Yeah it's really hard to see this as anything but a downgrade.
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Stephen Elop to become new lead of MS' devices division, including Xbox.
- Thread starter ekim
- Start date
Yeah it's really hard to see this as anything but a downgrade.
I think at $500/£429 X1 is making a profit from day 1 (a reverse of the situation with 360). It's a little bold to simply state the console will be a great success, while I agree it will turn a profit there are still a lot of negative PR plaguing the system, no thanks to the PR blunders.
Can X1 become more successful than 360? Absolutely, but MS needs to play all of its cards right after launching this thing.
Give it about a year or two (three if MS is lucky).
Not talking about units sold. I dont think the X1 has any chance of selling more units than the 360. I am talking about making more profit for MS. That should be easy since the 360 had to crawl out of billions in the red before it finally started turning profit a few years ago.
RumblePuff
Member
I don't think HTC quite have the same brand awareness and global coverage like Nokia though do they.
Xbox One will almost certainly be profitable, the problem is it simply won't bring in a billion in its first 12 months and $100 million in profit is just a rounding error to a company Microsoft's size. It just isn't big enough to be material.
Some investors rightly see consumer devices as a distraction with little upside but a huge potential downside (Surface, Xbox 360 write-downs for instance). Basically they want MS to focus on the $1B+ businesses.
Proelite
Member
That's why Ballmer consolidated the several hardware divisions into one. It's sink or swim for the entire ecosystem. Great move to counter the investors who wants to target each venture alone with their complains.
Business is never black and white. It's better to lose 100K than 1M, right? So yeah good for him for not loosing more.
MrNyarlathotep
Banned
Running the most expensive mobile ad campaign ever and turning a 5% global smartphone marketshare in 2010 into a 4% global marketshare today?
I would say that that is worse than "mildly successful". Come the fuck on.
This decision also locks the next CEO firmly into the "devices and services" strategy that so many shareholders are questioining, that any chance of an external appointment seems to have evaporated, and mini-ballmer Elop seems a lock in.
Penguins&PolarBears
Member
This guy is going to be the CEO of Microsoft. He is a great public speaker and has tons of experience in both business/enterprise and consumer/mobile markets. Elop is masterful in interviews, one of the most well-spoken CEO's I've heard.
Microsoft now has its own manufacturing plants for Xbox and some of the best hardware designers in the world. The 41 MP camera this team created for smartphones is incredibly innovative. Their phones have super sensitive touch screens that works with gloves on and clear black filter that makes a smartphone easy to read outdoors, even at the beach. This is an innovative hardware team. And their software teams have created some of the best mobile apps on the platform like Nokia Music, Here Navigation, City Lens augmented reality maps, and Pro Camera apps.
Also when you look at the quality of the Lumia phones and the acceleration of sales doubling year over year to 8 million a quarter, it is clear Nokia was on a very positive trajectory in most regions of the world. Windows Phone now has 8.5% market share in Europe vs. only 3.5% in the US were Nokia's brand is weakest and Apple is strongest. They're on the verge of outselling iPhone in numerous territories like Germany. They're already outselling Blackberry in 34 countries now. With BlackBerry collapsing Windows Phone is an uncontested 3rd place right now in smartphones. Apple is stuck on this extremely slow once a year upgrade cycle which is causing them to lose market share every year outside of the US; leaving Android and Windows as the only two platforms growing share each year.
Microsoft now has its own manufacturing plants for Xbox and some of the best hardware designers in the world. The 41 MP camera this team created for smartphones is incredibly innovative. Their phones have super sensitive touch screens that works with gloves on and clear black filter that makes a smartphone easy to read outdoors, even at the beach. This is an innovative hardware team. And their software teams have created some of the best mobile apps on the platform like Nokia Music, Here Navigation, City Lens augmented reality maps, and Pro Camera apps.
Also when you look at the quality of the Lumia phones and the acceleration of sales doubling year over year to 8 million a quarter, it is clear Nokia was on a very positive trajectory in most regions of the world. Windows Phone now has 8.5% market share in Europe vs. only 3.5% in the US were Nokia's brand is weakest and Apple is strongest. They're on the verge of outselling iPhone in numerous territories like Germany. They're already outselling Blackberry in 34 countries now. With BlackBerry collapsing Windows Phone is an uncontested 3rd place right now in smartphones. Apple is stuck on this extremely slow once a year upgrade cycle which is causing them to lose market share every year outside of the US; leaving Android and Windows as the only two platforms growing share each year.
Outselling Blackberry is like outselling WebOS enabled phones.
It's never had its own division. I don't know about the original Xbox, but the since the 360 in 2005 the Xbox business has been sharing the Entertainment and Devices Division with Zune, and more recently Windows Phone and Skype. Did it matter in 2006 or 2007? I'm guessing you'd say no, so why do you think it matters now?
It also may surprise you to discover that Mattrick never only had to worry about the Xbox business. As head of the whole division he had to worry about everything in it.
It's funny that that's exactly what Mattrick was. You could argue he had more of a gaming background than any other executive at Sony or Nintendo (apart from the obvious people), yet people didn't like him and were happy when he left.
Penguins&PolarBears
Member
ValueAct has been neutered according to the agreement announced on Friday. As part of the deal of having a board seat they have legally agreed they can never publicly speak out against the company, criticize the CEO, or wage any kind of a proxy battle against the board.
Basically they can't do anything to rally support outside of the board room, get new board members nominated. Inside the board room, Gates, Ballmer, and Thompson are going to call the shots.
tensuke
Member
Nokia was on the way down already but Elop was the trojan horse from MS getting it ready to be swallowed up. They totally ditched what made them great, high-tech smartphones running Linux...Nokia just never caught up with the others in terms of phone tech, they ditched Maemo and Meego (stupid), and they announced the death of Symbian while moving to WP. It's not entirely his fault, but, if there's one CEO I absolutely cannot stand, it's Elop. I can't see him doing anything good for Xbox.
MrNyarlathotep
Banned
They don't need to wage a proxy battle - they are on the board.
I don't see how being on the board but not being allowed to call Ballmer a retarded monkeyman publically in any way neuters them. they are on the board and have actual decision making power.
I am waiting for Elop's letter to announce that Xbox is a burning platform and they have to jump into the stormy sea. Cancels Xbox One and goes all out on Mobile games with Xbox division.
(P.S. In the long term that strategy would actually win out, I think in 10 years or so, "console" gaming will be smartphones connected to a TV and controller).
(P.S. In the long term that strategy would actually win out, I think in 10 years or so, "console" gaming will be smartphones connected to a TV and controller).
How much and in what way he influences the games division has yet to be determined. I'm sure he'll have most of his subordinates taking a lot of control. I doubt he'll make as big of a difference as say Kaz, who started in the games division and worked his way up. Which I think was a brilliant move to bring their best brand back to the sort of relevance they had in the PS1/PS2 days.
Penguins&PolarBears
Member
Elop is not going to work on Xbox. Do you understand how much of a demotion that would be to go from running the largest mobile phone manufacturer and mapping company in the world to running a video game console business? This guy was also responsible for running MS Office, the most profitable division at Microsoft. He has not been demoted to Xbox. The position he is holding on the devices team is probably a temporary transition to becoming CEO as he integrates the Nokia team into Microsoft. Julie Larson Green will probably get her job back by 2014.
The fact that you think this guy is going to be wasted on managing Xbox day to day is hysterical.
Marc Whitten or Phil Spencer will probably take over the Xbox team eventually.
He ran the business division at MS which is now by far their most profitable. He was directly responsible for MS Office and Dynamics.
How are there tons of better choices? He has CEO level experience in both the mobile device industry and the business/enterprise industry. He has already been the CEO of 32,000 employees that just joined Microsoft including the entire Nokia hardware management team.
The fact that you think this guy is going to be wasted on managing Xbox day to day is hysterical.
Marc Whitten or Phil Spencer will probably take over the Xbox team eventually.
He ran the business division at MS which is now by far their most profitable. He was directly responsible for MS Office and Dynamics.
How are there tons of better choices? He has CEO level experience in both the mobile device industry and the business/enterprise industry. He has already been the CEO of 32,000 employees that just joined Microsoft including the entire Nokia hardware management team.
That doesn't matter at all. ValueAct got what they wanted. Now they can try and convince the other board members in private, rather than agitating from the outside.
They want a few things:
- Increase share price through a stock buyback or other
- Increase dividend
- Sell off non-core divisions (like Xbox...maybe)
MrNyarlathotep
Banned
No, the majority vote calls the shots. Gates Ballmer and Thompson do not have veto power, nor do they have a majority vote alone.
EDIT:
I would say that as the "devices and services" mantra is clearly Ballmers baby, if it didn't happen now (and force the next CEO to #dealwithit) it might not have happened at all
weevles
Member
So they didn't trust Julie to run Xbox?
But I can see why Elop is in. MS's fortunes are now tied into hardware as much as software with their huge investments in mobile phone and the Xbox brand. Elop has experience with the former and MS certainly needs some smooth talkers after the big communications breakdowns this year.
But I can see why Elop is in. MS's fortunes are now tied into hardware as much as software with their huge investments in mobile phone and the Xbox brand. Elop has experience with the former and MS certainly needs some smooth talkers after the big communications breakdowns this year.
Penguins&PolarBears
Member
The board is going to support Gates though, the founder and chairman. The decision to buy Nokia's hardware business including manufacturing means there is no chance of selling Xbox.
There is potential to split Microsoft into two companies "Microsoft Services" & "Microsoft Devices" but that's it.
Even that then becomes complicated when you try to figure out where Windows goes in that equation as none of the hardware teams can accomplish anything without Windows and Windows would be the only "service" that doesn't run on other platforms.
Windows and Xbox/Surface/Lumia would probably all go together in Microsoft Devices. Office, Azure, Bing, Skype and enterprise technologies in the other Microsoft. You could get two Microsoft's, but you will not see Xbox sold off.
Basically you would have a Microsoft Devices that mimics Apple's business right down to the retail stores and a Microsoft Services that competes directly with Google's services. Two Microsoft's: One dedicated to challenging Apple, the other dedicated to challenging Google.
I think this is where someone like ValueAct is completely off. Not sure how they can think that Xbox is not a core division for Microsoft.
That guy writes like a crazy stalker ex-girlfriend. A relentlessly self-promoting crazy stalker ex-girlfriend, at that.
Maybe they looked at this chart.
malboroking
Banned
Because compared to Microsofts other divisions such as Office or Corporate software, Xbox is literally nothing. Look at the revenues brought in by Xbox compared to Office.
Edit - beaten, but seriously, look at that chart and tell me that Xbox is even slightly significant to Microsoft. A lot of shareholders believe that the focus on consumer devices is the reason their stock has been so stagnant.
So over the past four months, there have literally been four people announced to have been "in charge" of the Xbox division at Microsoft. Don Mattrick, who then resigned, leaving Steve Ballmer (for a short period), who announced Julie Larson as the head of the new Devices and Services division that includes Xbox, and now after an equally short period, Stephen Elop is announced as the new new head of the division.
Posts like this... containing factual events... can easily come off as Microsoft bashing or XBOne bashing, but it's really something that should affect the confidence ANYONE has in what's going on over at Microsoft. November is here in under TWO MONTHS... and this system launches in under three months.
Steve Ballmer: Don's in charge of Xbox... everything's going great!
Don Mattrick: nope, I quit. I GOT ZYNGA MONEY BITCHES!!!
Steve Ballmer: Fine, I'll be in charge of Xbox. How hard can this be? Wait, no, this isn't going to work... let's see... ladies and gentlemen... I'm now happy to announce Julie Larson will be in charge of Xbox.
Julie Larson: Oh wow, I'm so excited and humbled to be chosen...
Steve Ballmer: Just kidding, You had over six weeks to turn things around and didn't. You're out. Stephen Elop's going to be in charge of Xbox because we bought his company's mobile division for $7.18B and your title.
Julie Larson: But six weeks is hardly enough time to...
Steve Ballmer: Sorry Julie, you report to Stephen now. I've made my decision and if there's one thing we ALL know, decisions made at Microsoft are final!
Posts like this... containing factual events... can easily come off as Microsoft bashing or XBOne bashing, but it's really something that should affect the confidence ANYONE has in what's going on over at Microsoft. November is here in under TWO MONTHS... and this system launches in under three months.
Steve Ballmer: Don's in charge of Xbox... everything's going great!
Don Mattrick: nope, I quit. I GOT ZYNGA MONEY BITCHES!!!
Steve Ballmer: Fine, I'll be in charge of Xbox. How hard can this be? Wait, no, this isn't going to work... let's see... ladies and gentlemen... I'm now happy to announce Julie Larson will be in charge of Xbox.
Julie Larson: Oh wow, I'm so excited and humbled to be chosen...
Steve Ballmer: Just kidding, You had over six weeks to turn things around and didn't. You're out. Stephen Elop's going to be in charge of Xbox because we bought his company's mobile division for $7.18B and your title.
Julie Larson: But six weeks is hardly enough time to...
Steve Ballmer: Sorry Julie, you report to Stephen now. I've made my decision and if there's one thing we ALL know, decisions made at Microsoft are final!
Twister Flipper
Member
A question: the new smartphone that will produce MS... what name they will have? The brand "NOKIA" can be used or there will be "Microsoft" logo?
Thanks!
Thanks!
Superficially I think they'll want the hardware to be Nokia but the software to be MS. At least initially. Because they still claim to be trying to license W8 to other device makers.
They can't use Nokia.
The Nokia brand name, one of the most storied marks in mobile, will never grace another smartphone.
Under the terms of Microsoft's $7.2 billion acquisition of Nokia's devices and services division, the "Asha" and "Lumia" trademarks will transfer to Redmond, but the "Nokia" mark will remain property of the Finnish company, and may only be used on featurephones running the basic Series 30 and Series 40 operating systems under a 10-year license agreement. (Nokia itself is barred from using the Nokia brand on any mobile devices at all until December 31st, 2015.) That means any future Windows Phones built by the newest division of Microsoft will be Microsoft-branded and that Nokia has said its goodbyes to a smartphone market it once helped to create.
Twister Flipper
Member
killer rin
Member
Oh please. We knew months in advance of Matrick leaving that Microsoft was looking to reorg its business. We learned that they would reveal that change come july before Matrick even announced he was going to leave.
Because Matrick up and left so close to the Reorg, Steve Ballmer and the Board of Directors decided to have Ballmer direct the E&D division for a week until they announced the reorg. No matter what, they needed to announce a new head for the division or else you basically lose a week of work due to confusion within the company and stockholders get pissed for no strategy.
Then comes the reorg where Ballmer announces the new strategy and divisions. From there he redoes the entire company and gives the Devices division their head because Balmer no longer needs to babysit the E&D with the reorg out. Then the deal with Nokia is finalized. So Ballmer and the board decide to put the person with tons of experience in the field in charge of the Devices division, as any good group of leaders would.
There is literally nothing shady about it. There is literally no backpedaling. This is them making decisions and taking action as the opportunities arise like every single fucking company does.
Demoncarnotaur
Member
I just can't help but think the Xbox may see some changes, or be split off in the future.
That seems to be a popular feeling.
Mercury Land-Snake
Member
Elop running the Xbox division is terrible news. He's really fucked over Nokia the last few years, terrible decisions after terrible decisions.
RIP in peace Xbox.
RIP in peace Xbox.
D
Deleted member 10571
Unconfirmed Member
Can't wait for the next Bosman BOTB skit.
If Microsoft is smart, the smartphone will just have the Asha and Lumia brandings should they not be able to use the Nokia name. After all, there are very few times, at least with the successful Xbox line's branding, that Microsoft's branding is used. Asha and Lumia should be the brands, only that Microsoft makes them and that it uses Microsoft's Windows Phone 8 OS.
tfur
Member
This is them in disarray. Seriously, you cannot spin this. It may end up great and wonderful, but it is the definition of disarray and shambles.
This is what you see when directors and managers have no confidence.
For reference, please see: Zune, Kin, Surface RT, Windows Phone, Windows 8, write downs, etc... and now the Xbox delirium. It's a hot mess.
I'm sure Julie Larson think's it's just peachy! Two steps forward, one step back.
I get that people quit and reorgs happen and Ballmer in charge of the Xbox division was always a stopgap. That said, I still stand by four people in charge of the division in less than four months. Why announce Julie Larson is taking it over to announce six weeks later that she's going to now report to the NEW guy heading that division?
Had Microsoft been delivering a smart, focused, constant message with the Xbox One this whole time, it would be a non issue... a company with plans and contingencies in place to weather things like unexpected departures of key staff. We aren't in that reality though, we're in the clusterfuck pre-launch period where they've cycled through four leaders in fewer months... UNLIKE (as you so eloquently put it) "every single fucking company does". So yeah, I think it's worth noting.
killer rin
Member
Its not Disarray. This is literally them making decisions based on new information and assets they have access to.
If you were a company and you had chosen putting a non-hardware leader into a hardware division based on previous assets. And then you find out after the fact that a top hardware company has accepted your purchase offer. You would be bloody nuts to not put the hardware companies CEO in charge of your new hardware division If only for experience alone. Also keep in mind that the Reorg hasn't even started yet. Xbox is still currently being run by Steven Ballmer until the Xbox One Launches, at which point the software, servers and hardware teams get split up into their new respective groups at the company. Windows Phone wont be entering into the new groups until they finish WP Blue, and Windows 8 wont be entering their new division until 8.1.
To repeat. Julie Larson Green wouldn't have been in charge of Xbox until Xbox One shipped. Until then, its still being run by Ballmer. Thats how it was explained in the Memo he put out. All of this is just shuffling the cards of changes which have yet to take effect.
Because Microsoft didn't know if Nokia was going to accept the purchase offer. They needed to announce a new head for the division or else stockholders would have been furious and consumers wary. They didn't want to wait for Nokia to decide to accept the offer either because if Nokia turned it down, like they did before earlier this year, Microsoft would have been waiting for nothing.
Sure, every company turns over the head of a division 2 or 3 times in the months before an incredibly important, once-every-five-years platform refresh. And anyway, the rollout has been perfectly smooth. Nothing to see here, just business as usual
People familiar with the matter have told Bloomberg that, despite just scooping up Nokias handset division, Microsoft has not lost it taste for some Blackberry also.
http://www.bloomberg.com/news/2013-...2-billion-deal-with-soul-searching-nokia.html
It's not over yet.
Ballmer sweeping up everything before retiring.
http://www.bloomberg.com/news/2013-...2-billion-deal-with-soul-searching-nokia.html
It's not over yet.
Ballmer sweeping up everything before retiring.
tfur
Member
Yeah, it really is disarray. Again, this is not normal, and neither does it show signs of health.
Be clear, Nokia without the Microsoft buyout was destined to fail. They had regularly been taking half a billion dollar investments from MS to stay afloat.
Microsoft had to do this, otherwise if Nokia went bankrupt, there would essentially be NO windows phone makers. Microsoft has no choice but to buy Nokia to try to catch up. Microsofts mobile and tablet space is a mess, and they are fighting for relevance in this space. These are Ballmers' death throws.