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Microsoft CFO Says Company Has No Mobile 'Plan B'

Microsoft's Chief Financial Officer Peter Klein said at the annual Goldman Sachs Technology and Internet Conference in San Francisco that the company has no "Plan B" regarding the its mobile strategy. The news is surprising given that the Redmond company has yet to take a bite out of Apple and Google's slice of the mobile pie despite its efforts.

Sales of the Surface RT tablets have reportedly been lackluster since its debut in Q412, and the just-released Surface Pro may be slow to adopt due to its hefty price. Compared to Apple which sold 23 million iPads in the fourth quarter, Microsoft only sold an estimated 900,000 Surface tablets, if not less. The company hasn't released any real figures, but also hasn't disputed the current estimates.

If anything, Microsoft has seen a positive response from Windows Phone 8 which will likely drive Microsoft's mobile revenues for some time. But according to Gartner (which provided the Surface numbers), Windows phones only account for 3-percent of the global smartphone market. Google commands 70-percent with Android while Apple falls in a distant second with 21-percent via the iPhone.

That said, it's understandable why anyone would ask Microsoft if the company has a backup plan in case its current strategy fails. "It's less 'Plan B' than how you execute on the current plan," Klein said when asked about a backup. "We aim to evolve this generation of Windows to make sure we have the right set of experiences at the right price points for all customers."

Klein said that Microsoft is working with hardware vendors to make sure Windows software is available on all form factors ranging from smartphones to tablets to hybrids to desktops. "It's probably more nuanced than just you lower prices or raise prices," Klein added. "It's less a Plan B and more, how do you tweak your plan, how do you bring these things to market to make sure you have the right offerings at the right price points?"

Microsoft made a smart move by bringing Windows 8 over to ARM's architecture which currently dominates the mobile sector. The drawback is that consumers can't install their favorite PC programs on an ARM-based tablet, but Windows RT devices will likely be cheaper than their x86-based counterparts. However what Microsoft needs to do now is bring the Surface and/or Windows brand into the 7-inch tablet market, and promote it as an extension to the desktop.

Klein also briefly talked about Microsoft's investment in Dell, saying that the Redmond company was merely supporting the PC ecosystem which is currently being led by Lenovo, HP and Dell.

"We have a long history of participating and supporting the ecosystem and that takes different forms. Oftentimes it takes the form of co-marketing, sometimes in helping with development," he said. "In a very dynamic industry, our ability to support the ecosystem - particularly the ecosystem that is innovating on our devices and platforms - is a good thing and something we will continue to do."

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  • esrever
    What do people expect would be a plan B?
  • antilycus
    Dvelopers and the market are about 4 years away from producing anything other than an e-reader or internet browser/email reader. Spending 500+ to check the internet and read email seems a bit out of touch. Remote Desktop/VNC service is a pain on touch screens...I think i.t. geeks world wide are very hesitent to jump on any new "lets folllow Apple" bandwagon that MS, Amazon, HP or whatever is next is trying to do.

    HP's quality, especially in printer drivers (which they started with, printers) is crap now. Their servers are crap (crummy less then consumer grade internal parts), the workstations. Bah anyways, off topic. This whole tablet/phone hyrbrid thing seems to be about 2 things. 1) paying stock holders happy and 2) trying to magically find the next best thing at the expense of consumers. Great Apple has a nice quality tablet....what can power users do with it? Nothing worthwhile. It doesn't make life easiest unless it's for easy stuff, but im not paying (and most consumers who know better would agree) 500+ USD to just browse the web/check emai. No thanks.
  • antilycus
    making stock holders happy, grr
  • fulle
    Microsoft: I'm having a rough time taking care of the new baby, but it'll be worth it! We just got to power through a few months of transition. I've thought about the future a lot these last few years, and have changed everything to be ready for this. It'll be rewarding once we get where we're going

    Goldman Sachs: Have you considered just "putting it down", and starting over?
  • twelve25
    Does Apple have a plan B? What a ludicrous question. You decide on a path and you take it. Simultaneously working on a Plan B only dilutes Plan A and ensures you have two crappy solutions instead of a chance at one good one.
  • lradunovic77
    They need to forget about Metro as Design solution and come up with something smarter. MS should build Mobile/Tablet OS using Linux Platform than trying to bring NT Technology to it. Memory and Disk 'foot' print of NT OS is ridiciolously high for devices such as Phone and Tablet. Not sure in what category to put Surface Pro at this point. Price point of Surfece Pro 128 is what? $900? Too expensive for device which is trying to be anything and at the same time is not good enough for anything. Weird!
  • neon neophyte
    a cheap windows RT tablet acting as an extension of a windows desktop might actually do well. native vpn/remote desktop. have the tablet act as a touchscreen for metro while having the desktop on the main monitor.

    i might be interested in a cheap RT tablet if it meshed perfectly with my desktop.
  • lradunovic77
    The way Metro doesn't belong to Desktop PC same way Desktop interface doesn't belong to device such as Surface. I go to Best Buy and i play one of those and i wonder how MS failed to deliver 4 basic elements of OS.
  • thor220
    "We have a long history of participating and supporting the ecosystem"

    How about they support the desktop ecosystem that made them what they are. Transitioning all
    your products to appeal to phone users will not end well. Also preventing software that you made (halo 3)
    from even getting to your own OS was an opportunity loss. They keep going like this and all the professionals and gamers will move to linux; eventually casual users. Microsoft need to innovate and
    need it now. Let's even say that microsoft's next OS is another good os, will it be enough. With valve making a linux push we might finally see a waterfall of users pour into linux. *maybe
  • They have done a ruddy good job on windows phone 8, my lumia is the best phone ive ever used and ever seen, it destroys the iPhone 5 and looks stunning on screen and the device. Its so slick and smooth especially for a 3rd party device. I think they should have maybe only slightly added metro to the desktop, like making the shortcuts on the desktop more metro like and some of the interface, the main thing people seem to dislike is that they have to go to the metro screen each time, I have yet to try W8 on a desktop yet though, but I really want to try it