A hot potato: Late last year, the CEO of analyst company Canalys, Steve Brazier, made a bold claim: he said Microsoft would kill or spin off its Surface line in 2019. Over 12 months later and despite an increase in YoY sales, Brazier stands by his prediction.
In October 2017, Brazier said Microsoft boss Satya Nadella is “a software guy, a cloud guy,” and that Surface hardware would go the same way as the Microsoft band and the company’s smartphones. He called the line “a low margin business,” adding that it didn’t make sense for Microsoft to keep on making the products.
Since those statements, we’ve seen the release of the $399 Surface Go, which has gained many positive reviews. There were also a number of new Surface devices, including the Surface Pro 6, Surface Laptop 2, and Surface Studio 2, unveiled at Microsoft's Surface event earlier this month. It even launched a brand-new category in this line: Surface Headphones.
Surprisingly, Brazier still stands by what he said last year. Speaking about Microsoft continuing to produce Surface hardware, he said, "I stand by the fact that it doesn't make sense," reports The Register.
"It would be much more sensible for Microsoft to stop spending money on Surface and focus on its cloud and application business where it's doing really well," Brazier added. "I think [Satya Nadella] will get to that conclusion. It may need them to have a choppy quarter or two before he pulls the plug."
Despite other industry execs, including Lenovo COO Gianfranco Lanci and Dell chief commercial officer Marius Haas, agreeing with Brazier to varying extents last year, it always seemed extremely unlikely that Microsoft would end or even scale back its Surface products.
In addition to releasing new Surface hardware in 2018, Microsoft’s fiscal quarterly and yearly financial results showed revenue from the Surface line jumping 25 percent, while sales were up 16 percent YoY. Additionally, a report from research firm Gartner last week showed that for the first time, Microsoft had become a top 5 PC vendor in the US, thanks to its Surface machines. All of which suggests that Brazier’s confidence in his previous remarks may be a mistake.