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Ericcson Re-commits Focus On Mobile Networks

June 28, 2017 by  
Filed under Mobile

Ericsson has decided to squash its goal of winning more clients beyond the telecoms industry to refocus on selling networks to mobile phone firms in a move to cut costs and halt a dramatic fall in its share price.

The Swedish firm’s clients in its core business include Vodafone and Verizon but profits have plunged due to competition from Nokia and China’s Huawei and as telecoms companies make savings. Its shares have fallen 30 percent in two years.

Ericsson said in 2014 it would diversify so that by 2020 up to 25 percent of revenue would come from industries beyond telecoms, such as media, utilities and transport, from an estimated 10 percent in 2013.

But the plan has not worked and the company will drop the target as new chief executive Borje Ekholm repositions to focus on the core business of mobile networks.

“We will focus on telco clients and networks exclusively for now,” Ericsson’s new head of Digital Services Ulf Ewaldsson told Reuters in a recent interview.

The U-turn comes at a challenging time for Ekholm, who after only five months in the top job is being pressed by activist investor Cevian Capital, which has a $1 billion stake in the company, to make faster changes.

Ekholm unveiled a cost-cutting plan in March and announced up to $1.7 billion in provisions, writedowns and restructuring costs. He said this would include exploring options for its loss-making media arm and turning its managed services business around.

Investors welcomed the greater focus after years of disappointing investments from Ericsson, but they worry the new plan will not generate growth. Moody’s cut the company’s credit rating to junk in May, partly due to worries that the cost-cutting could hamper innovation.

Increasing dependence on telecoms operators could be risky as they are struggling to grow revenue due to fierce competition and so are unwilling to spend more on networks even as they prepare for 5G fifth-generation wireless broadband technology.

Ericsson has to prove it can remain relevant in an industry that has gone from over 10 major players to three in 20 years. Investors question whether it can do this under Ekholm who has been on the board for a decade while Ericsson lost ground.

Western Digital Re-submits 11th Hour Bid For Toshiba’s Chip Unit

June 28, 2017 by  
Filed under Consumer Electronics

Western Digital Corp and U.S. private equity firm KKR & Co LP have resubmitted an offer for Toshiba Corp’s  flash memory chip unit, in an eleventh hour effort to stop the conglomerate from signing a deal with its preferred bidder.

Western Digital, which jointly runs Toshiba’s main semiconductor plant, has been at loggerheads with its Japanese partner over the sale of the world’s No. 2 producer of NAND chips, and is seeking a U.S. court injunction to prevent any deal that does not have its consent.

The resubmission adds to uncertainty about whether Toshiba will sign a pact by Wednesday with the firm’s preferred bidder – a group led by Japanese government investors and including Bain Capital that has offered around 2 trillion yen ($18 billion).

The crisis-wracked Japanese conglomerate is rushing to sell the unit to cover billions of dollars in cost overruns at its bankrupt Westinghouse nuclear unit and had set itself a deadline of Wednesday to sign what it has called a definitive agreement.

Wednesday is the day of Toshiba’s annual shareholders meeting and while an announcement of an agreement would look better at the meeting, the deadline is self-imposed.

Western Digital will provide debt financing to facilitate a sale as part of the resubmitted bid, the U.S. firm said in a brief statement on Tuesday.

Sources with knowledge of the matter said a state-backed fund, the Innovation Network Corp of Japan (INCJ), and the Development Bank of Japan (DBJ) which are currently part of preferred bidder consortium – would be invited to join the resubmitted offer.

The sources declined to be identified as the talks were confidential. It was not immediately clear if terms of the offer had significantly changed from one tabled earlier this month that Western Digital has said met Toshiba’s minimum requirement of 2 trillion yen.

An INCJ spokesman declined to comment. Representatives for KKR and DBJ were not immediately available for comment.

In response to Western Digital’s resubmission, Toshiba released a statement reiterating that it has reviewed all proposals and is currently finalizing an agreement with the preferred bidder.

Nissan-Renault Planning Driverless Ride-hailing Service

June 23, 2017 by  
Filed under Around The Net

The Nissan Motor Co Ltd and Renault SA alliance plan to launch driverless ride-hailing and ride-sharing services in coming years, as the car makers place their focus beyond making and selling cars to survive an industry being quickly transformed by new services.

Automakers are leveraging expertise in automated driving functions for mass-market cars to develop mobility services, as they compete with tech firms such as Alphabet Inc and Uber Technologies Inc  in the fast-growing “pay-per-ride” market which threatens to hit demand for car ownership.

Ogi Redzic, head of Nissan-Renault’s Connected Vehicles and Mobility Services division, said the alliance would begin self-driving services based on its electric cars “certainly within 10 years,” though not likely before 2020.

“We think that the big opportunity for us is in automation, electric vehicles and ride-sharing and hailing together,” Redzic said in an interview on Thursday.

Nissan and Renault join a small group of automakers aiming to enter the ride-hailing market, which Goldman Sachs last month estimated would grow eightfold by 2030 to be five times the size of the taxi market.

Redzic said the Japanese and French partners were testing self-driving vehicles, and that any service would run on pre-mapped courses with predetermined pick-up and drop-off points.

The two automakers are developing the system with Japanese game software maker DeNA Co Ltd and French public transport operator Transdev SA.

German rival BMW AG is also testing autonomous vehicles for use in ride-hailing services, while Uber has been developing self-driving technology.

U.S. tech firm nuTonomy Inc and ride services company Lyft Inc, which counts General Motors Co as a major shareholder, this month announced they would begin piloting an autonomous vehicle ride-hailing service in Boston.

Redzic said to market a self-driving service, regulations need to change to allow driverless cars on roads. At the moment, most global jurisdictions do not expressly authorise vehicles to operate on regular roads without a driver.

“It doesn’t just depend on us,” he said. “To become fully driverless you need laws to change.”

Mayer Resigns As Verizon Officially Take Control Of Yahoo

June 14, 2017 by  
Filed under Around The Net

Verizon Communications Inc announced that it has officially closed its $4.48 billion acquisition of Yahoo Inc’s core business and that Marissa Mayer, chief executive of the internet company, had resigned.

The completion of the acquisition marks the end of the line for Yahoo as a standalone internet company, a storied tech pioneer once valued at more than $100 billion.

Verizon, the No. 1 U.S. wireless operator, is combining Yahoo with AOL, which it bought two years ago, to form a new venture called Oath, led by AOL CEO Tim Armstrong. Oath’s more than 50 brands include HuffPost, TechCrunch and Tumblr.

“Given the inherent changes to my role, I’ll be leaving the company,” Mayer wrote in an email to employees on Tuesday that she also posted on Tumblr. “However, I want all of you to know that I’m brimming with nostalgia, gratitude, and optimism.”

The closing of the deal, announced in July, had been delayed as the companies assessed the fallout from two data breaches that Yahoo disclosed last year.

Reuters reported last week that Verizon plans to cut about 2,000 jobs, or 15 percent, of the 14,000 employees at its Yahoo and AOL units. Verizon is expected to make cuts as early as Wednesday. Yahoo cut 15 percent of its workforce last year and AOL cut 500 jobs.

On June 16, the remainder of Yahoo not acquired by Verizon will be renamed Altaba Inc, a holding company whose primary assets will be its 15.5 percent stake in Alibaba Group Holding Ltd and a 35.5 percent holding in Yahoo Japan Corp.

Thomas McInerney, a Yahoo board member, will become Altaba’s chief executive officer.

Western Digital To Raise Bid Offer For Toshiba’s Chip Business

June 12, 2017 by  
Filed under Consumer Electronics

Western Digital Corp will increase its offer for Toshiba Corp’s prized semiconductor unit to $18 billion or more, a person familiar with the matter said, in a last-ditch effort to clinch a deal both companies consider vital.

The U.S. chipmaker is part of a consortium led by a Japanese government-backed fund. The group will present the new offer of 2 trillion yen or more by Thursday, when the struggling Japanese conglomerate is due to choose a preferred bidder for its Toshiba Memory Corp unit, the world’s second-largest producer of NAND memory chips, the person told Reuters on Saturday.

Toshiba has been favoring a rival bid from U.S. chipmaker Broadcom Ltd, which has partnered with U.S. private equity firm Silver Lake to offer 2.2 trillion yen, people familiar with the matter have told Reuters.

A spokesman for Western Digital had no comment. Toshiba could not immediately be reached for comment.

Toshiba had set a 2 trillion yen threshold for the sale as it rushes to find a buyer to cover billions of dollars in cost overruns at its now-bankrupt U.S. nuclear business Westinghouse Electric Corp.

The offer by Western Digital, a long-time partner of the laptops-to-nuclear conglomerate’s lucrative chips division, comes as uncertainty about the make-up of the groups bidding for Toshiba’s crown jewel has increased.

Western Digital has been seen by some sources as crucial to successful deal, as it jointly operates a key flash-memory chip plant with Toshiba in western Japan.

Layoffs Loom Large At AOL And Yahoo

June 9, 2017 by  
Filed under Around The Net

Citing anonymous sources, Recode is reporting that AOL and Yahoo are gearing up to issue over 1,000 pink slips as they get set to merge under a new media division at Verizon. This, the report notes, is still less than 20 percent of the total workforce.

The two companies are set to be merged under a new media division at Verizon called Oath, and layoffs are expected to deal with positions that are doubled up under the new brand. According to The Street, an AOL spokesperson did not comment on layoffs, but did acknowledge changes. “Consistent with what we have said since the deal was announced, we will be aligning our global organization to the strategy,” the spokesperson said.

Yahoo shareholders are set to vote on a proposal to authorize the sale of Yahoo to Verizon at a special meeting today.

Neither Yahoo nor AOL immediately responded to a request for comment.

Network Monitoring Co Gigamon Inc Prepares For Potential Sale

June 6, 2017 by  
Filed under Around The Net

Gigamon Inc, a U.S. network monitoring software maker,which remains in the crosshairs of activist hedge fund Elliott Management Corp, is gearing up to host negotiations with potential suitors interested in acquiring it, according to people familiar with the matter.

The move would push Gigamon closer to being acquired, after Elliott reported a 15.3 percent stake in the company in May and said it would encourage it to undergo a strategic review process that could also include a sale.

Gigamon is working with investment bank Goldman Sachs Group Inc as it prepares to engage in talks with companies and private equity firms interested in a deal, the sources said this week. No sale process has started yet, the sources added.

The sources asked not to be identified because the deliberations are confidential. Gigamon, which has a market capitalization of $1.5 billion, and Goldman Sachs both declined to comment. Elliott did not immediately respond to a request for comment.

Gigamon could attract interest from companies such as Hewlett Packard Enterprise Co and F5 Networks Inc, as well as technology-focused private equity firms such as Thoma Bravo Llc. Riverbed Technology, now owned by Thoma Bravo, bought Gigamon competitor Opnet in 2012 for $1 billion.

Gigamon, based in Santa Clara, California, makes software that is installed in large data centers to boost the flow of traffic and prevent bottlenecks. Some of its competitors have been acquired in recent months, including Ixia, which Keysight Technologies Inc bought earlier this year for $1.6 billion.

Elliott has succeeded in pushing many technology companies to sell themselves in recent years, including Mentor Graphics, LifeLock Inc and Qlik Technologies.

Are Fitness Trackers Good At Tracking Calories

June 6, 2017 by  
Filed under Around The Net

Fitness devices are reasonable at monitoring heart rate but can’t track calories burnt to save their lives.

Euan Ashley, professor of cardiovascular medicine at Stanford University, carried out some research on seven top fitness trackers to see how accurate they were.

The wrist-worn wearable devices included the Apple Watch, Basis Peak, Fitbit Surge, Microsoft Band, Mio Alpha 2, PulseOn, and Samsung Gear S2. They were pitted against gold standard medical gear.

Ashley said that while he was surprised at how good the gear was at measuring heart rate, the estimates of calorie burn was pretty pants.

“We were unpleasantly surprised at how poor the calorie estimates were for the devices — they were really all over the map.”

The team tested seven — with 31 women and 29 men each wearing multiple devices at a time while using treadmills to walk or run, cycling on exercise bikes or simply sitting.

The results, published in the Journal of Personalised Medicine said that the most errors on energy expenditure were far greater, ranging from the lowest at 27.4 percent for the FitBit Surge to the highest error of 92.6 percent for the PulseOn device.

The errors in energy expenditure, said Ashley, could be down to a range of factors including problems with the devices’ algorithms or poor data input by users. Errors were found to vary due to factors including sex and mode of exercise [isn’t sex a mode of exercise? ed]

The team says the findings have ramifications for those relying on their fitness trackers as a measure of their health.

“When you consider that people are using these estimates to make lifestyle decisions like what they are going to eat for lunch then I think that is something that is worth knowing and people should know to take these estimates with more than a pinch of salt,” Ashley said.

Courtesy-Fud

Samsung On The Hunt For Acquisitions

May 23, 2017 by  
Filed under Consumer Electronics

Tech giant Samsung Electronics Co Ltd plans to continue their hunt for acquisition opportunities, a company executive said on Monday, as the firm seeks to build software and services to further differentiate its products.

“We are going to be bullish on finding companies that fit our strategy,” Peter Koo, a senior vice president for Samsung’s mobile division, said during an investor event in Hong Kong. He did not elaborate on specific targets or technologies that Samsung is looking to acquire.

The world’s top maker of memory chips, smartphones and televisions has grown more aggressive in acquiring companies in recent years, breaking from its past preference to rely on its own talent and use its cash for capital expenditures amid intensifying competition from the likes of Apple Inc and Huawei Technologies Co Ltd.

In addition to buying firms such as Viv Labs and LoopPay, deals that bolstered Samsung’s existing efforts for artificial intelligence and mobile payments services, Samsung is also spending money to break into new businesses.

The firm completed an $8 billion acquisition of Harman International Industries early this year, its biggest ever deal, in an attempt to speed up its entry into the automotive components industry and develop a new growth engine.

Koo said Samsung’s aim with software and services is to primarily make its products more attractive to consumers, and that the firm will look for partnerships as well as acquisitions to bolster its offerings.

Snapchat Reports Slowing User Growth

May 12, 2017 by  
Filed under Around The Net

Snap Inc shares took a deep dive after the owner of Snapchat reported slowing user growth and revenue in its first earnings report as a public company, missing some Wall Street estimates as it competes with copycat messaging apps.

Shares tumbled 23 percent in after-hours trading to wipe some $6 billion from Snap’s market value, a reversal for the company after a red-hot March initial public offering that was the biggest for a U.S. tech company since Facebook Inc’s 2012 debut.

The stock fell to $17.66, just above its IPO price of $17.

Some investors were hoping Snap would surprise them with big numbers in its first quarterly report, BTIG analyst Richard Greenfield said.

“The fact that they failed to live up to expectations, let alone exceed them, disappointed people,” he said.

The performance echoed slides in Facebook and Twitter after they posted debut scorecards following their IPOs. Twitter shares cratered 24 percent the next day, while Facebook’s tumbled 11 percent, still the biggest-ever one-day losses for both.

Snap Chief Executive Evan Spiegel sought to reassure investors during an earnings call, fielding a dozen questions that ranged from strategy to how it would deal with competitors.

He also did not shy away from one query that allowed him to take a feisty jab at Facebook.

“If you want to be a creative company, you’ve got to get comfortable with and enjoy the fact that people are going to copy your product if you make great stuff,” he said.

Making a comparison to the search industry, Spiegel added: “Just because Yahoo has a search box doesn’t mean they’re Google.”

Snap said its daily active users (DAUs) rose 36.1 percent to 166 million in the first quarter from a year earlier, marking a slowdown from the 47.7 percent rise for the fourth quarter and 62.8 percent jump for the third quarter that the company reported in its IPO filing.

The slowing rate of growth was in line with an estimate from JPMorgan, which accurately expected 166 million DAUs for the first quarter. Monness, Crespi, Hardt & Co Inc had pegged them even higher at 173 million.

Snap’s March IPO priced above the company’s target range as investors put aside concerns about a lack of profits and voting rights to get a piece of the action. The IPO raised $3.4 billion and gave the company a market valuation of roughly $24 billion, and shares surged 44 percent in their first day of trading.

Verizon Wireless Tops AT&T Bid To Acquire Straight Path Communications

May 12, 2017 by  
Filed under Mobile

Verizon Communications Inc, the No.1 U.S. wireless carrier, will acquire wireless spectrum holder Straight Path Communications Inc for an enterprise value of about $3.1 billion, ending a bidding war with rival AT&T.

The $184 per share all-stock offer represents a discount of 17.8 percent to Straight Path’s close on Wednesday and has an equity value of $2.3 billion.

The stock surged nearly five-fold since April 7, a day before the company first received a $95.63 per share takeover bid from AT&T Inc.

Straight Path’s shares, which had jumped 39 percent since Verizon made its final bid on Monday, plunged 20 percent to $178 on Thursday, indicating some investors were disappointed with the deal.

Straight Path, which holds a large trove of 28 GHz and 39 GHz millimeter wave spectrum used in mobile communications, will give Verizon an advantage in fifth-generation (5G) network development.

5G networks are expected to offer faster downloads and boost internet-reliant products such as self-driving cars.

Straight Path had said on Monday an unnamed telecommunications company had raised its offer to buy the company. Reuters reported, citing sources, that the unnamed bidder was Verizon.

Verizon’s bid tops AT&T’s offer of $95.63 per share, or $1.25 billion, which was announced last month.

Straight Path, which earlier agreed to be bought by AT&T, said it would terminate the previously announced deal.

Verizon will pay, on behalf of Straight Path, a termination fee of $38 million to AT&T.

Evercore was financial adviser to Straight Path and Weil, Gotshal & Manges served as company counsel on the deal.

Debevoise & Plimpton LLP served as counsel to Verizon.

Toshiba, Western Digital Clash Heat Up Over Chip Unit Sale

May 10, 2017 by  
Filed under Consumer Electronics

Toshiba Corp warned Western Digital Corp not to interfere in the sale of its prized chip unit, refuting claims it has breached a joint venture contract and threatening legal action.

The clash between Toshiba and Western Digital – both its business partner and one of the bidders for the chip unit – risks delaying or even quashing an auction that the Japanese conglomerate is depending on to plug a $9 billion hole in its accounts.

Although the two companies jointly operate Toshiba’s main semiconductor plant, Western Digital is not seen as a favored bidder for the world’s second biggest NAND chip producer, having put in a much lower offer than other suitors, sources with knowledge of the matter, have said.

The U.S. firm has argued the Japanese company is violating their contract by transferring their joint venture’s rights to the newly formed unit and has asked for exclusive negotiating rights. Chief Executive Steve Milligan is currently visiting Japan to press its case.

But in a May 3 letter sent by Toshiba’s lawyers, the TVs-to-nuclear conglomerate disputed Western Digital’ s argument and said it would pursue all available remedies if it saw continued interference in the sale process.

Western Digital’s “campaign constitutes intentional interference with Toshiba’s prospective economic advantage and current contracts. It is improper, and it must stop,” the letter, which was seen by Reuters on Tuesday, said.

In a separate letter, also dated May 3, the general manager of Toshiba’s legal affairs accused Western Digital of failing to sign some joint venture agreements.

If Western Digital refuses to sign by May 15, the chip unit would protect its intellectual property rights by suspending Western Digital employees’ access to all of the unit’s facilities, networks and databases, the letter said.

A Western Digital spokeswoman in Japan declined to make immediate comment.

For some analysts, Western Digital has the upper hand.

“From a commonsense standpoint, it’s hard to buy Toshiba’s argument that it doesn’t need approval from its JV partner because it’s almost a 50-50 joint venture,” said Masahiko Ishino, an analyst at Tokai Tokyo Research Center.

Toshiba believes that a consortium of U.S. private equity firm KKR & Co LP and Japanese government-backed investors would be the most feasible solution, a source familiar with the matter said this week.

But Western Digital has vehemently said it is opposed to a deal with Broadcom. Other suitors could also be blocked by the Japanese government which has vowed to prevent any deal that could allow the transfer of sensitive technologies and represent a risk to national security.

The source also said that Toshiba plans to report full-year results this month without an endorsement from its auditor – its second such earnings report – as disagreements over its books are unlikely to resolved.

The move puts the troubled Japanese conglomerate’s bourse listing in further jeopardy, after it submitted twice-delayed third-quarter results without approval from PricewaterhouseCoopers Aarata (PwC) last month.

Is Microsoft’s Surface Laptop Too Expensive?

May 10, 2017 by  
Filed under Computing

Microsoft made a rather surprising move by unveiling its Surface Laptop at the #MicrosoftEDU event in New York but at that price, it faces some rather stiff competition.

Microsoft is aiming at education with Windows 10 S OS, the new Microsoft Surface Laptop starts at a rather steep price of US $999 for the base version, powered by 7th-gen Kaby Lake Core i5 CPU, 4GB of RAM and 128GB of storage. Both HP and Acer have unveiled their notebooks powered by Windows 10 S, the HP ProBook x360 Education Edition, and the Acer TravelMate Spin B1 Convertible, which start at rather more reasonable US $299, coming with 11.6-inch screens, Intel Celeron CPUs, 4GB of RAM and 64GB of storage.

While it might be both lighter and thinner than any Apple Macbook as well as 50 percent faster than Macbook Air (like that was so hard to achieve), the Surface Laptop falls short when it comes to some serious competition.

Microsoft spent a lot of time talking about dimensions and the fact that the Surface Laptop is both lighter and thinner than any Apple Macbook. Measuring at 308.1×223.27×14.48mm (12.13×8.79×0.57 inches) and weighing in at 1,252g (2.76 lbs), the Surface Laptop is a fancy looking system with anodized chassis and Alcantara covered keyboard, but competition, like the Dell XPS 13, coming with CNC machined aluminum chassis and carbon fiber composite palm rest with soft-touch, is not far behind at all.

The Dell XPS 13 measures at 304x200x9-15mm (11.98×7.88×0.33-0.6inches) and weighs 1.22kg (2.7lbs) for the standard and 1.31kg (2.9lbs) for the touch version, which makes it smaller and pretty much the same weight as the Surface Laptop. 

When it comes to hardware, Dell also offers more bang for the buck, at least when it comes to high-end configurations. The most expensive version of Surface Laptop, one featuring an Intel Core i7 CPU, 16GB or RAM and 512GB of PCIe NVMe SSD is listed at US $2,199, whereas Dell will give you its high-end XPS 13 Touch with Intel 7th-gen Core i7-7560U, 16GB or RAM, 512GB of SSD storage and the 13.3-inch QHD (3200×1800) touch screen for US $1,974.99.

Dell also has the new XPS 13 2-in-1, which was introduced back in January, and which comes an UltraSharp QHD+ (3200×1800 resolution) screen or a standard 1920×1080 screen. It is powered by Intel’s latest Kaby Lake Y-series CPUs, including the Core i5-7Y54 clocked at 3.2GHz or i7-7Y75 clocked at 3.6GHZ. It can also be equipped with up to 16GB of RAM and up to 1TB of SSD storage, so this is a viable competition as well. 

HP has a neat offer with the Spectre 13-v151nr, offering a 13.3-inch FHD system with Intel Core i7-7500U CPU, 8GB of RAM and 256GB of PCIe NVMe SSD storage for US $1,249.99.

We are sure that Surface Laptop has its market but those in education will be looking at cheaper systems while those looking for a high-end notebook will probably look elsewhere as there is plenty of competition offering more than Microsoft’s new Surface Laptop, let alone the Apple Macbook line. Bear in mind that all of these high-end notebooks run on Windows 10 Home or Windows 10 Pro OS, which offer a lot more than the locked Windows 10 S OS. 

Courtesy-Fud

Does Intel’s Broadband Modem Have Security Issues?

May 8, 2017 by  
Filed under Computing

Intel’s Puma 6 Intel cable modem variants are highly susceptible to a very low-bandwidth denial-of-service attack.

Basically, the attack is pretty simple to carry out. If your target is using a Puma 6-powered home gateway, and you know their public IP address, you can kick them off the internet.

The flaw is “trivial” to exploit in the wild, and would effectively make a targeted box useless for the duration of the attack. It can be exploited remotely, and there is no way to mitigate it.

Puma 6 modems are pitched as gigabit broadband gateway. If the devices can be potentially choked and knocked out simply by receiving traffic that is a fraction of the bandwidth their owners are paying for.

The Puma 6 chipset is used in several ISP-branded cable modems, including some Xfinity boxes supplied by Comcast in the US and the latest Virgin Media hubs in the UK.

There is a class action lawsuit over the performance of cable modems with Intel’s Puma 6 chipset as the Atom chip inside cannot really cope.

Courtesy-Fud

Microsoft’s Surface Sales Take A Deep Dive

May 2, 2017 by  
Filed under Consumer Electronics

Revenue generated by Microsoft’s Surface hardware during the March quarter fell by 26% from the same period the year before, the company said in a Wall Street briefing.

For the quarter, Surface produced $831 million, some $285 million less than the March quarter of 2016, for the largest year-over-year dollar decline ever.

Microsoft blamed the portfolio’s age and increased competition from hardware partners for the fall-off. “Our Surface results fell short of expectations impacted by end-of-product-lifecycle and increased price competition,” contended Satya Nadella, Microsoft’s CEO, in the Thursday earnings call.

The Surface Pro 4, the portfolio’s top seller, was introduced in October 2015, and has not been refreshed since then.

Analysts accepted Microsoft’s reasons for the downturn.

“There is competition that is lower-priced,” said Carolina Milanesi of Creative Strategies in a Friday interview. “There’s not just more of the same, but a lot that are positioned in the same space are cheaper. And there were expectations that we would have seen a [product] refresh that we haven’t seen yet.”

Jack Gold, principal analyst at J. Gold Associates, echoed Milanesi on the age angle. The revenue decline “indicates that the aging product needs a refresh badly,” Gold wrote in a note to clients today. “Price cutting and competing vendors’ products will continue to create declines until new product is released, rumored for later this year.”

Microsoft threw cold water on any significant changes to the Surface line before June, forecasting that the current quarter will also post a revenue decline.

Initially, Surface was pitched by Microsoft as a kick-in-the-pants to its partners, the OEMs, or “original equipment manufacturers,” which until 2012 had had a lock on the Windows hardware market. Microsoft meant to show the OEMs what a cutting-edge, premium-priced device could do, and how it could best demonstrate the power of Windows.

Milanesi rejected the idea that the quarter’s revenue decline signaled retrenchment by Microsoft, that the company considered the line’s mission fulfilled by the rise in 2-in-1s from partnering OEMs.

“Surface as a revenue segment is important; it’s not just a reference design,” said Milanesi, using the term bandied when Microsoft first entered the personal computer hardware space.

One reason why Surface carries weight at Redmond, said Milanesi: The 2-in-1, tablet-slash-notebook mostly sells to enterprises, or to employees who buy it themselves for work. That plays to Microsoft’s own company-wide emphasis on corporate customers. It also brings the usual advantages earned by courting enterprises, including less price sensitivity and, unlike the consumer market, a steadier calendar that doesn’t rely on high seasonal sales at the end of each year.

Even so, Milanesi thought Microsoft was missing an opportunity by focusing on business sales of the Surface, particularly the Surface Pro. “Microsoft needs to do more than just the enterprise — such as looking at higher ed students, people who may have picked a MacBook Air — and see what they can do in that space,” she argued.

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