Windows now accounts for mere 10% of the Microsoft’s revenue.

MrBill · 18 Mar 2016

jeffrys said:

Well i am curious here:

MS is not getting much money for Windows10, since free...

But how about the billions of downloads who gets the money for this?

Jeff

For the apps in the Microsoft Store MSFT gets a %. I've heard some say as high as 30% of the cost of the app. Seems excessive, but I don't know the exact number. It is one of the reasons why most windows development is still offered outside the store, as I understand it. Well that and the cost of retraining your Win32 developers and converting your code, and supporting your legacy Win32 code. Little things. As for free apps, I don't know if there is a flat fee there or not. So many apps can be free and have embedded ads. I imagine there is some skimming there as well.

lehnerus2000 · 18 Mar 2016

windowsnt said:

False assumption. The markets can and do coexist. Phones, tablets and other devices do not spell the demise of the desktop or laptop. Workstations are still preferred for, well, work, after all. Even thin-clients and 0-clients have not replaced the venerable personal computer. Now I have a SmartPhone, Tablet *and* a workstation of some kind. Funny how that works.

Assumptions have nothing to do with it, only profit margin.

Commercial niche markets exist because the suppliers have large profit margins.

If a manufacturer can sell 10M phones per year and make $10 profit per sale, that's $100M.
If they can only sell 1M PCs per year, they have to make $100 profit per sale to equal $100M.

How much profit does an OEM make on a $300 desktop?
How much money does it cost component makers to design, market and stockpile a dozen slightly different motherboards?

MS is willing to forgo a potential income of several billion dollars per year by not selling updates for XP (100M PCs x $50/yr).
I willing to bet that they wouldn't have to spend much money ($10M?) on programmers to do the job.

MS could still sell millions of copies of W7 and every sale would be pure profit, but they don't.

The average user doesn't like "computers", unlike (possibly the majority of) TenForums members.
If they only use Facebook and write a few Word docs, a terminal is more than adequate.

Governments (specifically Acronym Agencies) will eventually start pushing manufacturers to remove capabilities from devices by claiming their latest stupid plans have been thwarted by (for example) encryption.
See the current US (and other) governments vs Apple debacle.

Apparently no crimes were ever solved before the release of Smart Phones.

MrBill · 19 Mar 2016

lehnerus2000 said:

Assumptions have nothing to do with it, only profit margin.
Commercial niche markets exist because the suppliers have large profit margins.

If a manufacturer can sell 10M phones per year and make $10 profit per sale, that's $100M.
If they can only sell 1M PCs per year, they have to make $100 profit per sale to equal $100M.

How much profit does an OEM make on a $300 desktop?
How much money does it cost component makers to design, market and stockpile a dozen slightly different motherboards?

MS is willing to forgo a potential income of several billion dollars per year by not selling updates for XP (100M PCs x $50/yr).
I willing to bet that they wouldn't have to spend much money ($10M?) on programmers to do the job.

MS could still sell millions of copies of W7 and every sale would be pure profit, but they don't.

The average user doesn't like "computers", unlike (possibly the majority of) TenForums members.
If they only use Facebook and write a few Word docs, a terminal is more than adequate.

Actually this is not what we are seeing now. If you see what is selling, tablet sales are dropping off, as well as PCs.(Look at iPad sales year over year. Apple isn't doing so great.) The market is saturated. 2in1 sales are increasing, a market Microsoft created. That's because a 2in1 is literally a laptop and a tablet. So most people who need everyday computing are going to jump on this option because it is cheaper. I love my little Lenovo 11 inch 2in1 for reading and using on vacations. I think 15+ inch tablets though in a 2in1 are a bit awkward. (Of course I still have my uber tower PC to keep my geek cred.) There will still be millions of tablet users. There will still be 100's of millions of businesses that need notebooks at a minimum. I work in the financial industry and the kind of numbers we crunch can't be done on an iPad/tablet, unless you are planning on 4 hour lunches everyday while your excel reports crunch away, and seven day work weeks. Not to mention the power house machines we in IT need for our jobs.

As for prices they won't go up too much. First, because with standardization, the parts that go in a 2in1 go into an ultrabook or laptop. The parts that fit in a tower fit in a mid-range server. Graphics cards are the exception, but then enthusiast cards have always been expensive. Also, with a saturated market, if the prices increase in an effort to boost the bottom line people will simply hang on to their devices longer because they can, and in many cases already are.

Personally, I think there isn't a next big thing for the PC market. We have every shape and size there is. The market expansion will be found in niche products that make sense to interface with our devices. I can control many features on my car via my phone, and get monthly reports on its health. Other folks control their home security, hvac etc.

While Microsoft and its marketing of Windows 10 has been a pretty big fubar, their vision is not. The future is found in the services and the devices that use those services. I'm just thankful to have been in this industry long enough to see it go from roach chips, jumper switches, and soldering wires to where it is today.

lehnerus2000 · 19 Mar 2016

MrBill said:

Actually this is not what we are seeing now. If you see what is selling, tablet sales are dropping off, as well as PCs.(Look at iPad sales year over year. Apple isn't doing so great.) The market is saturated. 2in1 sales are increasing, a market Microsoft created. That's because a 2in1 is literally a laptop and a tablet. So most people who need everyday computing are going to jump on this option because it is cheaper. I love my little Lenovo 11 inch 2in1 for reading and using on vacations. I think 15+ inch tablets though in a 2in1 are a bit awkward. (Of course I still have my uber tower PC to keep my geek cred.) There will still be millions of tablet users.

The market is saturated in First World countries.

In poorer countries (from what I can tell) people buy mobile devices (phones/tablets) not desktops/laptops.
One of the last exercises we had to do in my Web Desgin course, was come up with a website that would allow eye doctors access to a stockpile of surgical videos.
The doctor who created the stockpile, stated that the project needed to be biased towards smart phones, as the doctors in poor countries had smart phones, but almost no one had desktops/laptops.

Phones/Tablets are ideal candidates for reduction to terminal-style machines.

MrBill said:

There will still be 100's of millions of businesses that need notebooks at a minimum. I work in the financial industry and the kind of numbers we crunch can't be done on an iPad/tablet, unless you are planning on 4 hour lunches everyday while your excel reports crunch away, and seven day work weeks. Not to mention the power house machines we in IT need for our jobs.

I don't think that is a problem for medium/large businesses.

lehnerus2000 said:

Businesses that needed actual PCs would just write off the purchase cost (and there's Depreciation too) so the cost would be basically irrelevant.
In First World countries, PCs cost much less to buy, than employees cost to hire, train and pay.

MrBill said:

Also, with a saturated market, if the prices increase in an effort to boost the bottom line people will simply hang on to their devices longer because they can, and in many cases already are.

Recent machines being more durable is one of the reasons that desktop sales are down.
It's also responsible for MS (and some Linux Distros) flailing around trying to bolt mobile interfaces onto desktops.

I would assume that in the desktop PC market the sub-sector with the greatest churn is Gaming PCs.
Gamers always seem to need to buy new stuff and they don't seem to care about the cost (unlike Home PCs and/or Business PCs).