Why is Microsoft CEO Satya Nadella pulling his pubic hair out?
Kiddo, I suggest you look to your left.
Does it look like the bald coot has any hair left on his head? 😉
Now the reason Nadella is pulling his pubic hair out – and if he isn’t, he should start anon – is that the man has no clue what to do to get people to buy Microsoft’s Lumia smartphones.
Quarter after quarter, the public continues to raise its collective middle finger at Microsoft’s smartphones.
The smartphone battle is between Apple’s iOS platform (iPhones) and Google’s Android software (Samsung, LG, Xiaomi, Huawei and dozens of other firms make Android phones).
For its fiscal fourth quarter ended June 30, Microsoft sold a mere 5.8 million Lumia smartphones (mostly low-price point Windows Phone devices with presumably low margins).
During the April-June quarter, Microsoft also sold 30.3 million Nokia feature phones but those are not important because Microsoft is defocusing from the feature phone business given their pathetic margins.
In almost the same period, Apple sold 35.2 million smartphones, mostly high-end iPhone 5S devices with high margins. And that’s during Apple’s slow June quarter and more so when the public is awaiting the launch of the new large-screen iPhones.
Smartphone Revenues – Apple vs MSFT
Apple’s revenues from smartphones in the quarter ended June 28, 2014 was $19.75 billion.
Microsoft’s total phone hardware business contributed just $1.99 billion in revenue.
Phone hardware revenues for Microsoft include Lumina smartphones and non-Lumina feature phones from the Nokia Devices and Services acquisition.
Now bear in mind that most Lumias sold in the quarter were at low price-points.
Plus the majority of phones Microsoft sold were dirt-cheap Nokia feature phones in the developing countries like India, Bangladesh, Pakistan and much of Africa.
So I wouldn’t be surprised if Microsoft’s smartphone revenues in the quarter were less than $500 million.
And if my analysis is accurate, that would be so pitiful for Microsoft!
Beyond Salvage?
If Apple is selling seven times more iPhones than Microsoft’s Lumia devices, what should Microsoft do?
But for many, the 64-billion dollar question is: Can Microsoft salvage the horrible situation?
If you ask me, the odds are against Microsoft pulling off a miracle in smartphones!
Microsoft Executive VP Stephen Elop said recently that in the near term Microsoft intends to focus on the “more affordable smartphone segments” a.k.a. low end of the market.
If Microsoft couldn’t face the challenge at the high-end from the likes of Apple iPhones and Samsung Galaxy, the company will find it even harder to fend off the low-priced Android phones flooding out of China.
Among the low-end Android devices emerging out of China, there are some like Xiaomi that have built a solid brand image and reputation for devices with powerful specs at low prices.
Forget the sub-$100 smartphones from the ‘brand-less’ vendors! Microsoft will find it hard even to face down the likes of Xiaomi (btw, Xiaomi just launched in India).
Microsoft will not easily admit defeat but I suspect it will continue to limp along in the smartphone business with each quarter heralding more miserable news.
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Microsoft had a revenue of about 23 billion and made over 4 billion profit last quarter.
This is the real horror. Even worse their revenue and profit rose by 20%.
The fact that they are able to make this money while selling their shoddy products is most tragic.
Their continuing straglehold over the PC market is truly a scandal that no one in the tech world wants to talk about.
SearchIndia.com Responds:
Thank you for the sarcasm, sweetie!
Here I come! 😉
1. Post the recent stock split AAPL is trading at $96.42. MSFT is at $44.74.
2. Profits (Latest full year) – AAPL – $37.02b; MSFT – $21.86b (BTW, AAPL’s 9-month profit for current fiscal year $31.04b)
3. Sales (Latest full year) – AAPL – $170.91b; MSFT – $86.83b ((BTW, AAPL’s 9-month sales for current fiscal year $140.67b)
4. Windows PC business (MSFT) globally in decline. Mac/Macbook business is not in free fall globally.
5. Smartphones and Tablets are growing businesses. They’re also high margin businesses. AAPL rules; MSFT is irrelevant in these segments.
6. Smartphone & Tablet sales for latest full year:
MSFT revenue share – Insignificant; APL – $123b in fiscal 2013 (& $109b the previous year)
(Bonus: MSFT took a charge of $900m on Surface tablets last year; I’m fading but can’t recollect charges ever on iPads)
7. $100 invested in AAPL on Sep 30, 2008 would have grown to $431 on Sep. 30, 2013;
$100 invested in MSFT on June 30, 2008 would have declined to $87/$88 for the next two years and grown to $142.14 on June 30, 2013
8. MSFT’s businesses are under severe price pressure (both cloud and servers). AAPL is not under such price pressure despite Android’s growth.
9. Steve Ballmer got fired for a lousy job; Steve Jobs has been elevated to the status of God! I hear that people are making pilgrimages to his grave. No kidding!
10. MSFT just fired 18,000; AAPL is hiring (almost) everywhere.
Mon chéri, I agree MSFT is growing sales & profits.
11. But the writing on the MSFT wall heralds decline and decay.
Au contraire, the writing on the AAPL wall suggests growth and profits.
Caveat – I’m not a fan of AAPL’s business practices and that is the reason I’ve found a new alluring but occasionally difficult mistress in Linux.
I rest my case, Your Honor! 😉
Apple products even though, they are highly priced; most of them are worth it.
Windows is simply greedy in pricing it’s Products.
SearchIndia.com Responds:
You write: Apple products …are worth it.
And here’s the latest evidence of how wonderful Apple products are: 😉
http://www.independent.co.uk/life-style/gadgets-and-tech/apple-has-installed-security-backdoors-on-600-million-ios-devices-claims-security-researcher-9620480.html
If the news is true, there is no use in Buying Computing Devices for storing documents.
Just Switch to Paper Files for storing Important Documents and use Computing devices only for storing, viewing and listening to Multimedia.
SearchIndia.com Responds:
You write: If the news is true, there is no use in Buying Computing Devices for storing documents.
It is true, sweetie!
How much do typewriters cost? Just asking! 😉
Typewriters? No, Just go with the memory palace technique 😉
SearchIndia.com Responds:
In the U.S. today, there’s a tremendous anger below the surface among people that everything they say and do is being illegally monitored.
But it cannot be stopped because the livelihoods of tens of thousands depend on such monitoring.
Lesson – There are some roads you should never venture upon because there’s no going back. Road to perdition.
Bro, before 1990s, how people used to store information?
Whether you like it or not, in future we will, certainly revert to old times.
SearchIndia.com Responds:
I suppose pens and quills will soon come into vogue again!
Quite possible if a big rock from space crashes on the Earth.
SearchIndia.com Responds:
I remember reading that typewriters are becoming popular in some parts of Europe because of NSA snooping on computers.
Off-topic Response:
Just out of Hollywood film Lucy from French director Luc Besson – Very good. Limited shows today, wide release tomorrow.
My best new film of 2014.
Scarlett Johansson, Morgan Freeman & my favorite Korean actor Choi Min-sik (of Oldboy and I Saw the Devil fame).
Actors may be good, but Les besson is a crap director.
Until reviews come out, don’t waste bucks.
SearchIndia.com Responds:
I watched Lucy a few hours back.
It’s a good film.
I’ve seen three or four movies in which Luc Besson is either writer or director or producer. A couple of them have been reviewed/mentioned on SI.
One of Besson’s films Leon – The Professional was stolen by Bollywood and cloned as Bichoo (Bobby Deol, Rani Mukherji).
Greed is the invisible tail of human beings – that comes up with erectile functionality.
As you had rightly predicted earlier, Xiaomi has created a wave in the Indian smart phone market now.
They entered the Indian market in July, and started selling phones on 22-Jul-2014 through Flipkart.
Their stock was sold out within 38-39 minutes.
So, with Xiaomi offering such high value at a low price, and Motorola is also offering high specs at a relatively low price, Microsoft has no chance of gaining market share anywhere on the globe!
I think Microsoft needs an outsider as CEO and give it the right direction like Louis Vincent Gerstner did for IBM.
SearchIndia.com Responds:
1. Sold out in 38-minutes?
Wow!
Solid specs and cheap prices make for a great combination.
2. Xiaomi has also learned the art of hype generation from Apple. Microsoft and Google have found it hard to emulate Apple in the hype-creation aspect.
3. Nadella is the wrong man for an extremely difficult job. I suppose the Microsoft board will use him for another round of huge layoffs.
And this time the layoffs will be in the heart of Microsoft, in Seattle and Hyderabad. Not in distant places like Hungary.
Several months back, one SI commenter mentioned that Nadella’s family has a special needs child.
I’m now inclined to believe the special-needs child in Nadella’s family is Nadella himself. Proof – Pricing the new Surface Pro 3 tablet at nearly $2,500 (512GB version with accessories like docking station etc).
When you couldn’t sell the Surface generation 1 and 2 tablets at $600 or $700 and were forced to discount them, only a hopeless idiot will price generation 3 at $1,949 (512GB version without accessories) and call it a laptop replacement.
SI you rightly said that Xiaomi has also learned the art of hype generation from Apple.
Getting to know that Xiaomi is selling Online and exclusively only thru Flipkart on 23rd July, one person registered on 24th July, Sale was on 29th July ( you must register for the Product for next week’s sale – only registered users get a chance to buy) It got sold out within a few minutes !! Then Registered again & tried for 5th Aug sale – same story , then he succeeded in getting the order confirmed on 12th Aug Sale!.
150,000 registered for 20,000 phones.
In effect they must have sold about a 100,000 units by now on four Tuesdays so far (Sales figures not put out yet), buy have created a big Hype in the Market ! before it could be Freely available at Flipkart or offloaded to Retail stores across the country
(Probably waiting for the Bulk Shipments from China to arrive)
SearchIndia.com Responds:
1. Xiaomi is doing a smart thing by trying to entrench itself in Asia before heading to Europe and North America.
The U.S. market is difficult to crack because it’s subsidy driven. Americans pay $0 (usually for Android devices) to $299 (usually for latest iPhone) every two years.
I’m tired of this endless smartphone hype. Now the buzz in the U.S. is all about the coming iPhone 6 (due next month). I doubt I’ll ever buy a new smartphone again. I’ll stick with my iPhone 5S until it breaks.
2. I suspect if Xiaomi continues along its current trajectory, it’ll get sued in less than 12 months by Apple or one of its proxies.
BTW, how big is Ebola in your country too? I read some reports of cases in your place too.
There is no serious threat so far. One person from Liberia arrived and died here of Ebola, the lady Doctor & the Nurse who attending to him (before it was known about Ebola) are no more too!
Plenty of awareness going on in TV, Radio & Social media about what and how to prevent Ebola infection etc , hand sanitizers are having booming sales.
This country having 39 Million people who defecate in Public (4th in the chart you attached to your post) State Governors have gone on record asking people Not to Urinate & Defecate in open areas !
We Hope things don’t get worse !
Edukondalavadaa Venkataramanaa Kaapadu!!!
SearchIndia.com Responds:
Be extremely careful.
We don’t want SI’s sole commenter from North Africa to join Balaji of the Seven Hills! 😉
Try not to get sick at all from cold, fever, cough etc etc. Because if you do, then you’ll have to visit a hospital, which as we all know are Ebola infection sources.
Washing hands frequently is a good practice. I’ve been observing it diligently over the last six or seven years.
Thank you for the genuine concern. Will surely take care!
This place is West Africa (not North) I am in Victoria Island, thadukki Vizhundha neraa Atlantic Ocean ! thaan.
SearchIndia.com Responds:
1. So you live in an affluent town!
https://en.wikipedia.org/wiki/Victoria_Island_%28Nigeria%29
I just watched a bunch of YouTube videos on Victoria Island….Looks like an U.S. suburb (except that I see some people walking on the sidewalks in the videos). Not much walking here except in NYC, Chicago etc because there are no sidewalks in most places!
2. Nollywood beauty Angela Okorie says Nigerians have culture.
True or False? 😉
http://dailyindependentnig.com/2014/08/will-never-act-nude-matter-fee-angela-okorie/