Next Investors logo grey

Microsoft cops heat for problems with Surface PC line

Published 18-AUG-2017 15:03 P.M.

|

3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

After several reliability surveys and extensive testing, Consumer Reports has stripped its ‘recommended’ tag from Microsoft’s Surface PC line.

“Consumer Reports is removing its ‘recommended’ designation from four Microsoft laptops and cannot recommend any other Microsoft laptops or tablets because of poor predicted reliability in comparison with most other brands,” the company’s website said.

The move to denounce the tech giant’s latest offerings was unprecedented, with the website previously giving the thumbs up to past iterations from the Surface line.

In isolation, this recent news shouldn’t bother Microsoft Corp (NASDAQ: MSFT), which announced US$24.7 billion in revenue for Q4 FY2017. But Consumer Reports is no ordinary publication, with over seven million subscribers. It boasts an annual testing budget of US$25 million, and is one of the most prominent consumer advocacy outlets available.

Combined with its consistent ‘no outside advertisement or commercial influences’ stance, Consumer Reports has become one of the most trusted and respected sources in the industry.

Its testing found some troubling results where Microsoft’s Surface range is concerned, “New studies conducted by Consumer Reports National Research Center estimate that 25 per cent of Microsoft laptops and tablets will present their owners with problems by the end of the second year of ownership.”

The report took aim at the Microsoft Surface Laptop (128GB and 256GB versions) and Microsoft Surface Book (128GB and 512GB versions), claiming their estimated breakage rate was significantly higher than competitors.

It wasn’t all bad news however, with the document noting that Microsoft was still relatively new to the hardware scene and assuring readers that the products would be tested again in 12 months.

Those considering this stock shouldn’t make assumptions regarding future sales, nor should they base investment decisions on performances to date. Those considering this stock should seek independent financial advice.

Will the report hurt Microsoft’s sales?

The results will likely impact sales of the Surface line moving forward, despite Microsoft taking considerable steps to fix previous known issues. Microsoft disputed the report findings and questioned the testing standards concerned.

“Microsoft’s real-world return and support rates for past models differ significantly from Consumer Reports’ breakage predictability. We don’t believe these findings accurately reflect Surface owners’ true experiences or capture performance and reliability improvements made with every Surface generation.”

Panos Panay, who heads up Microsoft’s Surface products, reaffirmed the company’s stance on the report.

“The Surface team’s mission is and has always been to make devices that deliver great experiences to our customers and fans,” she said.

“That is why the Consumer Reports survey is disappointing. While we respect Consumer Reports, we disagree with their findings. 98% of Surface Pro 4 users and Surface Book users say they are satisfied with their device.”

Unfortunately for Microsoft its recent track record may turn consumers away, regardless of the report’s legitimacy. The world’s leading computer software company has been consistently criticised for its poor customer service, with an average score of one star (out of five) from over 700 reviews on Consumer Affairs.

It recently failed to gain traction in the smartphone market, with its ‘windows phone’ OS bowing out after only five years due to poor sales. It sold just 110 million units during that time, compared to 4.5 billion IOS and Android devices. Users cited poor app and company support for the device’s demise.

With Microsoft ramping up its production of its own laptops and PCs, the findings from Consumer Reports are a significant inconvenience for a company that is trying to find a standing in the hardware market.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.