Again, what evidence do you have that this is the case?
Can't speak for the original poster, but I'd think Microsoft would have made things clearer if they'd had good news. This game of strategic ambiguity seems to intentionally be trying to build spin. Unless Ballmer comes out and touts activations, or the revenue numbers for WinMo7 get split out in a 10-Q I'll assume they're trying to spin the numbers to the amount that's maximally favorable for Microsoft.
Quite true, 2 Mil is the upper bound, and in no way do I think that they sold all of the OSs. However, they originally said they sold 1.5 mil and then recently announced 2 mil, so an additional 500K were sold over the holidays. So, apparently enough units sold to justify the additional OS purchases.
That's probably the case but it is also possible they were doing the channel fill in new countries. I am not really up on the WP7 rollout but know that they did not do a global launch on day 1.
I switched from a iPhone 3G to a Samsung Focus 2 weeks ago. I dont miss my iPhone at all. The interface is so much better on the Windows Phone. My 3G with iOS 4.x was a dog, so the massive performance boost is probably tainting my viewpoint.
Did you upgrade to 4.2? My mother in law still has a 3G and it works okay now that it's on 4.2. Not great, but not any worse than most Android phones from before summer/fall 2010.
Can't speak for the original poster, but I'd think Microsoft would have made things clearer if they'd had good news. This game of strategic ambiguity seems to intentionally be trying to build spin. Unless Ballmer comes out and touts activations, or the revenue numbers for WinMo7 get split out in a 10-Q I'll assume they're trying to spin the numbers to the amount that's maximally favorable for Microsoft.
Here is the thing, what numbers are they trying to spin? Your statement kind of sums up the issue (not to single you out).
People (here, the tech press and so forth) are trying to treat MS like Apple, and in terms of business models, they are not the same.
Apple makes and sells phones directly to the consumer.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
Who knows how many are in consumers' hands- people make their assumptions and go from there. Many people want to assume that the manufacturers are buying OSs for phones that are not selling, which does not make a whole lot of sense. The channel fill is slightly more logical, but then again, why fill a channel for phones that are not selling, and the telcos have know whether or not they are selling. The simplest explanation is that the phones are selling at a rate that justifies continued manufacture of the phone.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
There are a lot of definitions of "sell". Did Microsoft actually receive the cash for 2M licenses? What was the average selling price? Are there any provisions in the agreement to "return" unsold licenses? What is the sell-through rate? (as someone else mentioned, Apple has an inventory of more than 2M handsets at any given time.)
I think the problem is that people are interpreting this 2M as some indicator of WM7 popularity when it's too vague a number to accurately judge. Because if the way WM7 upgrade checks and market work, I would assume Microsoft actually has a pretty accurate picture of real handset activations and the fact that they haven't shared tells me more than the 2M number they have shared.
Here is the thing, what numbers are they trying to spin? Your statement kind of sums up the issue (not to single you out).
People (here, the tech press and so forth) are trying to treat MS like Apple, and in terms of business models, they are not the same.
Apple makes and sells phones directly to the consumer.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
Firstly this wasn't an earnings report, which would obviously be a better metric to judge. Secondly, they specifically used the word "ship" rather than "sold" because they know the words are not equivalent. You make a mistake to consider those terms synonyms.
Quote:
Who knows how many are in consumers' hands- people make their assumptions and go from there. Many people want to assume that the manufacturers are buying OSs for phones that are not selling, which does not make a whole lot of sense. The channel fill is slightly more logical, but then again, why fill a channel for phones that are not selling, and the telcos have know whether or not they are selling. The simplest explanation is that the phones are selling at a rate that justifies continued manufacture of the phone.
There is too much ambiguity in their wording to assume the simplest explanation is the whole story. What I did notice from the original article is that one of their licensees, LG, is disappointed with the sales. Meanwhile T-Mo and AT&T won't reveal numbers sold although they claim to be satisfied with the sales pace.
The fact is that if Microsoft had a huge number of devices in people's hands, we wouldn't see them use the word "shipped". The word is used specifically to confuse the matter.
However, as many have pointed out here, there are many conditions attached to this statement.
How many phones have actually made into the hands of consumers? How many are in inventory? Why is MSFT reporting the numbers in this manner instead of the number of activations which would end the doubt/discussion of the numbers? Has MSFT incentivized the OEMs to build the phones? Are they subsidizing the cost? How much in advertising did they spend over the holidays to sell the licenses that were actually sold? Maybe part of the advertising budget was to incentivize the building of the phones.
Lots of questions which we may get the answer with the MSFT earnings report. Personally, from what I have seen on the web, I don't like the look of the phone. But anything close to this 2 million number is a good start for MSFT, especially if people like their new phones.
I don't know exactly what the business model for the phone might be but I would bet that MSFT would be willing to spend big bucks to get people to get on this new platform. Attracting people to the platform now is especially important if they don't want to fizzle out against iOs and Android so I see MSFT trying just about anything to buy share at this point. The longer people stay within an ecosystem, the more difficult it will be to get them to give it up so MSFT really has to make up some significant ground very fast. This will be what the problem will be for HP and their PalmOs as well. To get enough people to their ecosystem to make the platform profitable and worthwhile to continue to develop for.
If you are referring to shipped and sold, in this situation they are because each of those smartphones shipped to carriers means a WP7 license sold to the vendor.
It?s too early to tell if WP7 will improve their position but I don?t think 2M is bad at all for this launch. MS was already floating around 10% smartphone marketshare with WM6 devices and a knowledge that WP7 was coming so I?d think they?d improve on that in the coming quarters.
solipsism, your response is utter nonsense - your statement is totally false. "Sales" is ultimately to endusers, and "shipped" is filling the sales channel, these are two entirely different things. According to what you stated, cars sitting on dealer lots are actually already "sales", but in fact they are unsold inventory. Ultimately, in this scenario, it is only when the ultimate enduser buys the product with that it can be considered sold. MSFT is not being open or forthright in their dissemination of data and is clearly obscuring the real sales numbers to protect their hopeless image.
solipsism, your response is utter nonsense - your statement is totally false. "Sales" is ultimately to endusers, and "shipped" is filling the sales channel, these are two entirely different things. According to what you stated, cars sitting on dealer lots are actually already "sales", but in fact they are unsold inventory. Ultimately, in this scenario, it is only when the ultimate enduser buys the product with that it can be considered sold. MSFT is not being open or forthright in their dissemination of data and is clearly obscuring the real sales numbers to protect their hopeless image.
Yes, cars sitting on dealer’s lots already include sales. For instance, Firestone tires on an unsold car were already paid for by the auto manufacturer to Firestone. This is how I’m assuming the purchase of an OS license works. The OS is a single part of the entire product. Why should it matter to Firestone in the short run if they already are paid for those tires or are you saying that Firestone doesn’t get paid for the tires until after it’s purchased by a consumer.
Maybe MS and their vendors have some deal where they only pay for Windows Phone licenses that are activated by carriers or whatever, but I haven’t seen any evidence of that and I don’t think that is how MS has been selling their licenses to vendors in the past. If you have evidence that backs up your position please post it.
PS: Don’t dealerships work by purchasing automobiles directly from the manufacturer at a wholesale price? Aren’t they more akin to how Best Buy would purchase x number of units to sell to customers?
Yes, cars sitting on dealer?s lots already include sales.
Not only that, for the car manufacturer, the car is SOLD to the dealer the second it leaves the door of the factory. Even when it sits in the lot outside of the factory, it is already owned by the dealer.
Last time I was at the Nissan Smyrna plant in Tennesse, there was a big KA-CHING on the loudspeaker by the door where the cars leave the factory. This happened everytime a car was produced and left the building. A nice little reminder to the employees that more cash was rolling in.
Don't forget that Apple's iPhone efforts will not be standing still for those two years. But it is good to see MS come to market with a solid effort.
I think herein another implied statement of logic is made. Many people give Microsoft a lot of credit for releasing a winner with Windows 7. I agree, it's a good operating system. They've finally released a reasonably stable, reasonably secure, reasonably functional operating system. For Windows users, this is a great thing. For the rest of us, we've been using a reasonably stable, reasonably secure, reasonably functional operating system for years. Why would I buy a product from a company that's just now finally made that achievement when I can buy a product (or in Linux, use a free product) that was there countless versions ago...?
I think herein another implied statement of logic is made. Many people give Microsoft a lot of credit for releasing a winner with Windows 7. I agree, it's a good operating system. They've finally released a reasonably stable, reasonably secure, reasonably functional operating system. For Windows users, this is a great thing. For the rest of us, we've been using a reasonably stable, reasonably secure, reasonably functional operating system for years. Why would I buy a product from a company that's just now finally made that achievement when I can buy a product (or in Linux, use a free product) that was there countless versions ago...?
Microsoft is terrible at migrating users from old to new. They managed to transition DOS users to Windows 3.1, then to Windows 95/98. Because 3.1 and 95/98 were built on top of DOS. "Whipped cream on a road apple," as Scott McNealy used to say.
Microsoft didn't do so well migrating people to NT.
What are you talking about? Windows XP did a great job of migrating people to NT.
Comments
Being an AAPL shareholder, I'd like to see MS do better. I'm pretty sure that every WP7 phone sold is one less Android sold.
This makes Apple's iAd that much more attractive to advertisers.
Bingo!
Again, what evidence do you have that this is the case?
Can't speak for the original poster, but I'd think Microsoft would have made things clearer if they'd had good news. This game of strategic ambiguity seems to intentionally be trying to build spin. Unless Ballmer comes out and touts activations, or the revenue numbers for WinMo7 get split out in a 10-Q I'll assume they're trying to spin the numbers to the amount that's maximally favorable for Microsoft.
Quite true, 2 Mil is the upper bound, and in no way do I think that they sold all of the OSs. However, they originally said they sold 1.5 mil and then recently announced 2 mil, so an additional 500K were sold over the holidays. So, apparently enough units sold to justify the additional OS purchases.
That's probably the case but it is also possible they were doing the channel fill in new countries. I am not really up on the WP7 rollout but know that they did not do a global launch on day 1.
Microsoft got paid all the same.
I switched from a iPhone 3G to a Samsung Focus 2 weeks ago. I dont miss my iPhone at all. The interface is so much better on the Windows Phone. My 3G with iOS 4.x was a dog, so the massive performance boost is probably tainting my viewpoint.
Did you upgrade to 4.2? My mother in law still has a 3G and it works okay now that it's on 4.2. Not great, but not any worse than most Android phones from before summer/fall 2010.
Can't speak for the original poster, but I'd think Microsoft would have made things clearer if they'd had good news. This game of strategic ambiguity seems to intentionally be trying to build spin. Unless Ballmer comes out and touts activations, or the revenue numbers for WinMo7 get split out in a 10-Q I'll assume they're trying to spin the numbers to the amount that's maximally favorable for Microsoft.
Here is the thing, what numbers are they trying to spin? Your statement kind of sums up the issue (not to single you out).
People (here, the tech press and so forth) are trying to treat MS like Apple, and in terms of business models, they are not the same.
Apple makes and sells phones directly to the consumer.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
Who knows how many are in consumers' hands- people make their assumptions and go from there. Many people want to assume that the manufacturers are buying OSs for phones that are not selling, which does not make a whole lot of sense. The channel fill is slightly more logical, but then again, why fill a channel for phones that are not selling, and the telcos have know whether or not they are selling. The simplest explanation is that the phones are selling at a rate that justifies continued manufacture of the phone.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
There are a lot of definitions of "sell". Did Microsoft actually receive the cash for 2M licenses? What was the average selling price? Are there any provisions in the agreement to "return" unsold licenses? What is the sell-through rate? (as someone else mentioned, Apple has an inventory of more than 2M handsets at any given time.)
I think the problem is that people are interpreting this 2M as some indicator of WM7 popularity when it's too vague a number to accurately judge. Because if the way WM7 upgrade checks and market work, I would assume Microsoft actually has a pretty accurate picture of real handset activations and the fact that they haven't shared tells me more than the 2M number they have shared.
Half because she must have a keyboard... and half because I wanted to try a wp7.
I have the iPhone 4 and of course I love it, but I will say, the wp7 is really a nice OS.
It's easy to use, I like the UI even though when I first glance I thought I would hate it.
I thought it was horrible when I saw it on the web. Much better in person.
After playing with her phone, color me impressed.
I could move to the platform and be "happy". wait ... "Satisfied"
It's Not as good as iOS, but iOS has had years of updates to get it as polished as it is now.
Give Microsoft 2 years of updates and polish and it very well may be better than iOS.
WP7 OS is good folks. Don't bash it if you haven't used it for a week or two.
Microsoft did as well with WP7 OS as it did with windows 7.
Here is the thing, what numbers are they trying to spin? Your statement kind of sums up the issue (not to single you out).
People (here, the tech press and so forth) are trying to treat MS like Apple, and in terms of business models, they are not the same.
Apple makes and sells phones directly to the consumer.
MS does not. So, when MS announces sales numbers, thy announce what they sell - which is an OS to a third party manufacturer. There is no spin - they are a publicly traded company and have to report to the SEC - they are stating what they sold, which is 2 mil OSes.
Firstly this wasn't an earnings report, which would obviously be a better metric to judge. Secondly, they specifically used the word "ship" rather than "sold" because they know the words are not equivalent. You make a mistake to consider those terms synonyms.
Who knows how many are in consumers' hands- people make their assumptions and go from there. Many people want to assume that the manufacturers are buying OSs for phones that are not selling, which does not make a whole lot of sense. The channel fill is slightly more logical, but then again, why fill a channel for phones that are not selling, and the telcos have know whether or not they are selling. The simplest explanation is that the phones are selling at a rate that justifies continued manufacture of the phone.
There is too much ambiguity in their wording to assume the simplest explanation is the whole story. What I did notice from the original article is that one of their licensees, LG, is disappointed with the sales. Meanwhile T-Mo and AT&T won't reveal numbers sold although they claim to be satisfied with the sales pace.
The fact is that if Microsoft had a huge number of devices in people's hands, we wouldn't see them use the word "shipped". The word is used specifically to confuse the matter.
I found one free in my Corn Flakes.
Now that's funny!
How many phones have actually made into the hands of consumers? How many are in inventory? Why is MSFT reporting the numbers in this manner instead of the number of activations which would end the doubt/discussion of the numbers? Has MSFT incentivized the OEMs to build the phones? Are they subsidizing the cost? How much in advertising did they spend over the holidays to sell the licenses that were actually sold? Maybe part of the advertising budget was to incentivize the building of the phones.
Lots of questions which we may get the answer with the MSFT earnings report. Personally, from what I have seen on the web, I don't like the look of the phone. But anything close to this 2 million number is a good start for MSFT, especially if people like their new phones.
I don't know exactly what the business model for the phone might be but I would bet that MSFT would be willing to spend big bucks to get people to get on this new platform. Attracting people to the platform now is especially important if they don't want to fizzle out against iOs and Android so I see MSFT trying just about anything to buy share at this point. The longer people stay within an ecosystem, the more difficult it will be to get them to give it up so MSFT really has to make up some significant ground very fast. This will be what the problem will be for HP and their PalmOs as well. To get enough people to their ecosystem to make the platform profitable and worthwhile to continue to develop for.
Neal
I found one free in my Corn Flakes.
Was that a phone or just a license?
If you are referring to shipped and sold, in this situation they are because each of those smartphones shipped to carriers means a WP7 license sold to the vendor.
It?s too early to tell if WP7 will improve their position but I don?t think 2M is bad at all for this launch. MS was already floating around 10% smartphone marketshare with WM6 devices and a knowledge that WP7 was coming so I?d think they?d improve on that in the coming quarters.
solipsism, your response is utter nonsense - your statement is totally false. "Sales" is ultimately to endusers, and "shipped" is filling the sales channel, these are two entirely different things. According to what you stated, cars sitting on dealer lots are actually already "sales", but in fact they are unsold inventory. Ultimately, in this scenario, it is only when the ultimate enduser buys the product with that it can be considered sold. MSFT is not being open or forthright in their dissemination of data and is clearly obscuring the real sales numbers to protect their hopeless image.
solipsism, your response is utter nonsense - your statement is totally false. "Sales" is ultimately to endusers, and "shipped" is filling the sales channel, these are two entirely different things. According to what you stated, cars sitting on dealer lots are actually already "sales", but in fact they are unsold inventory. Ultimately, in this scenario, it is only when the ultimate enduser buys the product with that it can be considered sold. MSFT is not being open or forthright in their dissemination of data and is clearly obscuring the real sales numbers to protect their hopeless image.
Yes, cars sitting on dealer’s lots already include sales. For instance, Firestone tires on an unsold car were already paid for by the auto manufacturer to Firestone. This is how I’m assuming the purchase of an OS license works. The OS is a single part of the entire product. Why should it matter to Firestone in the short run if they already are paid for those tires or are you saying that Firestone doesn’t get paid for the tires until after it’s purchased by a consumer.
Maybe MS and their vendors have some deal where they only pay for Windows Phone licenses that are activated by carriers or whatever, but I haven’t seen any evidence of that and I don’t think that is how MS has been selling their licenses to vendors in the past. If you have evidence that backs up your position please post it.
PS: Don’t dealerships work by purchasing automobiles directly from the manufacturer at a wholesale price? Aren’t they more akin to how Best Buy would purchase x number of units to sell to customers?
Give Microsoft 2 years of updates and polish and it very well may be better than iOS.
WP7 OS is good folks. Don't bash it if you haven't used it for a week or two.
Microsoft did as well with WP7 OS as it did with windows 7.
Don't forget that Apple's iPhone efforts will not be standing still for those two years. But it is good to see MS come to market with a solid effort.
Yes, cars sitting on dealer?s lots already include sales.
Not only that, for the car manufacturer, the car is SOLD to the dealer the second it leaves the door of the factory. Even when it sits in the lot outside of the factory, it is already owned by the dealer.
Last time I was at the Nissan Smyrna plant in Tennesse, there was a big KA-CHING on the loudspeaker by the door where the cars leave the factory. This happened everytime a car was produced and left the building. A nice little reminder to the employees that more cash was rolling in.
Don't forget that Apple's iPhone efforts will not be standing still for those two years. But it is good to see MS come to market with a solid effort.
I think herein another implied statement of logic is made. Many people give Microsoft a lot of credit for releasing a winner with Windows 7. I agree, it's a good operating system. They've finally released a reasonably stable, reasonably secure, reasonably functional operating system. For Windows users, this is a great thing. For the rest of us, we've been using a reasonably stable, reasonably secure, reasonably functional operating system for years. Why would I buy a product from a company that's just now finally made that achievement when I can buy a product (or in Linux, use a free product) that was there countless versions ago...?
I think herein another implied statement of logic is made. Many people give Microsoft a lot of credit for releasing a winner with Windows 7. I agree, it's a good operating system. They've finally released a reasonably stable, reasonably secure, reasonably functional operating system. For Windows users, this is a great thing. For the rest of us, we've been using a reasonably stable, reasonably secure, reasonably functional operating system for years. Why would I buy a product from a company that's just now finally made that achievement when I can buy a product (or in Linux, use a free product) that was there countless versions ago...?
Microsoft is terrible at migrating users from old to new. They managed to transition DOS users to Windows 3.1, then to Windows 95/98. Because 3.1 and 95/98 were built on top of DOS. "Whipped cream on a road apple," as Scott McNealy used to say.
Microsoft didn't do so well migrating people to NT.
What are you talking about? Windows XP did a great job of migrating people to NT.