Microsoft Backs Out Of Wi-Fi Equipment Market 348
Glenn Fleishman writes "Say it ain't so! Microsoft makes good consumer Wi-Fi equipment but is exiting the market, News.com reports. They'll sell out their inventory, but won't make new models or produce new product. I can't recall a case in which Microsoft had viable products and decent sales and exited instead of spending more money to compete more effectively. Or even when they had non-viable products (Pocket PC's original OS) and spent years and billions before they had something that worked. Perhaps competition from Cisco (Linksys subsidiary), NetGear, and even Apple (which has a disproportionate marketshare) made MSFT blink."
End of support after two years? (Score:1, Insightful)
I thought there were consumer protection laws that stipulate the availability of service and support for 7 years from the date of the original sale. Isn't two years a fairly short end of life cycle for a consumer electronics product?
Nothing to offer... (Score:5, Insightful)
I've even noticed some AT&T-branded networking equipment showing up at CompUSA stores. More or less, that shelf was getting a little too crowded and stores were going to drop the weakest link if Microsoft or some other player didn't gracefully bow out soon.
Not first post! (Score:5, Insightful)
The other examples (like PDA devices) represent entirely new niches in the market, or (like mice) represent strong branding oppurtunities- if you make a good product that someone handles everyday, that's decent profits and good PR (I'm a Logitech fan myself, even swapped out the MX300's red LED for a violet one).
Re:Duh (Score:5, Insightful)
Re:Duh (Score:2, Insightful)
How hard is that?
They'll be back (Score:3, Insightful)
Seems like the don't think their current product offerings aren what they see as being the big picture in the developing market. In the future, Microsoft will be back with new products (or rehashed old ones... which in marketing speak is new) that they think gives them better leverage, market penetration, monopoly power...er...er
Regardless, they'll be back.
Matt Fahrenbacher
Microsoft hardware... (Score:5, Insightful)
MS couldn't strongarm IEEE (Score:1, Insightful)
Right now I think they are just putting their products into as many diverse markets as possible (xbox, USB mice, fat-reducing grills) so that should the opportunity to use their dominance of the OS market to take over with their own perverted standard - they'd be ready.
Or, conversely maybe they want to seed evidence that they can produce standards compliant products - and fail. That way, next time the States bring an AntiTrust case, they'll be able to point to a few instances of them not being anticompeditive.
Past hardware pullouts (Score:5, Insightful)
Re:End of support after two years? (Score:5, Insightful)
I know of no such law. Once your warranty is up, you're at the vendor's mercy for what kind of support, if any, is going to be available to you.
This is more or less what always happens when a vendor discontinues a product line... you've got an orphan product that you might as well toss when it breaks.
Then again, what's the point of servicing a broken $50 router... most flaws that would cause it to stop working usually are more expensive to fix than the thing's worth.
Re:Margins, Margins, Margins (Score:4, Insightful)
They just need to put out a product that works 100% Out-of-the-box with a Mac and it will outsell the clones, at least among the Apple market.
The clones will sell more in total, but the clones are going into the hands of the 90% of the market that isn't Apple users.
Apple tries to keep itself on the leading edge, which allows them to attach a higher price to recoup R&D. USB, Firewire, 802.11b and now 802.11g were all available on the Mac before the major PC OEM's offered them. As these products grow in market share and shrink in revenue, Apple will find something new to break into.
Re:The tide turns... (Score:-1, Insightful)
I believe that Linux is a better OS then Windows, but I can assure you that it doesn't mean that Microsoft will falter any time soon. What part of $50,000,000,000 cash reserves don't you understand? What part of 93% desktop marketshare don't you understand?
Most people agree that Linux isn't even ready for the desktop yet. Microsoft is reeling from Linux's invasion to the server world, but they are still quite cozy on the desktop market. The majority of desktop apps are programmed specifically for Windows, and if it manages to work on WINE, that's great.
Anyway, not trying to be a Microsoft fanboi. I just wish people would understand that Microsoft, although is certainly feeling threatened by Linux, is in no way afraid that they are going to be overtaken by it within the next five to ten years.
Sound hardware market (Score:2, Insightful)
Re:End of support after two years? (Score:2, Insightful)
Re:errr better look around (Score:5, Insightful)
MSFT Hardware (Score:1, Insightful)
Home networking products were introduced to jumpstart that market. Now there is plenty of good hardware available so its time to move on.
Evil tinfoil hat conspiracy theory (Score:4, Insightful)
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Why do they go into any kind of hardware? (Score:4, Insightful)
The only thing I can figure is they enter hardware markets that will help them sell more software.
I can understand this for Xbox (break into the gaming market with loss-leader hardware, but eventually sell lots of lucrative game titles).
WiFi APs though? How was this going to help them sell windoze (or any other software)?
Re:Microsoft hardware... (Score:5, Insightful)
Huh? Who's to say they can't dabble in another market?
If Microsoft want a wi-fi box with their name on it, they can headhunt good wi-fi guys from another firm and set them up with a state-of-the-art factory. Hell, they can even buy another wi-fi firm outright. Does the engineers stop becoming good at wi-fi because they're working for Microsoft? No.
When a firm that specializes in hardware builds hardware it's betting its financial future. It needs to produce stuff that's commercial and will sell enough to keep the VCs happy. When Microsoft builds hardware, it's betting its reputation. It's got deep pockets - there's more incentive to build high quality stuff with no corners cut than there is to shift boxes.
When Microsoft started selling mice they were arguably the best around. They were expensive but good and they drove the average quality in the market up. They brought innovation (wheels, etc.) with mainstream support. Same with joysticks. Good solid sticks, digital gameport interface, more buttons, force feedback. The only reason I can think of that they've got out of the PC joystick market is that there's nothing left to innovate - their products still cut it.
Re:Microsoft hardware... (Score:5, Insightful)
Amongst geeks, maybe not.
If Joe Public wants to buy a wi-fi router to work with his Microsoft Windows and he sees Microsoft make their own router he's going to be confident that it'll all work together.
Re:Margins, Margins, Margins (Score:5, Insightful)
There's very few other WiFi manufacturers chasing the dial-up crowd even though there's millions of them all over the place. For many the prospect of paying $30+ for internet access isn't too appealing when their $10 v.90 dial-up access suits them just fine. The modems other use is pretty sweet, the AP Extreme base stations can act as dial-in servers. You can dial into the base station and be on your network with all of your other systems.
All of the APs support USB printer sharing on the network which is typically a $100 device all by itself. There's also quite a few situations where external antenna jacks are a requirement for a WiFi base station. APs with external antenna jacks are rarely found in the $50 WiFi bargain bin.
Like their computers Apple's Airport base stations are more featureful products sold at a premium. Compared to cheapo base stations sold at Wal*Mart they aren't terribly good deals. Compared to other devices of the same functionality they're really competitive. I don't think they really need to do much to lock customers into their products, just offer the functionality that they want or need. It isn't so much about fighting price wars, just an unwillingness to cut out functionality to increase market share. Why compete with the Chinese clone maker cranking out millions of limited functionality base stations when they can keep selling more functional devices to the market that wants them?
Re:Why do they go into any kind of hardware? (Score:2, Insightful)
The software company argument is probably not why they dropped this though. They have been dropping software titles in gaming (sold rights to AC, AC2 & cancelled Mythica). Also remember that they have been selling Keyboards & Mice like crazy for years. Basically Microsoft is a respected brand by many people (not necessarily on slashdot and in the internet community) and if they can make money by slapping their brand onto something, by gosh they probabley will.
Re:Say WHAT? (Score:2, Insightful)
Security is NOT one of Microsoft's watch-words to begin with, and thinking that it's secure just because it uses WPA or anything else is folly- especially in the context of a company that flatly didn't give security much more than a passing thought in the design of their main product lines.
Re:Microsoft isn't omnipotent? (Score:3, Insightful)
You should do some pro forma of Microsoft's future financials based on their own past financials. Account for demographic shifts over the next 10 years (scary for most USians) with the likely effects on the Fortune 1000 (their primary paying customer base), a range of believable Linux adoption rates, trends in outsourcing, Wall Street expectations of growth, available remaining market caps in markets they actually have demonstrated talent any in, effects of corporate inertia/culture, just to name a few.
The net result is that their situation isn't nearly as a rosy as one might presume, even with that cash on hand today. Some of the likely scenarios for the next ten years will eat a lot of cash if they choose to fight for market share and growth rates, i.e. maintain the current Microsoft status quo. They could avoid it certainly if they do most of the "right" things, but chances of a crunch happening are in double digits - not a trivial or near-zero probability.
One of the reasons I'm glad I took corporate finance and accounting!
anyone else smell this coming? (Score:4, Insightful)
I am really bummed to hear this news, but when microsoft never released any firmware updates for their 802.11b line of products for over a year (actually they did end up releasing one update I believe for the base station, however it was not available through the update feature included in the wireless software) and especially when they began releasing support for WPA in their OS but never released any upgrades to allow their existing wireless products to take advantage of WPA, I started to guess that they were not too serious about competing in this market.
It Makes Sense Really (Score:2, Insightful)
They are doing what they assume the competition
should do when a niche market is ruled by a
dominant vendor: cut losses and drop out.
Re:It had the name "Microsoft" on the box (Score:2, Insightful)
Your average user looking at trying wireless for the first time, is far more likely to have actually heard of Microsoft than a lot of the other companies in the market.
Microsoft Hardware (Score:3, Insightful)
PocketPC and Tablets are a prime examples. They created the hardware platform so they could market software. I feel that their shortlived entry with sidewinder was to not only set a standard, but also to get other venders desiging hardware that takes advantage of Direct3D. Now that hardware supports it, more game developers will also suport it. It is the chicken and the egg story, but with microsoft making the rules. they tell the hardware that the software supports it and they tell the software that the hardware supports it. Then they show examples of sidewinder and Direct3D, it is so, thus said Microsoft.
I think their entry into home networking was a strategic push to get the quality and usibility up while pushing home networking as a feature of XP. and maybe, just maybe, I realy have no idea what I am talking about, but thought it sounded insightful for the karma.
I think you're a little misguided (Score:3, Insightful)
MS historicly does NOT back off, panic, or anything like that when faced with competiton. They just turn up the heat by any means they can, including some that aren't legal (hence the whole case against them). That isn't panicing, it's strategic response. When they see a market they want to be in, they get in it and usually don't quit until they are on top.
Browsers are an excellant example. It doesn't matter how they got in, people love to crow on about how they buy their way in. Yep, they do, that's how a lot of companies do it. See a good product in a market yo want to be in? Buy it. However once there, they just kept fighting and fighting with low (zero in this case) price and continuing improved versions. It worked too.
People seem to think that companies are supposed to like competition and if they try and destroy their competitors it means they are "scared" or "panicing". Not at all. CONSUMERS like competition, and it is important to a capatalism that we have it. Companies, however, do not. When someone competes with them, they compete back and try to drive the other person out of business. Both Intel and AMD are trying as hard as they can to drive the other out of the game. They aren't happily sitting and saying "ok, you take half and I take half". Hell no, they both want to have ALL the market and not have to worry about the other one.
MS is just really successful in this regard. It is partially their huge financial reserves and partially their corperate strategy. They DON'T get scared, they DON'T panic, they just keep fighting until the competition is gone.