Microsoft to spend over $500m to catch up to iPhone, Android

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  • appdevappdev Posts: 61member
    Quote:
    Originally Posted by screamingfist View Post


    i think apple edged out ms in profits recently? but regardless of that they are both running close together i think (profit wise)



    No not profits. Microsoft is still very profitable. But Apple has almost caught up to them in total revenue. They are probably going to pass them very soon once they start reporting the iPhone4 and iPad numbers.
  • firefly7475firefly7475 Posts: 1,499member
    Quote:
    Originally Posted by Curmudgeon View Post


    I've always found it amusing in the way Microsoft always has to tell everybody exactly how much they're spending on their promotions. Last time it was their $300 million dollar Vista campaign. Again, why do we need to know how much they're spending? Are they trying to tell us that we should pay attention simply because they think it's important enough to spend X amount on?



    Did you even read the article before you posted or just the title?



    This wasn't a press release.
  • djmikeodjmikeo Posts: 178member
    I tried to find out how much was spent on the "Kin" phone marketing and the numbers range from $250m to $410m. I actually was surprise to learn how hard Microsoft was trying to create a viral hype for the kin. The created lots of webisodes of how to use the phone. The had nationwide tour parties and held a huge launch party. Even worse was the TV advertising that had a faux hipster feel to it.

    This money does not include the $500 million spent to buy the Danger phone project. Microsoft needs to learn that advertising money buys exposure, not cool. Kin has left a really bad taste in people's mouth and I am not sure that the new Microsoft WinMo 7 phone will taste much better to consumers. I think it might do ok with the enterprise market, but today consumers are the driving force in todays gadget market. Companies are increasingly allowing their employees to bring in their own computers, phones etc. to work.



    Microsoft has recently spent a lot of money on Bing to compete with Google. They even had a pretty good cash back program if you purchased something thru their BING market. I used it, got my cash back, and have rarely used it since, maybe not at all. Thanks for the money, but it didn't succeed in keeping me as a user.



    I can't wait to see what kind of marketing MS uses for their new phones. I wish I was in advertising and was getting some of that $$$$ that will be thrown at the new phone.
  • studiomusicstudiomusic Posts: 531member
    Quote:
    Originally Posted by AppDev View Post


    Xbox turned it's first profit in 2008.



    http://www.pcworld.com/article/14898..._a_profit.html



    From your link: "As of June 30, the Xbox division on its own made Microsoft $426 million in operating profits, and $8.1 billion in total sales. According to the company's 4th quarter report, those numbers are up 34% from the year before, when it lost the company nearly $2 billion. Of course, the Entertainment and Devices division (which houses the Xbox team) as a whole still ended up losing $188 million for the year."



    So, they made $426 million profit, but had to spend (just the 1 year before...) $2 billion?





    Quote:
    Originally Posted by nht View Post


    Googling XBOX and Profit is pretty easy. The division was profitable in 2008 and 2009.



    http://news.teamxbox.com/xbox/20346/...Year-in-a-Row/



    And gee...they seem to be making money off Live...





    From your link: "During fiscal year 2009, Microsoft shipped 11.2 million Xbox 360 consoles compared with 8.7 million Xbox 360 consoles during fiscal year 2008. These last figures explain why the Xbox saw its second straight year of profitability and even if the Entertainment and Devices posted an operating loss of $130 million in the fourth quarter, it ended fiscal year 2009 with an operating income of $169 million. "





    So for those 2 years, they made a profit of $556 million. GREAT, except they lost $2 billion in 2007 alone. Note also that the division as a whole LOST money those years.





    They have a lot of profit to make before they are even close to breaking even on the XBOX.
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by AppDev View Post


    We shouldn't underestimate M$ and their checkbook too much.



    MSFT is going to need more than $500M to "catch up" to this market. How much doesn't matter. What they need can't be bought.



    Microsoft certainly has the financial means, but it's far too simplistic to think all they need to successfully position themselves in the smart phone market is to allocate enough funds to it.



    It seems to be a characteristically American misapprehension to think that throwing enough money around can solve any problem one can imagine (look at what Congress has been doing lately). Microsoft has lots of money, but what they do not have is the unique culture of innovation and talent that drives Apple's success. I have never worked for Microsoft, but know several people who have, all of whom relate stories of a thoroughly toxic corporate culture that crushes and destroys innovation while rewarding incompetence and deception - that's why they're all former employees. An innovative and game-changing product like the iPhone will never emerge from Microsoft.



    Contrast this with Apple. Their uniquely innovative engineering culture is a commodity that can't be had for any amount of money. It can't be borrowed, sold, or implemented by corporate edict. It's arguably their most precious asset, far more valuable to AAPL's investors than the substantial cash on their balance sheet.



    Quote:
    Originally Posted by AppDev View Post


    Remember they have a successful history of doing this.



    MSFT's investment history points more toward acquisitions than anything particularly innovative. They've acquired well over 100 companies and have stakes in dozens more. A summary of MSFT's truly innovative products is a short list, and an old one at that. Their current corporate focus is to preserve a very successful revenue stream. This really shouldn't be perceived as a bad thing - MSFT has simply become a huge beast. MSFT investors want a secure investment and predictable dividends, and will probably enjoy that for a long time. Apple, on the other hand, has proven several times they're willing to bet the ranch on "the next big thing" - and they've succeeded. Apple took enormous risks by buying NextStep, with the original iMac, the iPod, the iPhone... all of which were trashed by those accustomed to expecting more of the same. They didn't license their OS. They didn't build a netbook. They didn't lower their prices. They build hundreds of retail stores... all unpopular decisions. Where would Apple be without having taken these risks? In all likelihood, gone. This is what separates an innovative company from an immovable beast like MSFT, and why Steve Jobs calls Apple "the biggest startup on the planet".



    If MSFT has a "successful history" of doing anything in particular, it's intimidating their competition, selling what they don't have, and promising what can't be delivered. I don't begrudge Microsoft's success in these areas, capitalism is capitalism and there are plenty of ways to make money. Deception and intimidation are as much in MSFT's DNA as innovation and fanatical attention to detail and quality are in Apple's. How you choose to invest is up to you.



    To properly serve their shareholders, Microsoft should forget the smartphone market. That ship has sailed.
  • anonymouseanonymouse Posts: 6,558member
    Quote:
    Originally Posted by john galt View Post


    MSFT is going to need more than $500M to "catch up" to this market. How much doesn't matter. What they need can't be bought. ...



    Well, I wouldn't be too sure about that. They need two things in mobile, marketshare, which they have next to none of now, and, more importantly, mindshare, of which they have none with currently shipping products and consumers, but still some with developers.



    $500M can certainly buy them some marketshare, essentially paying handset manufacturers to build WP7 handsets; and carriers will likely be happy to throw another mobile OS into the mix, since it is to their advantage to insure that no one mobile OS becomes totally dominant.



    Harder, but not impossible, to buy is mindshare. They used to be pretty good at this, but have certainly slipped in their ability to do so in recent years. But, if they can pay developers for some compelling apps, take a significant chunk of marketshare, and rouse the faithful, they have at least a shot at being successful in this.



    The enemy is obviously Android, which has pretty decent marketshare right now, but not all that much mindshare outside of certain geek circles. Android's faux openness is not really a big selling point beyond the geeks, so I don't think a business model contrary to that is a problem for them. So, the big question is can their marketing be compelling enough to actually make people want these phones in preference to Android phones. It's a hurdle, but not an insurmountable one.



    The biggest losers will continue to be Nokia and RIM, with HP/webOS an entirely unpredictable wild card at this point. (If not bought by HP, webOS would die a not so lingering death. It's not clear, to me at least, whether HP can reverse that, and it certainly doesn't help them being rudderless at this point in time.)



    EDIT: Assuming they're going all in with WP7, they also need a (non-Windows) tablet in the game. Without that, WP7 may well just end up as the latest failure from Redmond.
  • chronsterchronster Posts: 1,894member
    Quote:
    Originally Posted by FineTunes View Post


    Maybe the money would be better spent building a school in Los Angeles:



    http://theweek.com/article/index/206...by-the-numbers





    God forbid this country celebrate education instead of ignorance (otherwise known these days as patriotism.)
  • chronsterchronster Posts: 1,894member
    I see a lot of scared Apple fans who think they won't own the "latest and greatest" once WP7 comes out.



    Who cares how much they spent? Apple got MS off their asses, and that's what matters. If MS can come back with something great, Apple will get off their asses so-to-speak and come back with something even better.



    I'll never understand why people don't see this.
  • curmudgeoncurmudgeon Posts: 483member
    Quote:
    Originally Posted by Firefly7475 View Post


    Did you even read the article before you posted or just the title?



    This wasn't a press release.



    Do you think the author just pulled the number out of his butt? Somebody, somewhere gave him an idea of the amount. But it's true, I did assume that it was a Microsoft employee that passed on the dollar amount.
  • screamingfistscreamingfist Posts: 971member
    Quote:
    Originally Posted by chronster View Post


    God forbid this country celebrate education instead of ignorance (otherwise known these days as patriotism.)



    would be nice, but, education is another problem that can't be solved by throwing money at it...
  • anonymouseanonymouse Posts: 6,558member
    Quote:
    Originally Posted by screamingfist View Post


    would be nice, but, education is another problem that can't be solved by throwing money at it...



    It's not like that has ever actually been tried. Results might be surprising.
  • alanskyalansky Posts: 235member
    In other news, Schwinn Bicycle Co. will invest $500M to catch up with Ferrari on the international Formula 1 racing circuit.
  • goochergoocher Posts: 92member
    Quote:
    Originally Posted by tsa View Post


    I bet Windows mobile 7 has a very smooth integration with Exchange servers, which is a reason for buying for many, many companies out there.



    iPhone has great Exchange server support, and it's very easy to setup. My girlfriend bought her 3GS late last year, and set up her work Exchange support in-store by herself... and she's not especially tech-savvy. It was simply straightforward to setup, and has worked flawlessly since.



    Quote:
    Originally Posted by tsa View Post


    Here in Europe the iPhone crazyness is over already, and many people dump the iPhone for better phones.



    Really? Based on which data? Let me guess: your personal bias. Being a Fandroid doesn't alter reality around you... in case weren't aware.
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by anonymouse View Post


    Harder, but not impossible, to buy is mindshare. ... if they can pay developers for some compelling apps, take a significant chunk of marketshare, and rouse the faithful, they have at least a shot at being successful in this.



    Some marketshare, yes. Some "mindshare", yes. But that's a lot of "ifs", and MSFT is facing significant headwinds at this point. The MSFT "faithful" are a shrinking and aging slice of the pie. The future belongs to the young, who are being brought up on the standard the iPhone and its variants have become. Gaining market share will require exactly what Apple has known for years - you have to do everything better - a lot better - to take market share from an established leader. Good luck with that, when Apple has a decade of R&D behind them already.



    Of course MSFT "has a shot" but their current strategy seems to be "ready... fire... aim"



    Of the two, I believe HP has the greater potential to reinvent itself with their acquisition of webOS, but before doing so it will have to tear down just about everything it has become recently... a second rate vendor of Windows-centric hardware and overpriced ink. Not a viable business model IMO.



    Quote:
    Originally Posted by anonymouse View Post


    ... carriers will likely be happy to throw another mobile OS into the mix, since it is to their advantage to insure that no one mobile OS becomes totally dominant.



    Believe it or not I don't want Apple to be without competition. No one manufacturer has the luxury of complacency. History has not been kind to any company, no matter how big, content to just sit on an existing revenue stream. This is especially true of technology companies.



    Quote:
    Originally Posted by cwfrederick View Post


    ... apple is American, bitch.. gfy



    How profoundly moronic it is to resort to vulgar ad hominem attacks when logic and literacy fail the author.
  • akhomerunakhomerun Posts: 386member
    Quote:
    Originally Posted by sheff View Post


    Let's see who Microsoft will copy this time: a tight control over the ecosystem Apple style, or a mish mash of whatever happens hardware and software wise of Google. So far it looks like a hybrid of different hardware manufacturers with dictated microsoft standards and a fairly controlled eco-system, but we'll see what happens after launch.



    I'm sure Ballmer (if he is still around) will have a lot of sleepless nights trying to figure out how to set up the copiers.



    PS I am just not exited at all about Phone 7. Not that it's bad, it's just I don't care what they put out, and after the flop of KIN they better nail this launch or they are history in the phone business. This time I truly believe that.



    I think Microsoft's hybrid strategy between being tightly controlled and being completely wild like Android is actually a pretty good idea. Giving hardware manufacturers requirements on physical buttons can be helpful to the consumer, unlike the mishmash of Android products.



    The reasons I'm not excited for Windows Phone 7 are:

    1. The interface is HORRIBLE! Going right and left, up and down on that grid thing without really knowing "I have to go in this direction to do this." It's just a mess!

    2. No access to the central file system. What MADE Windows Mobile versions in the past was their similarities to Windows. Why can't Windows Phone 7 be like having a mobile version of Windows 7 in your pocket?



    (I can understand that today's smartphones are really just made for dumb people who don't do anything productive on them.)



    3. No possibility of SD card or tethering support. You can even tether an iPhone!! This is supposedly for the security of business users, but since a Windows 7 phone doesn't give you access to the file system, or have backward compatibility to Windows Mobile 6 applications, how is it even a good phone for business? (I can't tell you whether Blackberry lets you store files wherever you want on the file system, though, to be fair most phones don't. I wish more phones were like the Nokia N900 with full file system and terminal access. It's NOT a security issue to be restricted in the way that you use your phone!)

    4. THE NAME! Windows Phone 7!! Screams BORING!

    5. No backward compatibility due to rushed development schedule. So the development was rushed, this OS is likely going to suck.

    6. I dunno if it's a problem but....still Windows CE based.
  • tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by striker_kk View Post


    Android is enough. Want one more? Anything other than M$.



    This is why its called the open market. Everyone has the opportunity to compete.



    Quote:

    It's not 'wishing'. It's called reading the writing on the wall. In this case, the letters are neon and twelve feet tall.



    You are making the same predictions people made with the iPhone was first introduced. You are predicting doom before anyone has even used it.



    Quote:
    Originally Posted by Doctor David View Post


    I see this comment often. There already is competition in smart phones. I'd guess most here are negative about win phone mo 7 or whatever it's called is because there are two things that have brought ms success the last 30 years, office and eliminating competition.



    MS has no power to eliminate competition. Bringing that up in the smart phone market is just FUD.



    Roughly 1.2 billion mobile phones are sold annually. Roughly 300 million smart phones will be sold this year. There is plenty of room for competition.



    Quote:
    Originally Posted by screamingfist View Post


    they won't fail. they may not do great but they will be around.

    there is competition, its just floundering around a bit right now. if Android 3 does come out then you will see it. the iphone 4 wasn't really ALL THAT. nice touches and pretty, interesting hardware design but nothing that just makes one running android 2.2 go.. 'gee i really need to ditch this and get iphone 4'.



    How did this go from talking about Windows Mobile to talking about switching from Android to iPhone?
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by anonymouse View Post


    Quote:
    Originally Posted by screamingfist View Post


    would be nice, but, education is another problem that can't be solved by throwing money at it...



    It's not like that has ever actually been tried. Results might be surprising.



    I think you're both missing a fundamental point: lots of tax revenue allegedly raised for "education" is actually spent on non-productive assets such as redundant overpaid administrators and pensions. So you're right, it's never actually been tried - except perhaps in private schools whose performance is constantly subjected to judgment by a market that "votes with its feet". Like the smartphone market.



    To extend the analogy, MSFT's $500M investment isn't likely to reach those who can actually deliver some return on it... because those who can aren't working for MSFT.



    What would happen if you doubled the amount of money dedicated toward "education"? You might find this an interesting read: http://www.cato.org/pubs/pas/pa-298.html



    Enjoy
  • rot'napplerot'napple Posts: 1,839member
    Money well spent, er, wasted! I'm sure...
  • john galtjohn galt Posts: 957member
    Quote:
    Originally Posted by akhomerun View Post


    4. THE NAME! Windows Phone 7!! Screams BORING!



    I know nothing about marketing, but one would think this is a golden opportunity to ditch the moniker for good. I thought Vista would have been it, but no, it's back! Hasn't the "windows" metaphor been played...? This is the best a 200 billion dollar company can come up with? What's "windows" supposed to mean anyway?



    It stinks - like a retirement home. Just plow more money into it though. Dopes.
  • anonymouseanonymouse Posts: 6,558member
    Quote:
    Originally Posted by john galt View Post


    I think you're both missing a fundamental point: lots of tax revenue allegedly raised for "education" is actually spent on non-productive assets such as redundant overpaid administrators and pensions. So you're right, it's never actually been tried - except perhaps in private schools whose performance is constantly subjected to judgment by a market that "votes with its feet". Like the smartphone market.



    To extend the analogy, MSFT's $500M investment isn't likely to reach those who can actually deliver some return on it... because those who can aren't working for MSFT.



    What would happen if you doubled the amount of money dedicated toward "education"? You might find this an interesting read: http://www.cato.org/pubs/pas/pa-298.html



    Enjoy



    A couple of problems with this. First, it would be difficult to find a more biased source than Cato. Secondly, cherry picking a couple of anecdotes don't prove a point. The education system in this country is and has been in such a shambles for years from chronic underfunding that, no, a few years of throwing money at it isn't likely to make a difference. Nor will randomly throwing money at any problem make a difference. So, while it's easy to look at something like this and say, "See, dismal failure," it's ridiculous to think that education in this country will be improved by not "throwing money at it," for many years, consistently, and with a purpose. The current regime of standardized testing to "fix" education is a joke, and a complete waste of money.



    It may actually be too late to fix the education system in the US. Local control is a disaster -- e.g., school boards voting to teach students fake "science". Federal control would be a disaster because it would become just another political football in our current toxic political environment. It's basically a microcosm of why this country is failing while we congratulate ourselves that everything is, "the best in the world."
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