Microsoft Hardware: Predictions for 2015

In 2015 Microsoft will be releasing a new version of its Windows software and along with it will come the army of new PCs along with a few tablets and a smattering of phones. Amongst the many device makers will be Microsoft itself. In the three years since Windows 8 Microsoft has the Surface line of tablet PCs; it now has Lumia handsets and of course the Xbox game console.

This year has been mixed for Microsoft’s hardware division. There has been growth in sells for the Xbox but only after price cuts and major mea culpas after a slow start against SONY’s PlayStation 4. The Lumia line has been selling but in the low end and not significantly enough in America or China. After a close to billion dollar write down the Surface line up recovered to point where the device didn’t lose the software giant money; actually making a small profit. The Surface Pro 3 has been met with accolades even as reviewers complained about the lack of a real keyboard and made stale lapability jokes. According to CFO Amy Hood all three brands are on their way to profitability.

2015 will be an interesting one for Microsoft hardware. The new CEO has made a point to say that first party hardware will play a role in selling the larger Microsoft stack. Some observers have seen Satya Nadella’s comments along with others made by COO Kevin Turner as signs that Microsoft is quietly backing away from hardware. I don’t view it as that. I do think Microsoft wants a strong showing by their PC partners and they want more handset makers to make Windows phones. But I also think the company through a mix of success (if small) and necessity is seeing hardware as a serious asset in selling software.

So we are weeks away from the start of the next Tech cycle of conferences, trade shows, and developer events. The first being CES and the first Microsoft based one being later in January. I wanted to make a few predictions of where I think Microsoft hardware will be.

Okay so this year we saw the Xbox struggle to get ahead of the PlayStation right until the holidays when they dropped the price, created Kinect-less bundles, and pushed serious deals. The Xbox One still has the stigma of not being next-gen enough but it has been making steady progress. Given how early into this console generation we are a refresh for the One is likely out of the question. What may happen is we get a new, low cost device in the vein of an Xbox TV or Xbox Arcade. This would be a low cost, disc-less device that sits firmly in the living room. Now I am guessing about this device and if it does exists it will be part of any gaming stream service Microsoft is planning. With rumors of a Streaming team and previous efforts an Xbox TV could replace the Xbox 360. Outside the console there are new rumors that the Xbox team is preparing a VR headset. Previous information had the device codenamed Fortaleza and it could premier at the coming E3.

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In so many ways the Nokia hardware team was a must buy. In every way this was the only company making any headway with Windows Phone. Samsung and HTC were and are fair weather partners; coming when they need to or feel like it. And so Redmond took the hardware off of Nokia’s hands. The big question for the Lumia brand is will they make any flagship devices or will they continue to push through on the low end where they’re successful. A lot of interesting things come into play when talking mobile. My hope is to see the Lumia lineup shrink and gain some focus. At most I think six would work, splitting between high/middle/low. I expect to see at least two flagships. One will be a successor for the 1020 and the other a phablet that could push pen input. All other models would likely split the difference on technologies. The big issue for the Lumia lineup is going to be carriers. Carrier exclusivity is an issue as is making sure updates are sent out in a timely fashion. Microsoft will also have to deal with making Lumia work without the Nokia branding .

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The rumor mill (DigiTimes) has suggested the next Surface devices will go bigger or smaller; from 13 or 14 inches to an 8 inch model. The only thing we do know is Microsoft will be making another Surface and all current accessories will work with it. Personally I think there is the possibility of at least four devices. One will be a hardware refresh of the Pro 3 (updated chipset; possibly fan less), a larger Surface, and two smaller Surfaces. I don’t think Redmond will make an ARM based device.

The larger surface will either be a tablet PC or a pure laptop. Given the markets that have developed an interest in the Surface Pro, things like artists, a larger Surface could be marketed at graphics professionals. Now from the perspective of the lineup a 14 inch Surface wouldn’t make sense because it would be too big to use sans a keyboard. And while many may view the Surface as nothing more than a laptop it still needs use as a tablet. With Windows 10 refocusing on the desktop there is a remote possibility that Microsoft adds a laptop to the brand. In my mind that Surface 13 will work like every other Surface model but will come with a keyboard that makes it a true laptop. On the other end of the spectrum I expect a refresh to the non-Pro lineup. I don’t think there will be an 8 inch Mini but I do think something in the 10 inch range will be offered. There is a gap in the lineup for those who want the improvements of the Pro3 but with a smaller, lighter device. This device and the Pro 4 will most likely be fan-less devices. All these changes will also bring new TypeCovers. I think there will be a refresh and that new covers will be the type that will appeal to those who thought current TypeCovers too flimsy.

And those are my predictions for the coming year. Do not hold me to theseĀ unless they come true then I want an analyst check.

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