premium products competing (without really competing) in a huge and diverse ecosystem (that is itself shrinking) means they're not going to have huge absolute sales numbers.

    But it costs him and these other folks absolutely nothing to make a bold and provocative claim that few people will remember. I can tell you that analysts get it wrong much more often than they get it right; but people tend to forget (or ignore) all the missed calls. You only need to get it right a few times to be considered a genius, so why not go for it?

  31. glenn8878

    Maybe wishful thinking, but not far fetched. Thinking Microsoft Band is latest to bite the dust. Then there’s Groove. As long as Surface is focused on the Enterprise, it might survive.

  32. Waethorn

    "Microsoft’s hardware initiatives really all that expensive? Phone was, but only because it owned all of the factories, manufacturing facilities and employees, and their expensive European benefits packages, that came along with the Nokia acquisition. With Surface, Microsoft has none of those issues, or those costs. This argument seems specious to me."

    HUH?? None of the PC OEM's do their own manufacturing as it is. They don't own factories...Lenovo even still leaves out-of-warranty parts supply to IBM, because they don't want to purchase IBM's storage warehouses, which are both massive, and collect A LOT of dust. These are just shell companies with executive boards and a phone number. Everything about these companies is contracted out - in-warranty service, out-of-warranty service, manufacturing, packaging, phone support, etc. And yet, they're already crying the blues over razor-thin margins since IBM, Gateway, Packard-Bell, Samsung, Toshiba, Fujitsu, and even HP have a) talked about leaving, b) are in the process of leaving, or c) have already left the PC market.

    And you think Microsoft can show them how to lose less money after the OEM's own years of experience? Get real.

    • hrlngrv

      In reply to Waethorn:

      MSFT took that segment of the PC market willing to pay MSFT $1,500 for devices for which they wouldn't pay OEMs more than US$1,000. OEMs have always made high-end PCs, but they're known to few people and bought by even fewer.

  33. dhallman

    The interesting part about all of this is that Microsoft's own actions are leading to a lack of faith in the marketplace. By killing phone, retreating from Win 8.1 to Win 10 (back to the start menu from a touch centric experience), killing band & groove and the issues that came with Surface Pro 4/Surface Book - Microsoft has opened the door for these rumors and insecurities that result in a public/business exit from Microsoft hardware and services. As Microsoft burned the police that ordered Windows phones and HPs Elite X3 on their way out of phones and turned away from countless fans and customers on music and band - businesses and consumers everywhere will question their partnerships and renewals with Microsoft in any questionable division. Including Surface, HoloLens, Bing, Cortana, Xbox(?) and Mixed reality.

    There is a price to pay for changing strategy from embrace and extend to trial and exit. There may be more to pay yet.

    • skane2600

      In reply to dhallman:

      Had MS limited the touch-centric approach to the appropriate part of the market, they wouldn't have had to walk it back (Of course the Win10 Start Menu is not the Start Menu users wanted back anyway). Windows 10 also has UWP which is just a refined version of the Win8 metro apps that most desktop users rejected. If MS had offered a free upgrade to a new version of Windows that was in the spirit of Win7, I suspect it would have been at least as popular as Win10 if not more.

  34. ayebang

    one thing for sure Apple fans will surge this rumour as fast as they can.

    In addition, New Surface 2 is a lot better than McBook Pro with same price.