Microsoft's head of devices has said recent reports that the Surface range is in trouble and may be scrapped by 2019 are nothing more than "tabloid rumour".
Microsoft's Panos Panay, who has become the face of the company's hardware push, dismissed recent comments by a panel of industry experts, who argued that Microsoft's devices unit was struggling and that it would eventually kill off its Surface range.
The panel, which was made up of representatives from Dell and Lenovo as well as Canalys CEO Steve Brazier, said Microsoft would soon get sick of being in a market where it held such a low share, adding that its Surface business fell by 2% in the recent quarter and that sales were down by 26%.
The comments were reported by The Register.
However, Panay hit back yesterday, saying that the idea the Surface range would be scrapped "is so far from the truth", adding that it is the "tabloid rumour of the week", as reported by Business Insider.
Panay claimed that Microsoft's commitment to the Surface range goes beyond just selling hardware, saying efforts to improve the Surface devices have often had benefits for the entire industry. An example given was the efforts to refine the Surface Pen, which involved improving Windows 10 to work with a stylus.
Panay also highlighted that Microsoft's hardware has survived previous setbacks, including the $900 million loss it absorbed when it failed to sell enough Surface RT tablets in 2013.
However, Microsoft has also just officially abandoned its Windows Phone platform, despite a commitment made just last year that Microsoft would continue to support the struggling unit.
05/10/2017: Microsoft's Surface range could be in big trouble
The death knell is tolling for Microsoft's Surface range if predictions from Canalys CEO Steve Brazier are to be believed.
As reported by The Register, Brazier said Microsoft's CEO Satya Nadella is a "software guy, a cloud guy", meaning the company's tablet and laptop range is likely to go the same way as its smartphone division.
Nadella's affinity for software isn't the only reason Brazier gave for the coming demise of the Surface, though. Despite being highly rated by our own reviewers and others, Microsoft has struggled to make money on it.
"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?'" Brazier said.
The Surface range, he said, will be "the first target" in an apparently inevitable cost-cutting effort to reverse this low-margin trend.
Brazier's predictions were backed up by Gianfranco Lanci, corporate VP and COO of Lenovo, who joined the Canalys chief on stage.
"Microsoft is making a lot of money on cloud, making a lot of money on Windows and Office, but losing a lot of money on devices," he said.
"Frankly speaking, it is difficult to see why they should keep losing money. For them it is a very difficult exercise to run hardware products business, they need to be careful about every single detail as the margin on this is so thin."
As for when the Surface line is likely to meet its end, Lanci suggested 2019 at the latest.
