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Microsoft Corporation Message Board

  • clcellve clcellve Feb 1, 2014 9:10 AM Flag

    Prediction - 2014 Windows Phones and Tablets

    I think we're going to see Microsoft use Nokia's impressive production capacity to produce a ton of phones, and Microsoft will sell them at cost, perhaps even at a loss per phone.

    Intel has guided that margins on their phone/tablet chips will be lower in the next few months, so that would fit.

    Both Microsoft and Intel want increased market share - both have manufacturing capacity to do this, and I will bet both are willing to take a hit on margins to increase market share.

    But, Microsoft doesn't own Nokia production at this point - that's pending. But, I bet Nokia would be willing to work with Microsoft to increase production of smartphones and "phablets" because Nokia wants to see increased use of telecom because Nokia/NSN makes telecom equipment, and increased use of spectrum will result in increased need for companies/countries to increase telecom capacity, which means increased sale of Nokia/NSN equipment.

    Here's some more speculation - as the result of security issues with credit cards in the US, we'll see revised standards for internet, wireless, and credit card security, and Android devices will not meet those standards.

    2014 will be a very interesting year for MSFT and Intel mobile strategies. Both will work to increase market share, both will accept lower margins to do that. It would be helpful to MSFT if, at the same time, the Android OS took a well-deserved hit for being full of malware and unsafe to use.

    We'll see....

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    • hahahacreek Feb 1, 2014 7:41 PM Flag

      I can buy a quad core Android ARM tablet from WalMart for less than $80. Who needs Windows?

    • corneliusflake Feb 1, 2014 12:59 PM Flag

      they can't sell as many as they make now, much less as many as they could make.

      lumia production costs already exceed the profits of the whole phone division and was dragging all of nokia down including the other divisions of the company that were profitable, not just killing profits in phones.

      so, yeah, full steam ahead with that suicidal plan!

    • Also if they are creative the production experience can bring down costs in Xbox. .Maybe see them produce phones at low cost for other players (LG, Chinese) if they will use windows..

      • 1 Reply to chacista
      • I think Xbox will be discounted a little as the year progresses, going into 2014 Christmas sales. After that, more discounting.

        MSFT doesn't need LG or other producers to make Windows phones - all they need is Nokia's production base to start churning out Windows phones and sell them at cost. MSFT does not need to make a profit on the hardware, and the incremental cost of software is about zero. All MSFT has to do is make $ off sales of ancillary items - music, Skype, advertising. Certainly MSFT would like to make big profits on the hardware, software, and the eco-system, but that's not going to happen.

        MSFT competition has a problem - Samsung, LG, et. al., have to make money on the hardware - they make nothing on software or other items. In theory, if MSFT production is efficient, MSFT will "win".

        One other factor - I think Intel will be willing to sell chips to Intel at very low margins to Intel, in return for a long term agreement from MSFT to use Intel chips. Samsung makes their own chips, so they compete with Intel, so Intel won't play nice with Samsung. The reduced cost of Intel chips will help MSFT compete on price.

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