Microsoft will stop coming out with new Surface devices by 2019, according to Canalys CEO Steve Brazier and Lenovo COO Gianfranco Lanci. Neither believe Microsoft wants to continue selling Surface devices since it’s not a major source of revenue for the company. It’s making money from cloud services, enterprise products, and Windows instead.
Lanci says Microsoft is “definitely losing a lot of money on devices” so he can’t see a reason they’d “want to continue with the Surface.”
The Surface performance is choppy, there are good quarters and bad quarters, overall they are not making money. It doesn’t make sense for them to be in this business. When the capital expenditure challenge that Satya Nadella has taken Microsoft down becomes visible to Wall Street, everyone will ask him why have you gone to a low margin business,
Along with the products not contributing much revenue, Brazier says Microsoft CEO Satya Nadella is a “software guy, a cloud guy,” which could make him even less likely to continue with the Surface line.