Microsoft Stock Drops 11% In a Day 467
Taco Cowboy writes with news that Microsoft's stock price dropped over 11 percent yesterday. The selloff was the biggest since 2009, and during the day the price was down more than 12 percent at one point, making it the biggest single day drop since April, 2000. Analysts believe the drop was due primarily to the company missing its quarterly earnings projections in addition to taking a massive, $900 million write-down on unsold Surface RT tablets. "Microsoft’s decline is both a consequence of the changing dynamics of the tech world and the incredible surge in its stock price this year. Shares in the maker of Windows had rallied nearly 30% this year, leaving both the broader stock market and the technology sector in the dust. It was, it seemed, Steve Ballmer’s year. Until Friday. The sell off was sparked by fears over the declines of the PC market. Gartner data show PC shipments fell for the fifth consecutive quarter in Q2, this time tanking 10.9% to 76 million units. Being the world’s largest software company, 'over 80% of its revenue and nearly all of its profits continue to be derived by its ubiquitous Windows OS, its server business (Windows Server), and the business division (Office),' according to UBS. And indeed that decline in the PC industry is hurting the company’s bottom line."
It's not about the money (Score:5, Insightful)
NSA spying (Score:3, Insightful)
Is probably not helping the companies long term prospects. That said, this earnings report motly reflects a period before Snowden started talking.
Re:Metro UI (Score:5, Insightful)
Writing off almost a billion dollars in a quarter and slashing prices by 33% within the first year of launch isn't a success by any standards.
Re:It's not about the money (Score:4, Insightful)
Re:Metro UI (Score:5, Insightful)
So the Zune was a huge success as well then, according to you?
Re:Metro UI (Score:5, Insightful)
And crappy tablet.
No g3/4 or even GPS?! What kind of crap is that if I cant get directions or weather reports on the road? Metro is not bad but its implementation on the desktop. Taskbars and start menus are really fine with big screens ms. Nothing to fear folks and they work when you have 20 apps and files open. The cell phone UI cant handle this.
MS is still thinking like a monopolists because it worked. Bad release. .. Oh just wait. NT failed, IE failed, xbox failed failed, etc. Because they were ms they just gradually fixed them and monopolized the market later.
Guess what? Those days are done. Apple, Google, Mozilla, and others will eat you for breakfast while you wait for the next version. Look at IE as an example? Gosh darn it hell froze over and IE 10 and soon IE 11 are great browsers now that Google and Mozilla
slapped IE 6 crazy but who cares? People do not feel comfortable picking MS and IE as a brand now. Windows will go the same route.
They really need to try to be better. Not catch up and assume people will use it because its from MS like they did in the
Re:Metro UI (Score:4, Insightful)
Negative press (Score:5, Insightful)
Don't worry; Steve Ballmer's reorg will fix all of this. All of the product groups that analysts used to compare quarter-on-quarter and year-on-year have disappeared. Products have been shuffled around into new groups organized around "engineering." The upshot is that money-losing products like Bing are now going to be lumped in with big breadwinners like Office. You won't be able to look at the Xbox and Online Services divisions anymore and say "they lose money." All those failures will be hidden in the new structure. Without an instance like Microsoft writing down almost a billion dollars on the Surface RT disaster, it will be harder for anyone to gauge how it's doing, at least for the next few quarters. Problem solved!
Re:Metro UI (Score:5, Insightful)
heh? Surface RT was a failure plain and simple. The fact that users are happy does not prove anything. People will jump into cacti because they are happy to do it. Don't believe me? Head over to youtube and search for cacti guy jump. My point is that everybody loves products that other people hate, that is called statistics. Whether or not it is successful depends on adoption rate.
Case in point, desktop linux, not happening. I like desktop linux and use it all the time, but that don't make it a success even though I am happy. On the other hand server side Linux is a huge success and now getting to the point where people only release for Linux. EG Redis... Sure I can use it on Windows, sort of, kind of, maybe.
Chicken or Egg? (Score:5, Insightful)
I think Win8 slowed PC sales. It's just anecdotal; but you hear people say they were at the store and didn't want to buy a machine unless it came with Win7. Otherwise, they're waiting to see if MS can get rid of the New Coke OS and replace it with Classic.
Core market decline + fail to launch in new one. (Score:5, Insightful)
The traditional PC market has had 5 consequential quarters of decline. This is Microsofts core market, where it makes much of its money.
On top of that Microsoft has essentially failed to gain any traction in the the new growth markets of smartphones/tablets.
So it is understandable that like the PC market, which is adjusting to some new smaller number of annual sales, Microsoft which makes it's income from those sales will adjust down to some new lower level of earnings, and a correspondingly lower stock price.
Re:Metro UI (Score:5, Insightful)
However, Surface RT actually sold quite well and that's what makes it different from Zune.
By what standard did it sell well? Maybe Microsoft was moving some units at first, but months after launch we kept hearing the same figure for the number of units sold. A month would go by and someone would quote the same figure, again. That's not indicative of strong sales. By some channel figures, in Q1 of 2013 Microsoft and its partners moved [pocket-lint.com] less than 2 million Windows RT and Windows 8 tablets. That's not just Surface RT, not just Microsoft, that's every vendor of Windows tablets combined. Meanwhile, Apple sold nearly 20 million tablets in the same period; one vendor. So I ask again, by what standard has Surface sold "quite well"?
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Re:The stock market isn't based on real value (Score:2, Insightful)
Shows what you know. People who do longer-term investing don't much care about short-term volatility since reversal to the mean is still working in their favor.[*] However, when you actually go ahead and make projections for some metrics, like cash flows and rate of growth, you'll see that the current price has funny sensitivities to those. Of course those are models, subject to bias, impossibility of predicting truly innovative products and so on. Still, for large enough companies there is a lot of inertia that makes predictability decent in a lot of areas. Now, if Microsoft's estimated rate of growth just got slashed in the near future due to the (device) market giving them a clear 'shove it' signal on Surface/Win 8, then the effect on the current price of future growth opportunities can very well be in the 10% range. And with Friday's volume being about 5 times larger than the 3-month average this is far likelier to be due to a number of large block sells than it is to be the work of automated trading. Wait a while and it's likely to show up in the SEC fillings of some large institutional holders.
[*] in practice it's never that simple, as one does not have the luxury of being immune to quarterly results. Still, Fed's accommodative policy helps a lot here
Re:It's not about the money (Score:5, Insightful)
Not to mention, Ominvore was ported to Microsoft OSs as a basic pork handout to implement Carnivore... Precursors to PRISM. MS is in DEEP with the surveillance state. I can't honestly recommend their platforms from a security standpoint, let alone an ethical one.
Re:Metro UI (Score:4, Insightful)
Re:And the NSA effect (Score:5, Insightful)
The real problem, at least with the Prism spying, is not on your computer. Well, it might be if you run Windows (the idea of secret backdoors seems more real than ever now), but that's beside the point. It's the fact that the government has chosen to parasitize its chosen host companies directly, right on the Internet, installing splitters right at the source: between the host company and its ISP, with top-secret government-controlled datacenters in between for long-term storage of all of their traffic... everything that goes in, everything that goes out. The only way this can be avoided is by choosing services whose providers are *not* in the United States and therefore not subject to this FISA court crap. I have been running Linux since 2006, but trust me: Linux is no protection against this. The government has penetrated the Internet itself, right where it counts: at the pipes of all the major U.S.-based world-wide communications providers' connections.
Re:Metro UI (Score:5, Insightful)
The key difference is in attitudes:
Apple: Likes to take risks - "We can grow into new markets and augment our OS strategy."
Microsoft: We live in fear - "We can't grow into new markets because that will cannibalize our existing Windows+Office sales!"
It isn't Computer Science - it is basic business planning & execution with the focus on User Experience. Something Microsoft has been terrible at for the past 10 years.
Re:Metro UI (Score:5, Insightful)
There is one other thing they could of done.
* Instead of sitting on their ass throwing stuff at the wall and seeing what sticks like changing the UI in Vista and again in Windows 8 for now good reason, they should of taken a cue from Apple who built and _expanded_ upon a good foundation -- every OS X release from 10.0 to 10.7 (for the most part) just got better, more polished, faster (!), added neat features, and kept it consistent and simple.
Microsoft had 10 years to TRULY advance the state of the UI by removing the stupid close button being placed next to the maximized button, by recognizing people want to have TWO (or more) spatial groups in the task bar for the SAME program, by removing the screen-wide title bar that just wastes screen vertical real estate, by providing an API so users can skin the UI, by allowing users to choose an option LESS then "smaller" 100% UI scaling in Control Panel Display, by polishing the UI, allow people to pick a ZERO pixel window border to maximize screen usage, by getting feedback from UI & UX experts along with power users for how they could make the computer EASIER _and_ more FASTER, etc.. i.e. It only took Microsoft how many years to allow people to add custom favorite folders in the Explorer view ??
People want 1) consistency, 2) features, 3) simplicity. In that order.
The fact that Microsoft constantly has to re-arrange & re-name almost every element in the control panel every other version of Windows tells me they don't know what they hell they are doing with UI - namely respecting and building a positive Out-of-theBox User Experience. That is why the majority no one gives a shit about Microsoft & their products anymore. They don't understand hardware, they don't understand software, they don't understand user experience. Apple is by no means perfect but at least they seem to (or used to) understand the basics extremely well. Microsoft has NEVER understood UI.
Microsoft: Just another me-too company with Apple envy. No one gives a crap about your physical Store. LOL.
For Microsoft to change they need to:
a) learn to be humble
b) acknowledge that they don't understand UI / UX. (proof: Clippy)
c) communicate with people
d) get off their arrogant attitude & stop pushing things down people's throats that people don't want: Zune, WinCE, Windows Phone, Surface, a dozen different versions of Windows, refusing to sell Windows XP for $20, etc.
e) treat customers with respect
Sadly, that will never happen. Microsoft will die a slow death of becoming irrelevant all the while wondering where the fuck they went wrong.
Much worse to come (Score:3, Insightful)
Very few sheeple noticed that Microsoft OFFICIALLY cancelled Metro (sometimes called 'new UI' or Windows RT interface). Microsoft merged the phone and tablet divisions, and in a public statement declared that Metro was EOL, and that a new unified phone/tablet UI would be released ASAP (end of 2014 likely). The new UI is also likely to be a major 'selling' (snigger) feature of Windows 9.
However, Microsoft has a new round of tablets (x86 and ARM) released later this year based on Metro. So Microsoft is about to launch a product line they have already pre-announced is obsolete. This is the biggest disaster in Microsoft history. Confidence in developing for Microsoft mobile devices, already at rock bottom, will totally vanish.
The NSA spying platform, the Xbox One, makes this particular situation even worse. There is ZERO migration path for casual games from Microsoft's phones/tablets to the console. Small games developers are told by Microsoft to "get bent" when they inquire about getting their work on the Xbone.
The response to universally hatred of Windows 8 was for Bill Gates to instruct Microsoft to replace large chunks of the OS with the deepest NSA hooks yet seen in an operating system, and this is the form of Windows 8.1. Windows 8.1 can be thought of as the Windows with the in-build NSA keylogger, if by 'keylogger' one means dozens of compromised ultra-low-level services. Bill Gates boasts that almost any software running on Windows 8.1 provides a constant stream of keyboard entry data to 'advertisers' so that the user will receive targeted ads - and like Google, 'advertisers' is a cover word for NSA, even though both do make a lot of money from the ad services as a by-product.
So, using 'Notepad' on Windows 8.1 with an Internet connection means later seeing ads later based on your private text, and your private text ending up on an NSA server, even if you never actually transmitted the contents over the Internet in any form.
Problem is, Bill Gates boasts about his NSA spying at meetings with 'elites' all across our planet. He boasts about his love of eugenics. He boasts about how he intends to place every detail about every sheeple child on his new database system- a system built with his mate Rupert Murdoch (yes, Bill Gates is a partner of Fox News- Murdoch's proudest propaganda operation). You sheeple are told Fox News and Bill Gates are diametric opposites- how your masters howl with laughter at your stupidity and nativity.
But the problem is Bill Gates is too 'in your face' even for the sheeple to take. The public perception of Microsoft is terrible and getting worse. Gates' desire to build the pervert's dream by installing always on camera systems into the bedrooms of millions of children is going to backfire horribly. Bill Gates is on the verge of being known as a 'Jimmy Savile'-like monster on a planetary scale.
The Wintel project, at the time of its greatest threats, has lost all sane leadership. Microsoft and Intel are going to plummet like lead balloons. This should be the age of cheap, functional PC computing, but Intel is off chasing ARM, and Microsoft is off chasing Apple. No-one is flying the plane, so it's gradually turning into a perfect nose dive. The success of Wintel across the last few decades have gained a lot of 'altitude', but neither Intel or Microsoft are constructed to accept a gradual decline.
We should be happy about the turn of events though. Wintel had chosen to allow the PC to stagnate for maybe the last ten years, choosing to milk the public by keeping the average yearly cost of PC ownership far, far too high. Basic PCs should have been built into the keyboard at least 5 years ago, hooking up to external storage. These devices could have been sold for as low as 50 dollars for Internet and homework/small office use. But the major PC players did everything they could to prevent a repeat of the calculator and digital watch phenomena, where the basic item would sell dirt cheap. Microsoft alone wanted far more than 50 dollars per unit.
Re:Yeah! $900 million loss on Surface...pffft (Score:2, Insightful)
Xbox still hold$ the record for cummulative M$ lo$$e$.
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Re:Metro UI (Score:5, Insightful)
Somewhere it helps to be ahead of the curve and not chronically behind it. Listening is good, yes, but who was Apple listening to when they created the iPhone?
Creating new products on your own without having your users to ask for everything is great -- ultimately, they won't know if they like it until they can get an opportunity to use it a while and see if it helps them be more efficient or makes life easier for them. A product that has enormous benefits for you, can still make you feel very uncomfortable or annoyed at first, before you have gotten used to it: change is hard.
Apple had an advantage with the iPhone. Noone had ever used a touch screen smart phone before, so people had no established patterns; Apple as first creator could essentially define how people do things on the platform. Once people are used to those ways change is harder and likely to be resisted.
Apple has made no fundamental changes to the iPhone, since the 3GS. Yes, they made a few incremental improvements here and there --- notification center, multitasking, push notifications; lock screen changes; stacks of apps.
However, they've made no major user interface changes -- if you were familiar with the iPhone 3GS; you will be pretty darned comfortable with the iPhone 5 and beyond, because there's no major changes to the way you work.
I dare say the number of "controversial" changes were relatively small on the face of it --- things like replacing the Google Maps app.... Yes virginia, you do have to get your maps from a different place now, and it kind of sucks, but noone's switching platforms over something so minor as that.
On the other hand.... Metro isn't minor. It's not minor not because it can't be minor, but Microsoft has chosen to present Metro in such a way that there is no way to circumvent it --- the difference is a major impact, and likely to move users to different platforms; That is, if those other platforms provide a more true traditional Windows experience than Windows 8 does.
If Microsoft wants to dabble in completely new OSes, that's great, as long as they keep providing upgrades and support for businesses using their most popular products, so that they are not forced to switch platforms.
That's not how Microsoft's treating Metro; it's "The next version of Windows", that you have to move to, whether you like to or not, because we're not going to be selling Windows 7 anymore, or providing updates anything like it.
Re:It's not about the money (Score:5, Insightful)
It's like GM replacing steering wheels with joysticks because they want to get into the aircraft business.
Re:The stock market isn't based on real value (Score:4, Insightful)
That said, I've heard a saying that says "the market can be wrong longer than you can be right", which is to say as long as you're planning to sell in the stock market again (as opposed to getting a controlling majority and go private) you need the market to realize its mistake and adjust the stock price accordingly. Otherwise you're stuck with it, either you can sell out again at the same undervalued price or you can leave your funds invested there hoping that some day eventually the market will understand. It is especially true of bubble economics, you might think it's a bubble but if you bet it's going to burst the market might continue inflating the bubble beyond your means forcing you to sell off before it finally bursts. You were "right", but unless you can understand when the market turns you might still end up the loser.