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Why do people keep throwing Windows OEMs under the bus?
- Thread starter Rogifan
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I agree. Every Windows OEM seems to have 15-20 models in their lineup. At one point in their history, it was virtually impossible to predict what components were in a particular Dell model. Apparently they would switch component vendors depending upon who had the low bid that month.
Fewer options also means larger quantities of components purchased which can also help drive down the cost of the components and ultimately the resulting device.
Also "less expensive" shouldn't mean "lower quality" (which is another area where I think the OEM's did themselves in).
How do we know Surface is making money for Microsoft. As far as I know they're not releasing P&L statements for Surface. Pretty much all they've told us is revenue to which people have tried to figure out sales based on estimating average selling price.
How do we know that Surface is making money for Microsoft? By the same measure we know that the Apple Watch is making money for Apple.
http://www.twice.com/news/financial/microsoft-says-it-got-surface-right-and-it-shows-sales/57965
Surface: Surface tablet revenues grew 117 percent to $888 million, driven by Surface Pro 3 and Surface 3, which were launched in June 2014 and May 2015, respectively. Full-year sales rose 65 percent to exceed $3.6 billion.
In fiscal 2014, Surface sales hit $2.19 billion, up from 2013’s less than $1 billion.
Executive VP/chief financial officer Amy Hood said enterprise sales accelerated in the quarter and that Surface 3 sales were “particularly strong” to educational customers. “Our differentiated products, as well as improved discipline and execution, helped to improve gross margins by over $450 million this quarter and $1.3 billion in fiscal 15,” she said.
Said CEO Satya Nadella, “Surface is clearly a product where we’ve gotten the formula right, earned fans, and can apply this formula to other parts of our hardware portfolio.”
But you're right, technically we don't know if it's making money for them. I searched for profit margins and mainly found old stuff, but the profit margins on the surface tablets were estimated to be greater than the iPad profit margins. Once again old stuff, I'll try and search a bit more as it's a great subject. With MS clout, their very old partnership with Intel, and established partnership with other hardware aspects, and their in housing of R&D, and not having to pay any software licensing fees, I'm sure their profit margin is at least as good as Apple's, meaning they are making a ton of money. Their factories are all set up and are past the growing pains of the initial product and MS now has much better experience in producing hardware.
Once again, just speculation on my part. I think MS probably thought they would break even on surface sales, or maybe produce it as a loss leader, anticipating more PC sales in general as the OEM's produced better selling hardware to run MS software and cloud services. Certainly when they had that huge write down with RT they weren't thinking about profit. I give MS credit, they didn't give up, they owned up to their mistakes and miscalculations and released a better product. Maybe they were surprised at the success and profitability at first, but they certainly have recognized it and embraced it. I don't think the surface lineup would have survived if it wasn't generating profit.
The problem with windows OEMs are that they constantly make ugly and cheap looking/feeling devices. If it wasnt for Apple our PCs and laptops would still be grey colour plastic boxes.
When some OEMs tried to compete, windows devices started to become real alternatives. The Samsung series 9 ultrabooks were very nice devices as too were some of Sonys ultrabooks. However the problem with these ultrabooks were that they retailed at significantly higher prices than the equivalent macbook pro. Thus no one bought them (except me by the looks of things).
The best laptop has always been the macbook pro.
The best windows laptop has always been a macbook pro running windows via boot camp.
The surface book at last offers a true windows alternative to the macbook pro.
In short the reason why windows oems get pissed on is because despite many years of opportunity they still have not made anything decent within the pricepoint of their main competition.
Microsoft are absolutely correct in taking things into their own hands. The surface book looks like a very good product and something that will push windows laptops being used more widely especially outside of the business space. The surface pro is also a very good device.
When some OEMs tried to compete, windows devices started to become real alternatives. The Samsung series 9 ultrabooks were very nice devices as too were some of Sonys ultrabooks. However the problem with these ultrabooks were that they retailed at significantly higher prices than the equivalent macbook pro. Thus no one bought them (except me by the looks of things).
The best laptop has always been the macbook pro.
The best windows laptop has always been a macbook pro running windows via boot camp.
The surface book at last offers a true windows alternative to the macbook pro.
In short the reason why windows oems get pissed on is because despite many years of opportunity they still have not made anything decent within the pricepoint of their main competition.
Microsoft are absolutely correct in taking things into their own hands. The surface book looks like a very good product and something that will push windows laptops being used more widely especially outside of the business space. The surface pro is also a very good device.
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I'm currently planning on getting a surface book. I would have been happy to get a similar device from an OEM if one had been available. In my case, Microsoft isn't taking away an OEM sale, as otherwise I'd use a macbook.
Is there an OEM making something comparable to the surface book, a 13 inch windows laptop where the screen is removable that supports a digitizer pen?
Nobody's really throwing Windows OEM's under the bus. For the last few years, they had their chance to drive sales of Windows hardware and most of them decided to compete on the low end - putting Windows in plastic boxes without touchscreens and retailing them at Costco for $400. The ones who tried premium hardware to go against Apple get eaten up pretty quickly. Except for a few products like the Yoga, most OEM's have shown they're incapable of building a strong brand that can go head to head against a Macbook. Left on their own, the OEM's are collectively a sinking ship.
MS getting into hardware allows them to do 2 things - grow Windows penetration, which indirectly benefits OEM's, and control the narrative by strengthening W10 branding. You now got articles like Yoga vs Surface Book, or XPS vs Surface Book that wouldn't have existed if all W10 devices were machines with weak branding. They also price high to give the OEM's margin to compete. That $3200 1-TB Surface Book too expensive? It's supposed to be. That way, an OEM can retail a similar 1-TB machine at a lower pricepoint and still make a profit.
MS getting into hardware allows them to do 2 things - grow Windows penetration, which indirectly benefits OEM's, and control the narrative by strengthening W10 branding. You now got articles like Yoga vs Surface Book, or XPS vs Surface Book that wouldn't have existed if all W10 devices were machines with weak branding. They also price high to give the OEM's margin to compete. That $3200 1-TB Surface Book too expensive? It's supposed to be. That way, an OEM can retail a similar 1-TB machine at a lower pricepoint and still make a profit.
I don't know how old you are, but there was a time when it was actually the Macbooks that were cheap-looking plastic boxes, and Windows business laptops had sleek premium designs. I had a Sony Vaio in the early 2000s that mopped the floor with anything Apple made.
IMO it was only around 2008 or so when Apple was starting to distance itself from the Windows laptop crowd with the unibody designs and the Macbook Air (which essentially launched the ultrabook segment).
Well, given that Windows still has something like 90% market share, the last sentence sounds a bit weird.
an important point is that many of these PC manufacturers have different lines: Consumer and Enterprise, with some even having SMB.
Enterprise - Wait for a technology to mature. Communicate advanced release schedules with the world, so that organizations can prepare for the refresh. Organizations will spend considerable time testing them and building their images. "One more thing" doesn't float with this crowd. Downside is that, by the time workers get issued these systems, they're well behind the innovation curve. Upside is that, by the time they start working on them, they're reliable... usually. Margins is this business are razor thin (think 5%), with most manufacturers making money from services and products surrounding these PCs.
Consumer - A race to incorporate the lasted technologies into the lower-priced products, or just to build the cheapest stuff. Minimal testing and not as much concern for reliability. This business has traditionally been the intersection of cheap and fast.
But lately things have been changing. Larger manufacturers like Dell and Lenovo have been designing some innovative tech, which they're making available to both sides of the house. It's just going to take them a while to shed the decades of sour reputation, for many people.
Enterprise - Wait for a technology to mature. Communicate advanced release schedules with the world, so that organizations can prepare for the refresh. Organizations will spend considerable time testing them and building their images. "One more thing" doesn't float with this crowd. Downside is that, by the time workers get issued these systems, they're well behind the innovation curve. Upside is that, by the time they start working on them, they're reliable... usually. Margins is this business are razor thin (think 5%), with most manufacturers making money from services and products surrounding these PCs.
Consumer - A race to incorporate the lasted technologies into the lower-priced products, or just to build the cheapest stuff. Minimal testing and not as much concern for reliability. This business has traditionally been the intersection of cheap and fast.
But lately things have been changing. Larger manufacturers like Dell and Lenovo have been designing some innovative tech, which they're making available to both sides of the house. It's just going to take them a while to shed the decades of sour reputation, for many people.
I don't know how old you are, but there was a time when it was actually the Macbooks that were cheap-looking plastic boxes, and Windows business laptops had sleek premium designs. I had a Sony Vaio in the early 2000s that mopped the floor with anything Apple made.
IMO it was only around 2008 or so when Apple was starting to distance itself from the Windows laptop crowd with the unibody designs and the Macbook Air (which essentially launched the ultrabook segment).
Well, given that Windows still has something like 90% market share, the last sentence sounds a bit weird.
Market share is a junk stat. 89% of that 90% is probably from business/corporate use and includes all those cheap devices heavily skewing the numbers just like Android vs IOS.
Go into a coffee shop at lunch time. Tell me the market share of people using windows laptops. Its probably 1%. Ask most people what their personal laptops are. Again market share here will also be vastly different.
But yes windows has a large market share even though there is still yet not one windows laptop worth buying (until the surface book).
I wanted a newer model of the Samsung series 9 laptop but Samsung stopped selling them. I looked at the metal high end Sony Vaios but the metal felt and looked like cheap plastic. I looked at the carbon fibre high end vaios but these too looked and felt like cheap plastic (Sony has since sold Vaio). Only option was to stash my money under my bulging mattress. Still have not been able to find a viable option. Boot camp and parallels became the default option.
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So market share is junk stat that pales comparison to the fabled coffee shop stat? The first place I go for my tech insight
The ability to access some (or all in some cases)of the parts is more advantageous than just straight build quality for some people too
The ability to access some (or all in some cases)of the parts is more advantageous than just straight build quality for some people too
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Of course isn't that how you rate the viability of you purchases?
Coffee shop people are always right I mean they go to Starbucks
But you're actually solidifying the argument against the OEMs. The entire point of the debate is that the OEMs flooded the market with cheap plastic crap, so if you say 89-90% of that is cheap plastic crap, well then isn't that what we are saying as well? By the way I went into Barnes and Noble the other night, out of probably 30 people sitting around I saw 2 surface tablets, 3 or 4 MacBook and another 3 or 4 generic PC laptops, but of course I wouldn't try to pass along a single trip to a café as all inclusive of the industry.
No, 1% makes no sense at all. It's more possible that a large majority of windows users are still stuck on old versions, mainly windows XP, and probably old hardware. Taking aside the wow factor and the addiction we all share, I honestly only upgrade my "necessity" laptops every 5-7 years. Microsoft is fine with that since they are concentrating on cloud services and subscriptions to its products like Office, but this certainly hurts the OEM's badly. There is just nothing compelling about any laptop I see to make me upgrade, unless it's got something like what Microsoft is injecting into it's hardware these past few years.
Everyone knows that a 90% windows market share stat is skewed.
Its closer to 60%/40% in the real world.
Just like the market share of Iphone being 13%. In reality its about 85% because most models included in the numbers do not matter in the real world. My coffee shop analogy was merely to suggest people apply real life situations. However, I guess that is hard for alot on here.
Why would app developers eagerly focus on producing ios apps before android if the real world market share of the iphone is only 13%? Its a BS number.
Its closer to 60%/40% in the real world.
Just like the market share of Iphone being 13%. In reality its about 85% because most models included in the numbers do not matter in the real world. My coffee shop analogy was merely to suggest people apply real life situations. However, I guess that is hard for alot on here.
Why would app developers eagerly focus on producing ios apps before android if the real world market share of the iphone is only 13%? Its a BS number.
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I don't know how old you are, but there was a time when it was actually the Macbooks that were cheap-looking plastic boxes, and Windows business laptops had sleek premium designs. I had a Sony Vaio in the early 2000s that mopped the floor with anything Apple made.
IMO it was only around 2008 or so when Apple was starting to distance itself from the Windows laptop crowd with the unibody designs and the Macbook Air (which essentially launched the ultrabook segment).
Well, given that Windows still has something like 90% market share, the last sentence sounds a bit weird.
In general though, back when Windows was more dominant, most of these OEM's were basically off the shelf assemblers. For each of those high end Vaio's, you had 10 ugly Compaqs made of plastic. Knowing hardware was a commodity back then, most of these OEM's branded themselves not by hardware design, but by tacking on competitive customer service plans and software bundles. That's how Dell got up there.
Credit to Apple, their big disruption in the space was to flip the model its head - turn software into the cheap commodity and hardware into a premium product that merits craftmanship. 10 years ago, the software you installed on your windows device cost more than the laptop. In 2015, people fork out $2K for the laptop and complain about $10 software being too expensive.
Meanwhile a lot these OEM's are still been stuck in the old model - still putting out crappy boxes full of licensed bloatware as if hardware was still a low value commodity. MS stepping in with an innovative premium design is pretty much an intervention. You'd think the OEM's, who've dealt with hardware for decades, would be better at it.
I don't understand what you mean "do not matter in the real world" ? A windows installation is a windows installation, it's another chance for MS to sell cloud, office, or other subscriptions.
the reason ios gets apps before android is iOS users spend way more money, has nothing to do with marketshare
marketshare is just what it is, has nothing to do with profitability, or revenue per user, coffee shop / classroom representation or whatever other metric apple dominates in (usually has to do with $)
thankfully x86 windows does not have the system update or app issues android can have (windows has an app advantage over OSX imo), so IMO the parallels between android and windows only go so far
marketshare is just what it is, has nothing to do with profitability, or revenue per user, coffee shop / classroom representation or whatever other metric apple dominates in (usually has to do with $)
thankfully x86 windows does not have the system update or app issues android can have (windows has an app advantage over OSX imo), so IMO the parallels between android and windows only go so far
Yep, that's probably true. But on the other hand, Apple is probably leaving a lot of money on the table by not entering the inexpensive laptop market. The fact that you cannot buy a Macbook below $1000 (ok, the low-end 11" Air is only $900) while there are plenty of very usable Windows laptops for half that is part of the reason why Windows still dominates in terms of market share. Price may not matter as much for many people on this forum, but in the real world it does.
This is part of Jobs' genius on the business end. He didn't target the budget laptop market back in the day because avoiding it allowed Apple to develop the image of a strong premium brand, which they rode to success - a handful of expensive products, all of them best in class. Kinda why Tim Cook putting out a pseudo-midrange 5C was a dumb idea - you don't wanna dilute your premium branding.
Jobs also killed off the most significant part of the budget market, netbooks, with the iPad. A device running off a $20 ARM chip that cost more than an x86 netbook, marketed not as a netbook killer, but as a post-PC device in a new product space. In reality, everyone just uses them to do what their netbooks used to do, it's hilarious. For Apple though, that was a smart move.
Technically the iPad would be able to fill the budget laptop space with the same type of tweaking MS did to create the Surface. But it's stuck on iOS, which is a budget software market and even if the hardware is technically capable, the ecosystem doesn't have the business model to support complicated software solutions. The iPad Pro is still gonna be running the same $5 lite apps and freemium software that's the gold standard for iOS. So it's funny. The old MS made $$$ off cheap OEM hardware, premium software. Apple flipped everything by turning premium hardware, cheap software into a standard. Now MS is countering by merging premium hardware with premium software that you won't find on ARM. I have no clue what Apple is gonna do or if Tim Cook is even aware what's going on.
Yes. It's a trade-off, and apparently they found a good balance.
Not so sure about that one. Chromebooks are the spritual successor of the Netbook and they seem to be doing very well in the low price market.