Analsysts sure are dumb

Love this.

In terms of pure business with absolutely no understanding of the company or the underlying market, what these analysts say makes sense. Unfortunately, in reality however just about everything they are saying is astronomically idiotic.

Sure, 1st party hardware sales aren't great. But they are a strategic investment in the platform. And, some of the divisions are profitable or becoming profitable beyond their strategic significance.

But the biggest bone head comment was that investing in cloud and Windows 10 made sense. Cloud yes, Windows 10 no. Windows needs investment, but not any more than it already has. And the reason is simple. While some hardware, like Surface, is actually on a positive trajectory OS revenues is dropping FAAAAASSSSTTTT. And the PC market is shrinking. All signs show that the OS ship is sinking. And anyone with any understanding of the market sees that. And yet somehow, people who get paid to comment on this stuff are actually advising to divert more investment into that area????

And the problem won't get better, even if the market rebounds. Thanks to Apple (who hides OS costs by not licensing) and Google who gives Android away for free people see less value in operating systems. And Microsoft sees this. They no longer charge OEMs for the OS on phones and small tablets and PCs. They are giving upgrades for free. Over time even the retail installs will need to go down in price. But, as with hardware, that won't mean that they can afford to abandon it.

On the hardware side, Surface is profitable already. And, it even served its purpose in showing OEMs the way. The state of Windows 8 hardware drastically improved after Surface devices were launched. And that is the true value.

Console gaming is an area where profits are a rollercoaster with not much that can be done about it. But Microsoft can't exit that market. They are the only one of the big 3 with gaming in their ecosystem. This has helped them keep a lot of publishers of AAA titles from going Mac. Abandoning consoles makes a partnership with Microsoft less valuable for games companies. And taking that away takes away a lot of their core users, especially in the critical younger age groups.

Phone IS like Surface, if they can change the business models to be similar. The problem they had with hardware was stretching themselves too thin with such a small market share. Their market share is good enough to sell high margin boutique phones. And in a sense, that is what the Surface Pro line is. So, if they go that way, they'll have the right of it. And, like Xbox, phones are an even bigger class of consumer device amongst younger generations. Completely abandoning this market will kill the company in the long run.

Basically, analysts are making the kinds of suggestions that will pay off in the next year or two but will then completely gut the ecosystem.

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