Panos Panay, Microsoft’s head of all things Surface, says that a discussion last week by a panel of PC industry executives regarding the future of Microsoft’s hardware business is “so far from the truth,” calling it the “tabloid rumour of the week.”
Executives, including those from Dell and Lenovo, predicted Microsoft has plans to kill its Surface line by 2019 during the presentation.
“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,” said Gianfranco Lanci, Lenovo’s chief operating officer, according to the report. These executives argue that Microsoft is growing weary of the the low profit margins stemming from its devices business. To put this sentiment in perspective, the revenue of Microsoft’s Surface business fell two percent last quarter.
Panay, however, insists that Microsoft plans to stay the course with its Surface initiative and that the brand is not going anywhere. In some ways this is likely because Microsoft’s Surface products aren’t just about sales; they’re also designed to elevate the overall quality of Windows devices. Improvements Microsoft has made to the Surface Book and Surface Pro over the years, have led to a shift in quality across the PC market and the birth of the still powerful 2-in-1 laptop category.
Back in 2013, Microsoft also took a $900 million right-off of unsold Surface inventory for its failed Surface RT tablet. Earlier this week, Joe Belfiore, the corporate vice president of operating systems group at Microsoft, revealed that Windows 10 Mobile is no longer a “focus” for the tech giant, essentially admitting that the company no longer intends to support the platform.