Microsoft sank! The future of the mobile market is bleak

Lead: Microsoft CEO Steve Ballmer has recently planned a massive restructuring of the company. Microsoft is now internal, the core business is flagging, and is absent from the mobile market. It is hard to predict the role of reorganization, and Microsoft's future is murky.

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Microsoft CEO Steve Ballmer seems to be planning a massive restructuring of the company. Ballmer's purpose is clear: he wants Microsoft to become a "device and service company".

But it remains a question for investors to see whether the restructuring will help Microsoft regain profits, or that Mr Ballmer would once again confuse consumers and analysts. Microsoft's share price has risen 30% in the past 6 months, and it may be time to discuss how investors should look at Microsoft.

Windows 8

IDC, a market-research firm, has lowered its 2013-year PC sales forecast, from 1.3% to 7.8%. Mobile sales are already higher than PC sales, and IDC now expects tablet sales (including smartphones) to overtake PCs in 2015.

PC sales are not good news for Microsoft, as PCs are the core market for Microsoft, with PCs contributing almost all of its revenue.

Microsoft expects Windows 8 to reverse the situation, but not successfully. Unfortunately, the Windows 8 market is not even as well as the reviled Vista. 8 months into the market, Windows 8 is only half as fast as Vista, and Vista is the worst selling system in Microsoft's history. Windows 8 users are still below Vista, and their market share is much lower than Windows 7 and Windows XP.

Microsoft will release an update for Windows 8 named Windows 8.1 or Windows Blue. But in addition to providing some new features to cater to consumers, newer updates are more like early fixes that users don't like, such as resuming the Start button. Commentators have not talked much about Windows 8 updates, and they want to know whether Microsoft acknowledges that the initial design flaws will slow the popularity of Windows.

Absence of mobile market

Microsoft is still absent from the tablet market, although it has already launched a tablet before the ipad was released. Microsoft has been forced to lower the price of Windows RT, Bloomberg reported. At present, HP, HTC and other partners have not yet launched the Windows tablet, only Acer a manufacturer to launch a small Windows flat, Dell is the only one to plan to launch the product manufacturers.

Whether or not mobile Windows comes too late is really a real problem. At Nokia's recent shareholder meeting, investors were clamoring for management to abandon betting on Microsoft, return to legacy systems, or move to the Android market.

As a result of years of development, Google and Apple's ecosystem have taken the lead, and if a sizeable market share is to be achieved, Microsoft must have a competitive system. For now, Windows 8 doesn't have the strength.

Nook Investment Blunder

In an effort to expand the E-book reader market, Microsoft last year invested 300 million dollars in the Nook products of the Connaught Bookstore. The E-book reader market is rapidly disappearing due to the advent of more versatile tablets such as the Kindle Fire.

Microsoft has not given up the E-book reader market. There are reports that Microsoft is considering a bid for 1 billion dollars to acquire the Nook Media for its joint venture. Microsoft seems to want to keep the market alive by getting enough content. In the face of Amazon, Google and Apple, Microsoft's pursuit of content is too late to win the strategy more than winning the hardware or software market.

Office 365

Microsoft now has a new office component. At the end of May, Microsoft executives told investors that 99 U.S. dollars in office subscribers had reached 1 million in 3.5 months. But, compared to billions of PC users, the new office is far from widely popular.

Let us shift our eyes to the mobile market, many are actually from the No to have, rapid development and expansion. Instagram 2.5 months to attract 1 million users, Spotify 5 months, Dropbox spents 7 months, Facebook only 10 months (opened a new social market).

For a widely-spread product, the new version could have been more successful, not to mention its licence price of only 1/3.

Xbox Low profit margin

A new generation of Xbox was officially released on May 21. However, as with other digital markets, the game will be increasingly combined with mobile, the game host can not escape the fate of desktop computers. Microsoft wants the Xbox to be a living room entertainment center, but a new survey shows that many young people are no longer watching TV.

The Xbox also has features such as an enterprise network center, but from the current hype, Microsoft has not yet seen Kinnect as a business tool, nor is it integrating comprehensive network functions such as Skype.

Thankfully, the Xbox department has recently been able to make ends meet after more than 10 years of losses. However, the Xbox has a profit margin of only 15%, while Windows or office departments are over 60%.

The Xbox is expected to usher in substantial growth and will occupy more markets. For Microsoft, it certainly wants to use Xbox sales to make up for a decline in PC profits. Microsoft believes the Xbox will become another itunes, but the Xbox lacks mobility, and Microsoft may find it difficult to achieve that goal.

Microsoft's Future

Microsoft restructuring focuses on 3 new departments, focusing on servers, tools, Skype/lync and Xbox. Microsoft's traditional core business has begun to shrink. Microsoft has been investing heavily in new product development in these markets, hoping to slow down the market, but this strategy has not worked.

To defend and expand the PC market, Microsoft's leaders chose not to ignore the growth of the mobile market until they felt it was not a good move and Microsoft launched mobile products.

While Microsoft's leaders are trying to redeem themselves, such a massive investment is too late to fundamentally change Microsoft's current situation. Rick Sherlund, an analyst who has long studied Microsoft, predicts that Microsoft could sell its Xbox Rick Cherende.

We have long believed that market leaders can launch new products based on the products we rely on, but they rarely succeed. The reason is that the leaders of the older generation are always accustomed to investing in their familiar fields rather than investing in emerging markets.

Microsoft's reorganization is like the Titanic's rearrangement of seats. Mobile icebergs have made a big dent in Microsoft's PC Hull. The leader still sings after the court flower, loses the PC profit the Microsoft giant Wheel will sink eventually. (Edward)

(Responsible editor: Lu Guang)