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A year of healthy progress along Microsoft strategic ambitions

Microsoft Stock Price for the last 5 years — July 22, 2016:Microsoft Stock Price for the last 5 years -- 22 July, 2016 My earlier posts related specifically to this 3 years overall transition history:
– Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013
– Microsoft reorg for delivering/supporting high-value experiences/activities as of July 11, 2013
– An ARM-focussed Microsoft spin-off could be the only solution to save Microsoft in the crucial next 3-years period as of August 24, 2013
– Opinion Leaders and Lead Opinions: Reflections on Steven Sinofsky’s “Era of Continuous Productivity” vision as of September 1, 2013
– The question mark over Wintel’s future will hang in the air for two more years as of September 15, 2013
– Microsoft could be acquired in years to come by Amazon? The joke of the day, or a certain possibility (among other ones)? as of September 16, 2013
– Sinofsky’s ‘continuous productivity’ idea to be realised first in Box Notes as of September 21, 2013
MS FY15 NEW STRATEGIC SETUPMicrosoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft as of July 23, 2014
– Steve Ballmer on leaving Microsoft, relationship with Bill Gates: “We’ve dusted-up many times”, on His Biggest Regret: “doing hardware earlier [for being] more effective in phone business” AND on Amazon: “They Make No Money.” as October 25, 2014
– The Empire Reboots — Can C.E.O. Satya Nadella Save Microsoft? | Vanity Fair, Oct 27, 2014

WPC Day 1: The Digital Transformation Opportunity from Microsoft Partner Network UK Blog as of July 11, 2016:

“Empower every person and every
organisation on the planet to achieve more”
The Microsoft Mission

At the core of today’s opening Worldwide Partner Conference keynote was ‘Digital Transformation’ aka the desire of CEO’s to use technology to change business outcomes – whether it be how they:

  • Engage their customers,
  • Empower employees to make better decisions,
  • Optimise their operations,
  • Build up the predictive power within their organisations so that every operation is intelligent,
  • Transform their products and services.

Digital Transformation = An Unprecedented Partner Opportunity

Every customer of every size business (startup to Enterprise) is not only looking to use digital technology, but to build digital technology for their own.

Digital-transformatoin-all-partner-types1-1024x530[1]

Businesses are looking to drive greater efficiency – automating processes and enhancing productivity, particularly in those areas where there are operating expenses. This poses an unprecedented opportunity for you no matter what partner type you are.

Digital Transformation Opportunity by Microsoft and Partners -- July 11, 2016Microsoft Ambitions to Drive Digital Transformation

Microsoft has three core ambitions which play a fundamental part in digitally transforming businesses:

  • Re-inventing Productivity and Business process
  • Building the Intelligent Cloud
  • Create more Personal Computing

These will be covered in more detail over the next two days keynotes, however, Satya provided some great examples of what these 3 ambitions entail.

1) Re-inventing Productivity and Business Process

This is all about removing the barriers between productivity tools and business applications. Satya focused on two key areas:

  • ‘Conversations as a Platform’: Using human language understanding personal assistants and Bots (conversational interfaces) which augment our connection with technologies. (Watch the demo 48 minutes into Day 1 Keynote)

2) Building out the intelligent Cloud

To showcase how intelligent cloud is helping transformation, Satya invited General Electric CEO, Jeff Immelt, on stage to discuss how he has digitally transformed the GE business.

Considering GE is over 140 years old, it’s a company that has embraced transformation and digital transformation. You can read more about their story and find out about Microsoft’s new partnership with GE to bring Predix to Azure, accelerating digital transformation for industrial customers.

Satya then went on to talk about ‘The next phase of building the Intelligent cloud’ with ‘Cognitive services’.  We’re seeing the beginnings of a new platform for cognitive services. Microsoft has taken decades of research from Microsoft Research encapsulating speech, computer vision, natural language text understanding, and made these available as API’s. These API’s are being used to infuse perception into apps – the ability for Apps/Bots to understand speech and see i.e. computer vision. These cognitive capabilities are capable of transforming business by bringing productivity gains. A great example of this is how Macdonalds are creating efficiency in their Drive Thru’s with speech/order recognition (Watch the demo 1 hour 10 minutes into the Day 1 keynote).

3) Create More Personal Computing

Create more personal computing was the third and final ambition covered. Satya discussed Windows 10 – an OS system spanning multiple devices from Raspberry PI to Hololens and bringing centralised infrastructure benefits and cost savings to business.

It was on the topic of Hololens, he discussed how personal computing is shaped by category creation moments. Moments where input and output change. ‘Mixed Reality’ is that moment. With Hololens its created an interface changing moment – Mixing real with virtual, enabling us to be anywhere and everywhere – fully untethered and mobile.

What followed was a great demo showcasing how Japan Airlines are using Microsoft HoloLens to change how they train flight crews and mechanics (Watch the demo 1 hour 17 minutes into the Day 1 keynote)

Mixed reality offers huge opportunities for partners with so many applications across so many sectors.

Expect more details on Digital Transformation and Microsoft’s three ambitions in WPC Day 2 and 3 keynotes.

News From WPC2016 Day 1

The three ambitions announced a year ago and the proof-points of healthy progress along them in FY16:

  1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:
    – core part of an overarching strategy
    – digital transformation both for us and our partnerships with customers
  2. Significant differentiation vs. Amazon AWS in Intelligent Cloud:
    – enterprise cloud leadership
    – every customer is also an ISV
    – hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers
    – meeting cloud needs of customers where they are
  3. Windows strategy to achieve progress in More Personal Computing:
    – deliver more value and innovation, particularly for enterprise customers
    – grow new monetization through services across our unified Windows platform
    – innovate in new device categories in partnership with our OEMs

The Q1FY16 progress was presented in my Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2015.

Reinvent Productivity and Business Processes“, “Build the Intelligent Cloud” and “Create More Personal Computing” were the original 3 “interlocking ambitions” the Microsoft CEO talked about at Microsoft Iginite held on May 4-8, 2015 in Chicago. The proof-points of FY16 progress are shown along that list, and explained in detail by remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016.

For more information see also:  Q4 2015 Earning Call Transcript, the 2015 Annual Report or—even better—my earlier posts indicated here under each ambition. For a deeper strategic intent underlying these ambilitions see my earlier post Julia Liuson: “Microsoft must transform from a company that throws a box with software into the market … into a company that offers pure services” published on These ambitions also became reporting segments in FY16. See Earnings Release FY16 Q1 as of October 22, 2015. The major corporate groups were also organised along these line: ASG = Application & Services Group for “Reinvent productivity and business processes” ambition, C&E = Cloud & Enterprise for “Build the intelligent cloud platform” ambition, and OSG= Operating Systems Group for “Create more personal computing” ambition.

Note that the overall strategic approach was developed 2 years ago and it was described in my post Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft of July 23, 2014:

image.png

Here are the remarks from Microsoft (MSFT) Satya Nadella on Q4 2016 Results – Earnings Call Transcript as of July 18, 2016. for details

1. Office 365, Dynamics 365, AppSource, and LinkedIn as all being part of one overarching strategy in Productivity and Business Process:

For initial and additional details available earlier see my earlier posts:
– The first “post-Ballmer” offering launched: with Power BI for Office 365 everyone can analyze, visualize and share data in the cloud as of February 10, 2014
– OneNote is available now on every platform (+free!!) and supported by cloud services API for application and device builders as of March 18, 2014
– An upcoming new era: personalised, pro-active search and discovery experiences for Office 365 (Oslo) as of April 2, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014

In fact, this last quarter, some of the most strategic announcements were all around our application platform. At our partner conference, there was a significant amount of excitement with the tools that we announced like PowerApps and Power BI, Azure functions and Flow. These are tools that our developers and system integrators and solution partners will use in order to be able to customize applications around Azure. And so to me that’s another huge advantage and a competitive differentiation for us.

1.1 Core part of an overarching strategy

The move to the cloud for our customers and for us is not just about a new way of delivering the same value just as a SaaS service. It’s really the transformation from having applications that are silos to becoming more services in the cloud where you can reason about the activity and the data underneath these services to benefit the customers who are using these services. So that’s what this notion of a graph [by Microsoft Graph] represents.

So when somebody moves to Office 365, their graph [by Microsoft Graph], their people, their relationships with other people inside the organization, their work artifacts all move to the cloud. You can connect them with all the business process data that’s in Dynamics 365, but not just in Dynamics 365 but all the applications in AppSource because business process will always be a much more fragmented market as opposed to just one market share leader by industry, by vertical, by country. And so that’s our strategy there.

And now the professional cloud or the professional network helps usage across all of that professional usage. Whether it’s in Office 365 or whether you’re a salesperson using any application related to sales, you want your professional network there. Of course, it’s relevant in recruiting, it’s relevant in training, it’s relevant in marketing. So that’s really our strategy with LinkedIn as the professional network meeting the professional cloud. And these are all part of one overarching strategy, and ultimately it’s about adding value to customers.

1.2 Digital transformation both for us and our partnerships with customers

This past year was a pivotal one in both our transformation and in our partnerships with customers who are also driving their own digital transformation. Our progress is best captured in the results of our three ambitions, starting with Productivity and Business Process. In a world of infinite information but finite attention and time, we aim to change the nature of work with digital technology. In pursuit of this ambition, we continue to add value to our products, grow usage, and increase our addressable market. Along these lines, let me start with Office 365 and then move to Dynamics 365.

In the last quarter, we advanced our collaboration tools. We launched Microsoft Planner, which helps teams manage operations, as well as Skype Meetings, which is aimed at helping small businesses collaborate. In June, we further strengthened our security value proposition with the release of Advanced Security Management.

Lastly, we continue to add intelligence in machine learning to Office to help people automate their tasks and glean insights from data. These advancements helped to drive increased usage across enterprises, small and medium businesses, and consumers. In the enterprise, Office 365 Commercial seats grew 45% year over year, and revenue grew 59% in constant currency. Also 70% of our Office Enterprise agreement renewals are in the cloud. Innovative companies like Facebook, Hershey’s, Discovery Communications, Cushman Wakefield all adopted Office 365 and now see how transformative this service can be for their own business.

We are enthusiastic about the early feedback and growth opportunity from companies using our newly released Office 365 E5, which includes powerful security controls, advanced analytics, and cloud voice. These customers tell us that they love the simplification that comes with standardizing across all of our productivity workloads.

We will continue to grow our install base and drive premium mix through offers like Office 365 E5, but they’re very, very early days of E5. And E5 value proposition across all three of the areas, whether it’s cloud voice or analytics or security are all three massive areas for us. And I would say if anything, the initial data from our customers around security is gaining a lot of traction. But at the same time, one of the things that customers are looking for is making an enterprise-wide architectural decision across all of the workloads.

We see momentum in small and medium businesses, with a growing number of partners selling Office 365, now up to nearly 90,000, a 25% increase year over year. We continue to grab share and adding over 50,000 customers each month for 28 consecutive months.

We also see momentum amongst consumers, with now more than 23 million Office 365 subscribers. Across segments, customers increasingly experience the power of Office on their iOS and Android mobile devices. In fact, we now have more than 50 million iOS and Android monthly active devices, up more than four times over last year.

Now let’s talk about progress with the other pillar of this ambition, Dynamics 365. We are removing any impedance that exists between productivity, collaboration, and business process. This month we took a major step forward with the introduction of Microsoft Dynamics 365 and Microsoft AppSource. Dynamics 365 provides business users with purpose-built SaaS applications. These applications have intelligence built in. They integrate deeply with communications and collaboration capabilities of Office 365.

Dynamics 365 along with AppSource and our rich application platform introduces a disruptive and customer-centric business model so customers can build what they want and use just the capabilities they need. The launch of Dynamics 365 builds on the momentum we’re already seeing in this business. Customers around the globe are harnessing the power of Dynamics in their own transformation, including 24 Hour Fitness and AccuWeather. Overall, Dynamics now has nearly 10 million monthly paid seats, up more than 20% year over year, and Q4 billings grew more than 20% year over year.

Overall, Business Processes represent an enormous addressable market, projected to be more than $100 billion by 2020. It’s a market we are increasingly focused on, and I believe we are poised with both Dynamics 365 and Microsoft AppSource to grow and drive opportunity for our partners.

Across Office 365 and Dynamics 365, developers increasingly see the opportunity to build innovative apps and experiences with the Microsoft Graph, and we now have over 27,000 apps connected to it. Microsoft AppSource will be a new way for developers to offer their services and reach customers worldwide.

Lastly, with Office 365 and Dynamics 365, we have the opportunity to connect the world’s professional cloud and the world’s professional network with our pending LinkedIn deal. Overall, the Microsoft Cloud is winning significant customer support. With more than $12 billion in Commercial Cloud annualized revenue run rate, we are on track to achieve our goal of $20 billion in fiscal year 2018. Also, nearly 60% of the Fortune 500 companies have at least three of our cloud offerings. And we continue to grow our annuity mix of our business. In fact, commercial annuity mix increased year over year to 83%.

2. Significant differentiation vs. Amazon AWS in Intelligent Cloud 

For initial and additional details available earlier see my earlier posts:
– Windows Azure becoming an unbeatable offering on the cloud computing market as of June 28, 2013
Microsoft partners empowered with ‘cloud first’, high-value and next-gen experiences for big data, enterprise social, and mobility on wide variety of Windows devices and Windows Server + Windows Azure + Visual Studio as the platform as of July 10, 2013

– 4. Microsoft products for the Cloud OS [‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
– 4.5. Microsoft talking about Cloud OS and private clouds: starting with Ray Ozzie in November, 2009[‘Experiencing the Cloud’, as of Dec 18, 2013, but published only on Feb 14, 2014] (was separated from the next “half bakedness” post because of its length)
Microsoft’s half-baked cloud computing strategy (H1’FY14) as of February 17, 2014 Note that this “half bakedness” ended by the facts published in Microsoft is ready to become a dominant force in cloud computing with superior cloud offerings, a Windows ecosystem under complete renewal, first signs of Surface-Lumia-Xbox successes on the market, and strong interest in technology partnerships by other industry leaders as of October 24, 2014
– Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
– Microsoft BUILD 2014 Day 2: “rebranding” to Microsoft Azure and moving toward a comprehensive set of fully-integrated backend services as of April 27, 2014
– Scott Guthrie about changes under Nadella, the competition with Amazon, and what differentiates Microsoft’s cloud products as of October 2, 2014
– Sam Guckenheimer on Microsoft Developer Division’s Journey to Cloud Cadence as of October 19, 2014
– Microsoft Azure: Marketable machine learning components capability for “a new data science economy”, and real-time analytics for Azure HDInsight service as of October 22, 2014
Microsoft Cloud state-of-the-art: Hyper-scale Azure with host SDN — IaaS 2.0 — Hybrid flexibility and freedom as of July 11, 2015
– Microsoft’s first quarter proving its ability to become a dominant force in cloud computing with superior cloud offerings as of Januar 27, 2015
– DataStax: a fully distributed and highly secure transactional database platform that is “always on” as of February 3, 2016
– Microsoft chairman: The transition to a subscription-based cloud business isn’t fast enough. Revamp the sales force for cloud-based selling as of June 6, 2016

Cloud Growth Helps Microsoft Beat Street in Q4 from TheStreet as of July 19, 2016 

… [0:34] and Microsoft’s Enterprise Mobility [Suite]
customers nearly doubled YoY to 33,000. [0:40] …

Note that the Q1FY16 report was that “Enterprise Mobility [Suite] customers more than doubled year-over-year to over 20,000, and the installed base grew nearly 6x year-over-year“. Enterprise Mobility Suite (EMS) is a service available in the CSP (Cloud Solution Partner program) along with Windows Intune, Office 365, Azure and CRM Online. The reason for that very impressive growth was given by Satya Nadella in the much earlier Q2FY15 report as:

Microsoft Enterprise Mobility Suite is one key of product innovation that I would like to highlight given the growth and uniqueness of our offering. Microsoft offers a comprehensive solution that brings together mobile device management, mobile application management, hybrid identity management and data protection into a unified offering via EMS.

Office 365 now includes new app experiences on all phones and tablets for mobile productivity.  Further, we have released completely new scenarios. This includes Office Sway for visualizing and sharing ideas; Delve, to help search and discover content; Office 365 Groups to make it easier to collaborate; andOffice 365 Video for secure media streaming for businesses.

Finally, we continue to invest in enterprise value by integrating MDM and the Enterprise Mobility Suite into Office 365; new encryption technologies and compliance certifications; and new eDiscovery capabilities in Exchange.

Overall at the highest level, our strategy here is to make sure that the Microsoft Services i.e. cloud services be it Azure, Office 365, CRM Online or Enterprise Mobility Suite are covering all the devices out there in the marketplace. So that, that way we maximize the opportunity we have for each of these subscription and capacity based services.

2.1 Enterprise cloud leadership

Now let’s get into the specifics of the Intelligent Cloud, an area of massive opportunity, as we are clearly one of the two enterprise cloud leaders. Companies looking to digitally transform need a trusted cloud partner and turn to Microsoft. As a result, Azure revenue and usage again grew by more than 100% this quarter. We see customers choose Microsoft for three reasons. They want a cloud provider that offers solutions that reflect the realities of today’s world and their enterprise-grade needs. They want higher level services to drive digital transformation, and they want a cloud open to developers of all types. Let me expand on each.

To start, a wide variety of customers turn to Azure because of their specific real-world needs. Multinationals choose us because we are the only hybrid and hyperscale cloud spanning multiple jurisdictions. We cover more countries and regions than any other cloud provider, from North America to Asia to Europe to Latin America. Our cloud respects data sovereignty and makes it possible for an enterprise application to work across these regions and jurisdictions. More than 80% of the world’s largest banks are Azure customers because of our leadership support for regulatory requirements, advanced security, and commitment to privacy. Large ISVs like SAP and Citrix as well as startups like Sprinklr also choose Azure because of our global reach and a broad set of platform services. Last week GE announced it will adopt our cloud for its IoT approach.

Next, Azure customers also value our unique higher-level services. Now at 33,000, we nearly doubled in one year the number of companies worldwide that have selected our Enterprise Mobility Solutions. The Dow Chemical Company leverages EMS along with Azure, Office 365, and Dynamics to give its thousands of employees secure real-time access to data and apps from anywhere.

Just yesterday, we announced Boeing will use Azure, our IoT suite, and Cortana Intelligence to drive digital transformation in commercial aviation, with connected airline systems optimization, predictive maintenance, and much more. This builds on great momentum in IoT, including our work with Rolls-Royce, Schneider Electric, and others.

This is great progress, but our ambitions are set even higher. Our Intelligent Cloud also enables cognitive services. Cortana Intelligence Suite offers machine learning capabilities and advanced predictive analytics. Customers like Jabil Circuit, Fruit of the Loom, Land O’Lakes, LIBER already realize the benefits of these new capabilities.

Lastly, central to our Intelligent Cloud ambition is providing developers with the tools and capabilities they need to build apps and services for the platforms and devices of their choice. We have the best support for what I would say is the most open platform for all developers. Not only is .NET first class but Linux is first class, Java is first class. The new Azure Container service cuts across both containers running on Windows, running across Linux. So again, it speaks to the enterprise reality. .NET Core 1.0 for open source and our ongoing work with companies such as Red Hat, Docker, and Mesosphere also reflects significant progress on this front. We continue to see traction from open source, with nearly a third of customer virtual machines on Azure running Linux.

So those would be the places where we are fairly differentiated, and that’s what you see us gaining both for enterprise customers and ISVs.

On the server side, premium server revenue grew double digits in constant currency year over year. New SQL Server 2016 helps us expand into new markets with built-in advanced analytics and unparalleled performance. More than 15,000 customers, including over 50% of the Fortune 500, have registered for the private preview of SQL Server for Linux. And we’re not slowing down. We will launch Windows Server 2016 and System Server 2016 later this year.

2.2 Every customer is also an ISV

One of the phenomena now is that pretty much anyone who is a customer of Azure is also in some form an ISV, and that’s no longer just limited to people who are “in the classic tech industry” or the software business. So every customer who starts off consuming Azure is also turning what is their IP in most cases into an ISV solution, which ultimately will even participate in AppSource. So at least the vision that we have is that every customer is a digital company that will have a digital IP component to it, and that we want to be able to partner with them in pretty unique ways.

That’s the same case with GE. It’s the same case with Boeing. It’s the same case with Schneider Electric or ABB or any one of the customers we are working with because they all are taking some of their assets and converting them into SaaS applications on Azure. And that’s something that we will in fact have distribution agreements with.

And AppSource is a pretty major announcement for us because we essentially created for SaaS applications and infrastructure applications a way to distribute their applications through us and our channel. And I think it makes in fact our cloud more attractive to many of them because of that. So we look – I think going forward, you’ll look to see – or you’ll see us do much more of this with many other customers of ours.

2.3 Hyperscale-plus-hybrid approach with annuity focus enabling cloud lead conversation with customers

The focus for us is in what I describe as this hyperscale-plus-hybrid approach when you think about the current approach, which is pretty unique to us. Overall, I believe this hyperscale plus hybrid architecturally helps us a lot with enterprise customers because we meet them where their realities are today and also the digital transformation needs going forward, so that’s one massive advantage we have.

And the way we track progress is to see how is our annuity growth of our server business, and how is our cloud growth. And if you look at this last quarter, our annuity grew double digits and our cloud grew triple digits. And that’s a pretty healthy growth rate, and that’s something that by design both in terms of the technical architecture as well as the traction we have in the marketplace and our sales efforts and so on are playing out well, and we are very bullish about that going forward.

The Transactional business is much more volatile because of the macro environment, IT budgets, and also the secular shift to the cloud. The question again that gets asked is about the cannibalization. But if you look at Boeing or you look at any of the other examples that I talk about when it comes to the cloud, our servers never did what these customers are now doing in our cloud. So at a fundamental long-term secular basis, we have new growth, new workloads, and that’s what we are focused on, and that’s a much bigger addressable market than anything our Transactional Server business had in the past.

[Amy E. Hood – Chief Financial Officer & Executive Vice President:]
The first thing really that I think Satya and I both focus on every quarter, every month, is how much of our business are we continuing to shift to annuity and specifically to the cloud. We structure all of our motions at this company, from how we engineer to how we do our go-to-markets to how we think about sales engagement to how we do our investments, fundamentally toward that long-term structural transition in the market.

In terms of server products and services, I tend to think of it as the all-up growth. It’s really about growing the cloud, growing the hybrid, and then whatever happens in the Transactional business happens.

And so to your question on Transactional performance, there were some deals that didn’t get done in Q3 that got done in Q4, and there were some deals done in Q4 on the Office side with large companies that I’m thrilled by. But at the same time, we still will focus on those deals moving to the cloud over time. And so this volatility that we are going to see because of macro and because of budget constraints, especially on Transactional, we will focus on because we expect excellent execution and have accountability to do that in the field. But our first priority, every time, is to make sure we are focused on annuity growth and digital transformation at our company, which is best done through that motion.

In terms of the sales motion they are absolutely incented more towards cloud versus Transactional going into this year.

I do believe that every conversation that we’re having with customers is cloud-led. That cloud-led conversation and making a plan for customers to best change and transform their own business certainly is a far more in-depth one than on occasion is required by long-time Transactional purchasers, especially in Office, as an example, because what we’re talking about now is really pivoting your business for the long term.

And so I’m sure there are examples where that has elongated the sales cycle, for good reason. But I would generally point back and say most of these are driven at the structural level, which is – structurally over time, on-premises Transactional business will move to the cloud or to a hybrid structure through an annuity revenue stream.
[END BY Amy E. Hood]

2.4 Meeting cloud needs of customers where they are

The position that we have taken is that we want to serve customers where they are and not assume very simplistically that the digital sovereignty needs of customers can be met out of a fewer data center approach. Because right now, given the secular trend to move to the cloud across all of the regulated industries across the globe, we think it’s wiser for us and our investors long term to be able to meet them where they are. And that’s what you see us. We are the only cloud that operates in China under Chinese law, the only cloud that operates in Germany under German law. And these are very critical competitive advantages to us.

And so we will track that, and we will be very demand driven. So in this case we’re not taking these positions of which regions to open and where to open them well in advance of our demand. If anything, I think our cycle times have significantly come down. So it will be demand-driven, but I don’t want to essentially put a cap because if the opportunity arises, and for us it’s a high ROI decision to open a new region, we will do so.

3. Windows strategy to achieve progress in More Personal Computing

For initial and additional details available earlier see my earlier posts:
– Windows Embedded is an enterprise business now, like the whole Windows business, with Handheld and Compact versions to lead in the overall Internet of Things market as well as of June 8, 2013
– How the device play will unfold in the new Microsoft organization? as of July 14, 2013
– With Android and forked Android smartphones as the industry standard Nokia relegated to a niche market status while Apple should radically alter its previous premium strategy for long term as of August 17, 2013
– Windows [inc. Phone] 8.x chances of becoming the alternative platform to iOS and Android: VERY SLIM as it is even more difficult for Microsoft now than any time before as of August 20, 2013
– Leading PC vendors of the past: Go enterprise or die! as of November 7, 2013
– Xamarin: C# developers of native “business” and “mobile workforce” applications now can easily work cross-platform, for Android and iOS clients as well as of November 15, 2013
Microsoft is transitioning to a world with more usage and more software driven value add (rather than the old device driven world) in mobility and the cloud, the latter also helping to grow the server business well above its peers as of April 25, 2014
Microsoft Surface Pro 3 is the ultimate tablet product from Microsoft. What the market response will be? as of May 21, 2014
Windows 10 Technical Preview: Terry Myerson and Joe Belfiore on the future of Windows as of October 1, 2014
– The Era Of Sub-$90 Windows 8.1 Phones in U.S. as of October 3, 2014
– Windows 10 is here to help regain Microsoft’s leading position in ICT as of July 31, 2015
– Microsoft and partners to capitalize on Continuum for Phones instead of the exited Microsoft phone business as of June 5, 2016

We have increased Windows 10 monthly active devices and are now at more than 350 million. This is the fastest adoption rate of any prior Windows release. While we are proud of these results, given changes to our phone plan, we changed how we will assess progress. Going forward, we will track progress by regularly reporting the growth of Windows 10 monthly active devices in addition to progress on three aspects of our Windows strategy:

3.1 Deliver more value and innovation, particularly for enterprise customers

We continue to pursue our goal of moving people from needing Windows to choosing Windows to loving Windows. In two weeks, we will launch Windows 10 Anniversary Update, which takes a significant step forward in security. We are also extending Windows Hello to support apps and websites and delivering a range of new features like Windows Ink and updates to Microsoft Edge. We expect these advances will drive increased adoption of Windows 10, particularly in the enterprise, in the coming year. We already have strong traction, with over 96% of our enterprise customers piloting Windows 10.

3.2 Grow new monetization through services across our unified Windows platform

As we grow our install base and engagement, we generate more opportunity for Microsoft and our ecosystem. Bing profitability continues to grow, with greater than 40% of the search revenue in June from Windows 10 devices. Bing PC query share in the United States approached 22% this quarter, not including volume from AOL and Yahoo!. The Cortana search box has over 100 million monthly active users, with 8 billion questions asked to date.

We continue to drive growth in gaming by connecting fans on Xbox Live across Windows 10, iOS, and Android. Just this quarter we launched our Minecraft Realm subscription on Android and iOS. Overall engagement on Xbox Live is at record levels, with more than 49 million monthly active users, up 33% year over year. At E3 we announced our biggest lineup of exclusive games ever for Xbox One and Windows 10 PCs. And we announced Xbox Play Anywhere titles, where gamers can buy a game once and play it on both their Windows 10 PC and Xbox One. We also announced two new members of the Xbox One console family, the Xbox One S and Project Scorpio.

The Windows Store continues to grow, with new universal Windows apps like Bank of America, Roku, SiriusXM, Instagram, Facebook, Wine, Hulu, and popular PC games like Quantum Break.

3.3 Innovate in new device categories in partnership with our OEMs

Our hardware partners are embracing the new personal computing vision, with over 1,500 new devices designed to take advantage of Windows 10 innovations like Touch, Pen, Hello, and better performance and power efficiency.

Microsoft’s family of Surface devices continues to drive category growth, and we are reaching more commercial customers of all sizes with the support of our channel partners. We recently announced new Surface enterprise initiatives with IBM and Booz Allen Hamilton to enable more customer segments. Also in the past year, we grew our commercial Surface partner channel from over 150 to over 10,000.

Lastly this quarter, more and more developers and enterprise customers got to experience two entirely new device categories from Microsoft Surface Hub and Microsoft HoloLens. While we are still in the early days of both of these devices, we are seeing great traction with both enterprise customers and developers, making us optimistic about future growth.

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Android 6.0 Marshmallow (Android M) and its route to OEMs such as Xiaomi

Sept 29, 2015Android 6.0 Marshmallow – Official Announcement of all features (Nexus Event 2015) – GIGA TECH in 8 minutes 

Oct 6, 2015: The Top 3 new features highlighted for the Android 6.0 Marshmallow on the android.com/history

Now On Tap

Get assistance without having to leave what you’re doing—whether you’re in an app or on a website. Just tap and hold the home button.

Permissions

Define what you want to share with apps on your device and when. Turn permissions off at any time, too.

Battery

Enjoy a battery that works smarter, not garder. Marshmallow optimizes your juice for what matters most with features like Doze and App Standby.

Sept 29, 2015: All Features of Android 6.0 Marshmallow from the official Android – Marshmallow page

All about Android 6.0, Marshmallow

  • Contextual Assistance
    • Now on Tap: get assistance without having to leave what you’re doing—whether you’re in an app or on a website. Just touch and hold the home button.
    • Do more with your voice. Now you can have a dialogue with any of your apps that support the new voice interaction service. For example, if a user says “play some music on TuneIn,” TuneIn will respond by asking “What genre?”.
    • Direct Share: a fast and easy way to share to the right person in the right app.
  • Battery
    • Doze: when your device is at rest, Doze automatically puts it into a sleep state to increase your standby battery life.
    • App Standby: no more battery drain from seldom used apps; App Standby limits their impact on battery life so your charge lasts longer.
    • USB Type C support*: Quickly transfer power and data all through the same cable. Lightning fast charging gives you hours of power in just minutes.
  • Privacy & Security
    • On an Android Marshmallow device, apps designed for Android Marshmallow only ask for permission right when it’s needed. You can deny any permission and still continue to use the app.
    • Advanced controls to turn permissions on or off for all your installed apps.
    • Verified boot: when your Android device boots up, it will warn you if the firmware and Android operating system have been modified from the factory version.
    • Use fingerprint sensors* to unlock your device, make purchases in Google Play, authenticate transactions in apps, and pay in stores.
  • Android Runtime (“ART”)
    • Improved application performance and lower memory overhead for faster multi-tasking.
  • Productivity
    • Bluetooth stylus support*, including pressure sensitivity and modifier keys.
    • Improved typesetting and text rendering performance.
    • Smarter text selection, built-in undo/redo, and text actions closer to your fingers.
    • Text selection actions such as a new Translate option that lets you translate text from one language to another right on the spot. (Note: requires Google Translate app installed)
    • Save paper with duplex printing support.
  • System usability improvements
    • App links: enables installed apps to automatically handle their web URLs so you can jump right into the app, rather than the mobile web site, as appropriate.
    • Easily toggle and configure Do Not Disturb from quick settings.
    • If someone calls you twice within 15 minutes, you can choose to allow the call to ring through while Do Not Disturb is enabled.
    • Use automatic rules to enable Do Not Disturb for as many custom time blocks as you like or around events on your calendar.
    • Simplified volume controls allow you to manage notification, music, and alarm volumes easily from anywhere with the touch of your volume keys.
    • Streamlined Settings let you manage an app’s settings all in one place, from battery and memory usage, to notifications and permissions controls.
    • Google Now Launcher app list refreshed with search, fast alphabetic scrolling, and predictive App Suggestions.
  • Connectivity
    • More power efficient Bluetooth Low Energy (“BLE”) scanning for nearby beacons and your accessories.
    • Hotspot 2.0: Connect to compatible Wi-Fi networks seamlessly and securely.
    • Bluetooth SAP: Make calls from your carphone using your phone’s SIM.
    • Portable Wi-Fi hotspot now supports 5GHz frequency bands.
  • Expandable storage
    • Flex Storage: makes using SD cards or external storage devices as encrypted expanded storage for your apps and games on Android Marshmallow a whole lot easier.
  • Device setup and migration
    • Easily transfer your accounts, apps and data to a new device.
    • During setup, you can add an additional personal or corporate email account (e.g., IMAP)
    • Auto backup for Apps: seamless app data backup and restore.
    • Backup/restore of additional system settings such as your Sync settings, preferred apps, Do Not Disturb settings, Accessibility settings and enabled IMEs.
  • Media
    • MIDI support: create, consume, and perform music using your Android device with USB MIDI devices, MIDI over BLE, and software-based MIDI devices.
  • Internationalization
    • Android is now available in 74+ languages with 6 new additions: Azerbaijani, Gujarati, Kazakh, Albanian, Urdu, and Uzbek.
  • Android for Work
    • When receiving calls or viewing past messages, you can now see the full work contact details even if you’re not logged into your work profile.
    • Work status notification: A status bar briefcase icon now appears when you’re using an app from the work profile and if the device is unlocked directly to an app in the work profile, an alert is displayed notifying the user.
    • VPN apps are now visible in Settings > More > VPN. Additionally, the notifications that VPNs use are now specific to whether that VPN is configured for a work profile or the entire device.

Sept 29, 2015: A developer’s overview of Android 6.0 Marshmallow by Android Developers 

Sept 29, 2015: Android 6.0 Marshmallow based lead devices information from S’more to love across all your screens from the Official Google Blog

New Nexus phones
We made Android to be an open platform that anyone can build on, and today there are 4,000+ Android devices in all shapes and sizes. Android’s diversity is why it’s become the most popular mobile platform in the world, and the latest version, Marshmallow, takes Android to a new level of performance.

While we love all the Android devices out there, every year we build Nexus devices to show off the latest and greatest, directly from the people who built Android. Today we’re introducing the latest Nexus treats, both running Marshmallow, sweetened by amazing apps and sandwiched by some cutting-edge hardware (see what we did there?):

  • Nexus 6P is the first all-metal-body Nexus phone. Built in collaboration with Huawei, this 5.7” phone is crafted from aeronautical-grade aluminum, with a USB Type-C port for fast charging, a powerful 64-bit processor, and a 12.3 MP camera sensor with massive 1.55µm pixels (hello, better photos!). The Nexus 6P starts at $499.
  • You’re not the only one who misses your Nexus 5. We’ve joined forces with LG to bring it back with the new Nexus 5X, which gives you great performance in a compact and light package, with a beautiful 5.2” screen and the same 12.3 MP camera and Type-C port as the Nexus 6P. Nexus 5X starts at $379.

Both phones include a new fingerprint sensor, Nexus Imprint, which gives you quick and secure access to your phone, as well as use of Android Pay (in the U.S.). They are available for pre-order on the Google Store from a number of countries, including the U.S., U.K., Ireland and Japan, and come with a free 90-day subscription to Google Play Music. In the U.S., pre-orders include a $50 Play credit to help you stock up your favorite music, apps, games and shows. And, finally, for you Project Fi fans out there, you’ll be happy to know Nexus 6P and Nexus 5X will work on your favorite network. Request an invite to our Early Access Program at fi.google.comAN_BH_Groupshot_JH-150908+_Alt_Crop[1]

Oct 5, 2015Official Android 6.0 Marshmallow Review by Tim Schofield 

Oct 15, 2015: Answer to the question “Will Xiaomi finally step to the conventional way of upgrading to Android?” put to Hugo Barra in Hangout with Mi – Episode 2 from Xiaomi India 


The official release of Android M has just happened. That means that people like us only now have been given what they need to be able to start the porting process. Of course Google has been working with M for the new Nexus devices for a while. That’s exactly the reason why Nexus exists. So we’ve just started the porting work, and it takes some time to make sure that it all super well optimised.

By the way I should mention, if you look a little bit about the process for doing an upgrade. It’s not like just get some code from Google, like start moving into our code base. Actually it’s at least a two-step process. In fact I would argue that it’s a three-step process.

The first thing to happen is: Whoever makes the chipset, the SoC that powers that particular phone. Maybe let’s talk about Mi4i. Mi4i is on Qualcomm MSM8939, Snapdragon 615 v2 [rather Snapdragon 616 MSM8939v2, see Snapdragon 616 on Qualcomm site], it means it’s powered by Qualcomm. So Google Android team provides the build to Qualcomm. Qualcomm—beginning of now, just like happened—then will take a few months to do the work of making sure that the kernel level stuff is optimised, and correctly able to support then the layers above, the BSP [?Board Support Package?] framework, the so one and so forth.

Then Qualcomm takes that codebase, let’s assume it will be ready in January—to give you a hypothetical date here—and then provide that to the different smartphone brands like Xiaomi for example. Then our BSP team, which stands for basement processor—it’s the low level part of the operating system that includes everything under the framework—they will take that codebase from Qualcomm and then putting the extra work [needed to ensure] that it’s very optimised for battery consumption, for performance, so on and so forth, for Mi4i. They have to do the same work for every other device.

Then the System UI team—concerning that most OEMs have done some amount of System UI work—has to do a little bit of work of optimisation obviously to make sure that all the features are there.

At least these 3 steps that have to be taken by not only Xiomi, but every OEM to be able to bring devices to a new version of the operating system. Make sure that it’s optimised. It’ll be unacceptable for us to launch Android M on Mi4i in a way that doesn’t perform at least as well, if not obviously, ideally better, then it performed on [Android 5.0] Lollipop. So it’s like quite a long process.

With DragonBoard™ 410c Qualcomm is pioneering the high performance, 64-bit capable, low cost ARM based platform market for communities of embedded developers, educators, makers et al.

This is Qualcomm’s first initiative to target the communities. Since the company’s Snapdragon 410 SoC had already been designed into no less than 291 smartphones available on the market community members are assured of getting their costs incredibly low. In addition to that Cortex-A53 is used alone in higher and higher-end devices as the result of increased competition between MediaTek and Qualcomm, which will assure the communities a continuous supply of leading edge SoCs in the future. Read that companion post of mine in which you could also find the basic facts about the advantages of the Cortex-A53 cores vs. the earlier designs from ARM.

Charbax from Maker Fair Shenzhen 2015 (June 19-21, 2015)

Qualcomm DragonBoard 410c is a credit card sized http://96Boards.org compliant development board based on a Qualcomm Snapdragon 410 processor, with I/O like USB device, 1080P HDMI, micro USB port, support WiFi, Bluetooth, GPS, support Android, linux, planned to support windows 10 in the near future. The DragonBoard 410c is designed to support rapid software development, education and prototyping, including the next generation of robotics, cameras, medical devices, vending machines, smart buildings, digital signage, casino gaming consoles, and much more. At Maker Fair Shenzhen, Qualcomm is showing off how easy it is to get going with development using their new DragonBoard 410c, being released now

June 18, 2015: Welcome to the DragonBoard™ 410c

Available now! The DragonBoard™ 410c by Arrow Electronics is the first development board based on a mid-tier Qualcomm® Snapdragon™ 400 series processor. The board is designed to build a software ecosystem around the Snapdragon 410 processor, as well as offering uses in education, prototyping, and commercial embedded computing products. Featuring the 64-bit capable Snapdragon 410 quad-core ARM® Cortex® A53 processor, the DragonBoard 410c supports Android 5.1Linux based on Ubuntu and there are plans to offer support for Windows 10. It offers advanced processing power, integrated WiFi, Bluetooth, and GPS, all packed into a board the size of a credit card. The board supports feature-rich functionality, including multimedia, with the Adreno™ 306 GPU for PC-class graphics, integrated ISP with up to 13 MP camera support, and 1080p HD video playback and capture with H.264 (AVC).

The DragonBoard 410c is an ideal foundation for prototyping and includes 1GB 533MHz LPDDR3 memory, 8GB eMMC 4.5 storage and a micro SD card slot, as well as one 40-pin low speed and one 60-pin high speed expansion connector, and the footprint for an optional analog expansion connector for stereo headset/line-out, speakers and analog line-in. The board can be made compatible with Arduino using an add-on mezzanine board.

The DragonBoard 410c has the rich feature set and mid-tier accessibility to enable wide-ranging embedded and Internet of Everything (IoE) applications, including the next generation of robotics, cameras, medical devices, vending machines, smart buildings, digital signage, casino gaming consoles, and much more.

March 18, 2015: Qualcomm Announces Support of Windows 10 for the DragonBoard 410c Development Platform and Mobile Device Reference Designs

Support brings OEMs and developers high-performance Snapdragon enabled platform to help accelerate development for Windows 10 mobile and Windows 10 IoT devices

Qualcomm Technologies, Inc. (QTI), a subsidiary of Qualcomm Incorporated (NASDAQ: QCOM), today announced its support for Microsoft Windows 10 for IoT devices and Internet of Everything (IoE) applications with the DragonBoard 410c development board. Based on the Qualcomm® Snapdragon 410 processor by QTI, the DragonBoard 410c platform has superior functionality and computing capabilities, as well as Wi-Fi, Bluetooth and GPS, and is one of the world’s first high performance, low cost ARM®-based platforms for Windows 10.  It is a credit card-sized development kit designed to support rapid software development and prototyping for commercializing new inventions and products, such as the next generation of robotics, cameras, set-top-boxes, wearables, medical devices, vending machines, building automation, industrial control, digital signage, and casino gaming consoles.

“Qualcomm Technologies continues to offer the mobile device and development community the foundation and resources they need to build their portfolio of Windows devices across smartphones, tablets and IoE applications,” said Jason Bremner, senior vice president of product management for Qualcomm Technologies. “We are thrilled to demo DragonBoard 410c running Windows 10 IoT at WinHEC. DragonBoard 410c is an ARMv8-based development platform which is designed to support a wide array of embedded computing and IoE devices, drivers and application development.”

Microsoft is committed to advancing the Internet of Things with Windows 10 and Azure Cloud Services. Our collaboration with Qualcomm Technologies to provide Windows 10 for the DragonBoard 410c is an important milestone in realizing a new device-as-a-service proposition for device builders,” said Kevin Dallas, general manager, IoT Team, Operating Systems Group, Microsoft. “Combining Windows 10 with the performance of Qualcomm Snapdragon 410 processors will help the ecosystem realize robust, feature-rich use cases and enable developers to quickly commercialize their hardware products.”

The first live demos on the DragonBoard 410c will occur at WinHEC on March 18-19, 2015, in Shenzhen. The event will also feature technical sessions on Qualcomm Reference Designs (QRD) by QTI, as well as a QRD-based Windows Phone device display. For more information on WinHEC, please visit www.winhec.com. Additional information about QRD can be found at https://qrd.qualcomm.com/, or on the DragonBoard 410c at http://developer.qualcomm.com/dragonboard410cThe DragonBoard 410c is anticipated to be made commercially available by third party distributors this summer.

In addition to the introduction of Windows 10 support for the DragonBoard 410c, QTI’s long-standing collaboration with Microsoft has resulted in 25 OEMs developing over 30 new Windows Phones based on various Qualcomm Reference Designs to date. The Qualcomm Snapdragon 210 processor-based reference design will be the first reference design from Qualcomm Technologies to support the new Windows 10 operating system, with both phone and tablet reference designs to help manufacturers quickly introduce feature-rich Windows mobile devices.

About the Qualcomm Reference Design Program

To date, the Qualcomm Reference Design program by QTI has helped OEMs and ODMs around the world to accelerate their product development time and reduce related costs.  More than 1,080 commercial QRD-based devices have been shipped or are in the pipeline across 21 countries. Additionally, there are more than 270 commercial QRD-based LTE devices with more than 180 designs in the pipeline, helping provide consumers with more connected devices around the world.

March 19, 2015: DragonBoard 410c for Embedded Computing and IoE bí Leon Farasati, senior product manager at Qualcomm CDMA Technologies (QCT) responsible for Snapdragon Mobile Development Platforms

What will you build with this dragon?

As mobile devices powered by Qualcomm® Snapdragon™ processors have grown in functionality and number, the processor has become attractive to manufacturers of adjacent products like robots, kiosks, display signage and arcade machines.

Most of the interest has come from companies in embedded computing, where applications are more often industrial than consumer-facing and require parts designed for longevity, so they have often lacked features we take for granted in mobile, like a small footprint and low power consumption.

It turns out that Snapdragon processors have been quite a nice surprise for them.

Why Snapdragon processors for embedded computing?

As the Internet of Everything (IoE) takes off, manufacturers of embedded products are looking at everything they can do with Snapdragon processors, including HD video, Wi-Fi, multimedia, computer vision and cameras. They like what they see, and they really like that they can build those functions into embedded products with greater energy efficiency, no fans, no noise and a low thermal profile.

We’ve been working with them for the last few years with tools, kits and platforms that the hardware ecosystem has rolled out based on Snapdragon 800 and 600 series processors. Now we’re gearing up to support Snapdragon processors for a broader group of developers, makers and manufacturers with a new low-cost development board design based on the 64-bit capable Qualcomm® Snapdragon™ 410 processor which has been designed for longevity.

DragonBoard™ 410c

The “c” is for “community”, and that’s exactly what this board is intended to support. The DragonBoard 410c is one of the world’s first high performance, 64-bit capable, low cost ARM based platforms. It has integrated Wi-Fi, Bluetooth® and GPS, all in a board the size of a credit card. It’s designed to be compatible with the 96Boards Consumer Edition, which supports the hardware community to develop a range of compatible add-on products, shields and accessories. 96Boards is the open platform specification for high-performance development boards supported by Linaro.

DragonBoard based on Snapdragon 410

The DragonBoard 410c has support for Android, Linux and Windows 10, providing incredible options for software solutions. And as you would expect with any Snapdragon processor, it’s well equipped to support rich multimedia applications with an Adreno™ 306 GPU, 1080p HD video playback and capture with H.264 (AVC) and integrated ISP with support for 13 MP camera.

It also comes equipped with high- and low-speed expansion connectors, analog expansion connector for headset, speakers and FM, plus I/O interfaces for HDMI, USB 2.0 and micro SD card slot. All said, we believe this will make a great platform for rapid prototyping and commercializing a broad range of new inventions. The path to commercial devices is supported by an established ecosystem of embedded solutions providers who provide off-the-shelf or custom system-on-modules, support and design services for commercial deployments.

Last week we announced DragonBoard 410c. This week we are showing the first live demos of it at Microsoft-hosted WinHEC, and this summer DragonBoard 410c is anticipated to be commercially available through third party distributors.

Next Steps

With DragonBoard 410c we’re working to make made-for-mobile Snapdragon features a lot more accessible to help fuel innovation of embedded products. Adjacent products can benefit from AllJoyn™, Adreno GPU, Fast CV™, Vuforia™, audio and video features that seemed far beyond embedded computing just a couple of processor-generations ago. We can’t wait to see what you’ll invent.

Satya Nadella on “Digital Work and Life Experiences” supported by “Cloud OS” and “Device OS and Hardware” platforms–all from Microsoft

Update: Gates Says He’s Very Happy With Microsoft’s Nadella [Bloomberg TV, Oct 2, 2014] + Bill Gates is trying to make Microsoft Office ‘dramatically better’ [The Verge, Oct 3, 2014]

This is the essence of Microsoft Fiscal Year 2014 Fourth Quarter Earnings Conference Call(see also the Press Release and Download Files) for me, as the new, extremely encouraging, overall setup of Microsoft in strategic terms (the below table is mine based on what Satya Nadella told on the conference call):

image

These are extremely encouraging strategic advancements vis–à–vis previously publicized ones here in the following, Microsoft related posts of mine:

I see, however, particularly challenging the continuation of the Lumia story with the above strategy, as with the previous, combined Ballmer/Elop(Nokia) strategy the results were extremely weak:

image

Worthwhile to include here the videos Bloomberg was publishing simultaneously with Microsoft Fourth Quarter Earnings Conference Call:

Inside Microsoft’s Secret Surface Labs [Bloomberg News, July 22, 2014]

July 22 (Bloomberg) — When Microsoft CEO Satya Nadella defined the future of his company in a memo to his 127,100 employees, he singled out the struggling Surface tablet as key to a future built around the cloud and productivity. Microsoft assembled an elite team of designers, engineers, and programmers to spend years holed up in Redmond, Washington to come up with a tablet to take on Apple, Samsung, and Amazon. Bloomberg’s Cory Johnson got an inside look at the Surface labs.

Will Microsoft Kinect Be a Medical Game-Changer? [Bloomberg News, July 22, 2014]

July 23 (Bloomberg) — Microsoft’s motion detecting camera was thought to be a game changer for the video gaming world when it was launched in 2010. While appetite for it has since decreased, Microsoft sees the technology as vital in its broader offering as it explores other sectors like 3d mapping and live surgery. (Source: Bloomberg

Why Microsoft Puts GPS In Meat For Alligators [Bloomberg News, July 22, 2014]

July 23 (Bloomberg) — At the Microsoft Research Lab in Cambridge, scientists track animals and map climate change all on the off chance they’ll stumble across the next big thing. (Source: Bloomberg)

To this it is important to add: How Pier 1 is using the Microsoft Cloud to build a better relationship with their customers [Microsoft Server and Cloud YouTube channel, July 21, 2014]

In this video, Pier 1 Imports discuss how they are using Microsoft Cloud technologies such as Azure Machine Learning to to predict which the product the customer might want to purchase next, helping to build a better relationship with their customers. Learn more: http://www.azure.com/ml

as well as:
Microsoft Surface Pro 3 vs. MacBook Air 13″ 2014 [CNET YouTube channel, July 21, 2014]

http://cnet.co/1nOygqh Microsoft made a direct comparison between the Surface Pro 3 and the MacBook Air 13″, so we’re throwing them into the Prizefight Ring to settle the score once and for all. Let’s get it on!

Surface Pro 3 vs. MacBook Air (2014) [CTNtechnologynews YouTube channel, July 1, 2014]

The Surface Pro 3 may not be the perfect laptop. But Apple’s MacBook Air is pretty boring. Let’s see which is the better device!

In addition here are some explanatory quotes (for the new overall setup of Microsoft) worth to include here from the Q&A part of Microsoft’s (MSFT) CEO Satya Nadella on Q4 2014 Results – Earnings Call Transcript [Seeking Alpha, Jul. 22, 2014 10:59 PM ET]

Mark Moerdler – Sanford Bernstein

Thank you. And Amy one quick question, we saw a significant acceleration this quarter in cloud revenue, or I guess Amy or Satya. You saw acceleration in cloud revenue year-over-year what’s – is this Office for the iPad, is this Azure, what’s driving the acceleration and how long do you think we can keep this going?

Amy Hood

Mark, I will take it and if Satya wants to add, obviously, he should do that. In general, I wouldn’t point to one product area. It was across Office 365, Azure and even CRM online. I think some of the important dynamics that you could point to particularly in Office 365; I really think over the course of the year, we saw an acceleration in moving the product down the market into increasing what we would call the mid-market and even small business at a pace. That’s a particular place I would tie back to some of the things Satya mentioned in the answer to your first question.

Improvements to analytics, improvements to understanding the use scenarios, improving the product in real-time, understanding trial ease of use, ease of sign-up all of these things actually can afford us the ability to go to different categories, go to different geos into different segments. And in addition, I think what you will see more as we initially moved many of our customers to Office 365, it came on one workload. And I think what we’ve increasingly seen is our ability to add more workloads and sell the entirety of the suite through that process. I also mentioned in Azure, our increased ability to sell some of these higher value services. So while, I can speak broadly but all of them, I think I would generally think about the strength of being both completion of our product suite ability to enter new segments and ability to sell new workloads.

Satya Nadella

The only thing I would add is it’s the combination of our SaaS like Dynamics in Office 365, a public cloud offering in Azure. But also our private and hybrid cloud infrastructure which also benefits, because they run on our servers, cloud runs on our servers. So it’s that combination which makes us both unique and reinforcing. And the best example is what we are doing with Azure active directory, the fact that somebody gets on-boarded to Office 365 means that tenant information is in Azure AD that fact that the tenant information is in Azure AD is what makes EMS or our Enterprise Mobility Suite more attractive to a customer manager iOS, Android or Windows devices. That network effect is really now helping us a lot across all of our cloud efforts.

Keith Weiss – Morgan Stanley

Excellent, thank you for the question and a very nice quarter. First, I think to talk a little bit about the growth strategy of Nokia, you guys look to cut expenses pretty aggressively there, but this is – particularly smartphones is a very competitive marketplace, can you tell us a little bit about sort of the strategy to how you actually start to gain share with Lumia on a going forward basis? And may be give us an idea of what levels of share or what levels of kind unit volumes are you going to need to hit to get to that breakeven in FY16?

Satya Nadella

Let me start and Amy you can even add. So overall, we are very focused on I would say thinking about mobility share across the entire Windows family. I already talked about in my remarks about how mobility for us even goes beyond devices, but for this specific question I would even say that, we want to think about mobility not just one form factor of a mobile device because I think that’s where the ultimate price is.

But that said, we are even year-over-year basis seen increased volume for Lumia, it’s coming at the low end in the entry smartphone market and we are pleased with it. It’s come in many markets we now have over 10% that’s the first market I would sort of say that we need to track country-by-country. And the key places where we are going to differentiate is looking at productivity scenarios or the digital work and life scenario that we can light up on our phone in unique ways.

When I can take my Office Lens App use the camera on the phone take a picture of anything and have it automatically OCR recognized and into OneNote in searchable fashion that’s the unique scenario. What we have done with Surface and PPI shows us the way that there is a lot more we can do with phones by broadly thinking about productivity. So this is not about just a Word or Excel on your phone, it is about thinking about Cortana and Office Lens and those kinds of scenarios in compelling ways. And that’s what at the end of the day is going to drive our differentiation and higher end Lumia phones.

Amy Hood

And Keith to answer your specific question, regarding FY16, I think we’ve made the difficult choices to get the cost base to a place where we can deliver, on the exact scenario Satya as outlined, and we do assume that we continue to grow our units through the year and into 2016 in order to get to breakeven.

Rick Sherlund – Nomura

Thanks. I’m wondering if you could talk about the Office for a moment. I’m curious whether you think we’ve seen the worst for Office here with the consumer fall off. In Office 365 growth in margins expanding their – just sort of if you can look through the dynamics and give us a sense, do you think you are actually turned the corner there and we may be seeing the worse in terms of Office growth and margins?

Satya Nadella

Rick, let me just start qualitatively in terms of how I view Office, the category and how it relates to productivity broadly and then I’ll have Amy even specifically talk about margins and what we are seeing in terms of I’m assuming Office renewals is that probably the question. First of all, I believe the category that Office is in, which is productivity broadly for people, the group as well as organization is something that we are investing significantly and seeing significant growth in.

On one end you have new things that we are doing like Cortana. This is for individuals on new form factors like the phones where it’s not about anything that application, but an intelligent agent that knows everything about my calendar, everything about my life and tries to help me with my everyday task.

On the other end, it’s something like Delve which is a completely new tool that’s taking some – what is enterprise search and making it more like the Facebook news feed where it has a graph of all my artifacts, all my people, all my group and uses that graph to give me relevant information and discover. Same thing with Power Q&A and Power BI, it’s a part of Office 365. So we have a pretty expansive view of how we look at Office and what it can do. So that’s the growth strategy and now specifically on Office renewals.

Amy Hood

And I would say in general, let me make two comments. In terms of Office on the consumer side between what we sold on prem as well as the Home and Personal we feel quite good with attach continuing to grow and increasing the value prop. So I think that’s to address the consumer portion.

On the commercial portion, we actually saw Office grow as you said this quarter; I think the broader definition that Satya spoke to the Office value prop and we continued to see Office renewed in our enterprise agreement. So in general, I think I feel like we’re in a growth phase for that franchise.

Walter Pritchard – Citigroup

Hi, thanks. Satya, I wanted to ask you about two statements that you made, one around responsibly making the market for Windows Phone, just kind of following on Keith’s question here. And that’s a – it’s a really competitive market it feels like ultimately you need to be a very, very meaningful share player in that market to have value for developer to leverage the universal apps that you’re talking about in terms of presentations you’ve given and build in and so forth.

And I’m trying to understand how you can do both of those things once and in terms of responsibly making the market for Windows Phone, it feels difficult given your nearest competitors there are doing things that you might argue or irresponsible in terms of making their market given that they monetize it in different ways?

Satya Nadella

Yes. One of beauties of universal Windows app is, it aggregates for the first time for us all of our Windows volume. The fact that even what is an app that runs with a mouse and keyboard on the desktop can be in the store and you can have the same app run in the touch-first on a mobile-first way gives developers the entire volume of Windows which is 300 plus million units as opposed to just our 4% share of mobile in the U.S. or 10% in some country.

So that’s really the reason why we are actively making sure that universal Windows apps is available and developers are taking advantage of it, we have great tooling. Because that’s the way we are going to be able to create the broadest opportunity to your very point about developers getting an ROI for building to Windows. For that’s how I think we will do it in a responsible way.

Heather Bellini – Goldman Sachs

Great. Thank you so much for your time. I wanted to ask a question about – Satya your comments about combining the next version of Windows and to one for all devices and just wondering if you look out, I mean you’ve got kind of different SKU segmentations right now, you’ve got enterprise, you’ve got consumer less than 9 inches for free, the offering that you mentioned earlier that you recently announced. How do we think about when you come out with this one version for all devices, how do you see this changing kind of the go-to-market and also kind of a traditional SKU segmentation and pricing that we’ve seen in the past?

Satya Nadella

Yes. My statement Heather was more to do with just even the engineering approach. The reality is that we actually did not have one Windows; we had multiple Windows operating systems inside of Microsoft. We had one for phone, one for tablets and PCs, one for Xbox, one for even embedded. So we had many, many of these efforts. So now we have one team with the layered architecture that enables us to in fact one for developers bring that collective opportunity with one store, one commerce system, one discoverability mechanism. It also allows us to scale the UI across all screen sizes; it allows us to create this notion of universal Windows apps and being coherent there.

So that’s what more I was referencing and our SKU strategy will remain by segment, we will have multiple SKUs for enterprises, we will have for OEM, we will have for end-users. And so we will – be disclosing and talking about our SKUs as we get further along, but this my statement was more to do with how we are bringing teams together to approach Windows as one ecosystem very differently than we ourselves have done in the past.

Ed Maguire – CLSA

Hi, good afternoon. Satya you made some comments about harmonizing some of the different products across consumer and enterprise and I was curious what your approach is to viewing your different hardware offerings both in phone and with Surface, how you’re go-to-market may change around that and also since you decided to make the operating system for sub 9-inch devices free, how you see the value proposition and your ability to monetize that user base evolving over time?

Satya Nadella

Yes. The statement I made about bringing together our productivity applications across work and life is to really reflect the notion of dual use because when I think about productivity it doesn’t separate out what I use as a tool for communication with my family and what I use to collaborate at work. So that’s why having this one team that thinks about outlook.com as well as Exchange helps us think about those dual use. Same thing with files and OneDrive and OneDrive for business because we want to have the software have the smart about separating out the state carrying about IT control and data protection while me as an end user get to have the experiences that I want. That’s how we are thinking about harmonizing those digital life and work experiences.

On the hardware side, we would continue to build hardware that fits with these experiences if I understand your question right, which is how will be differentiate our first party hardware, we will build first party hardware that’s creating category, a good example is what we have done with Surface Pro 3. And in other places where we have really changed the Windows business model to encourage a plethora of OEMs to build great hardware and we are seeing that in fact in this holiday season, I think you will see a lot of value notebooks, you will see clamshells. So we will have the full price range of our hardware offering enabled by this new windows business model.

And I think the last part was how will we monetize? Of course, we will again have a combination, we will have our OEM monetization and some of these new business models are about monetizing on the backend with Bing integration as well as our services attached and that’s the reason fundamentally why we have these zero-priced Windows SKUs today.

Intel CTE initiative: Bay Trail-Entry V0 (Z3735E and Z3735D) SoCs are shipping next week in $129 Onda (昂达) V819i Android tablets—Bay Trail-Entry V2.1 (Z3735G and Z3735F) SoCs might ship in $60+ Windows 8.1 tablets from Emdoor Digital (亿道) in the 3d quarter

Update: At 19:40 on April 14 from the 昂达微博 Onda microblogging
[Detailed background information on Onda you can can can find on the ONDA page of my other, ‘USD 99 Allwinner’ blog. Note as well the neostra ODM/OEM brand which is owned by Onda as it’s manufacturing base.]

# Onda Tablet PC & Intel 64 # [notice] April 21, Onda first Intel 64 Bay Trail-T quad-core tablet quad-core # # Onda V975i , 1099 yuan [$177] / 32GB! 50 can be stored in advance and are now starting to use arrived 100 yuan purchase! 9.7 inches iPad Air retina screen, 64 1.83GHz quad-core CPU, the strongest 64-bit tablet bunker! Starting snapped → Onda V975i “special” double 50 yuan deposit payment in exchange for 100 yuan photographed determine coupon   @ Intel China   @ Intel Core Collection of

image

Details about the Onda V975i shipping from April 21st see after the Onda V819i (shipping from April 14th) details given much below! End of update

Existing local tablet brands working with Intel were BYD, Ramos and Teclast so far. With CTE (China Technical Ecosystem) initiative now they have 14 partners, not only local brands but local IDHs (Independent Design Houses) and OEMs/ODMs as well, as will be presented very soon below (other subjects following that correspond to the other terms that you find in title of the post):

From 英特尔的中国白牌平板之路 (Chinese white-box tablet roadmap by Intel) [中国经济网深圳频道 (China Economic Net Shenzhen Channel), April 3, 2014]


Intel and low-cost Android [and Windows] tablet reference design roadmap (Source Intel)

image

  1. Clover Trail+, Dual Core, Android: Z2580 2GHz, Z2520 1.2GHz, LPDDR2, 8L1 HDI2 
    (Note that Intel was pressed to use the Clover Trail+ for tablets instead of smartphones as it was originally envisaged. See in Saving Intel: next-gen Intel ultrabooks for enterprise and professional markets from $500; next-gen Intel notebooks, other value devices and tablets for entry level computing and consumer markets from $300 [‘Experiencing the Cloud’, April 17, 2013].)
  2. BayTrail-T, Quad Core, Windows: Z3745D 1.83 GHz, 19×12 LCD, DDR3L, 8L1 HDI2
    (3d party AM? Dual Boot solution available)
  3. BayTrail-Entry V0, Quad Core, Android:
    Z3735D (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735E (1.83GHz, 1GB, <=12×8)
    DDR3L, 8L1 HDI2
  4. BayTrail-Entry V2.1, Quad Core, Android:
    Z3735F (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735G (1.83GHz, 1GB, <=12×8)
    DDR3L, 6L1 type 3 PCB
  5. BayTrail-Entry V2.1, Quad Core, Windows
    [note that the Windows-based SoC version started sampling in beginning of April vs. the Android based one in mid February]:
    Z3735F (1.83GHz, <=2GB, <=19×12 LCD),
    Z3735G (1.83GHz, 1GB, <=12×8)
    DDR3L, 6L1 type 3 PCB
1 8L PCB = 8-layer PCB; 6L PCB = 6-layer PCB
2 HDIHigh Density Interconnects (aka Type 4) PCBs are defined as PCBs utilizing blind, buried or microvia technologies. A blind via is drilled from the surface layer with an end target on an internal layer while a buried via is only drilled on internal layers and does not exist on the surface layers. A microvia is commonly referred to as a via with a hole diameter of 0.005’ or less. (Source: PCB Stack-up Overview for Intel® Architecture Platforms Layout and Signal Integrity Considerations, Intel Thainland, December 2008)

image

In 2013 Intel launched the CTE program, where “the CTE acronym stands for China Technique Technical Ecosystem, which can be understood as Chinese technology ecosystem environment and Chinese white-box industry chain”, an alliance of fourteen local tablet manufacturers in Shenzhen including 比亚迪-BYD (Build Your Dreams), 实义德-THD (Thread Technology Co. Ltd.), 创智成-CZC, 汉普-Hampoo, 亿道-Emdoor [Digital] (Emdoor Digital Technology Co. Ltd.), 德天-Techvision (德天信息技术有限公司-Techvision Information Technology Co., Ltd.), 蓝魔Ramos, 台电Teclast (Teclast Electronics Co, Ltd), 广和通Fibocom (Fibocom Wireless Inc.), 微步Wibtek3 (Weibu) (Weibu Electronics Co., Ltd), 天智伟业Wisky (Shenzhen Wisky Technology Co Ltd), 炜疆Range (炜疆信息技术有限公司-Range Information Technology Co., Ltd.), and so on.

3 Wibtek (Weibu) is a Top 1 design house, dedicated in DIY solution products over 13 years with 10 million units MB shipment per year.
– Founded: 2001
– Group Employees: over 1000
– HQ: Shenzhen China
– R&D Force: 500+ engineers
Because of a global brand need, Wibtek is established by TAIWANESE people who were working for A BRAND in the past. Wibtek is currently producing All In One, Mini PC and Motherboards at this moment. As because our profession is motherboard design we easily can claim that Wibtek: “AIO by ITX professionals”.

The below table (taken from Z3600 and Z3700 Series Datasheet as of April 2014 when Type 3 SoC related information was added) is giving the rest of the specific information:

imageIn Brian M. Krzanich IDF14 Shenzhen keynote
[April 2, 2014]

  • Demonstrates Intel SoFIA for the first time just months after adding the new family of integrated Intel® Atom™-based mobile SoCs for entry and value smartphones and tablets to its roadmap.

From Intel CEO Outlines New Computing Opportunities, Investments and Collaborations with Burgeoning China Technology Ecosystem [press release, April 2, 2014]

As 4G LTE service expands in China, Intel is well-positioned to provide a growing share of LTE chipsets. Intel’s 2014 LTE platform, the Intel® XMM™ 7260, meets the five-mode requirement of China Mobile* today, including support for TD-LTE, and TD-SCDMA protocols required in China.

Intel is actively engaged in China for certification of the Intel XMM 7260, paving the way for commercial availability in the second half of 2014 for performance and mainstream device market segments. Krzanich demonstrated the Intel XMM 7260 by conducting the first public, live call using China Mobile’s TD-LTE network, and spoke to strong ecosystem demand for a competitive LTE alternative.

Intel is also developing its SoFIA family of integrated mobile SoCs for entry and value smartphones and tablets. Krzanich demonstrated the family’s first silicon, booting up the new integrated Intel® Atom™ platform just months after adding the product to its ultra-mobile roadmap. He also noted the strategic opportunity these market segments present for Intel and the China technology ecosystems. Intel’s SoFIA 3G platform is on track to ship to OEMs in the fourth-quarter of 2014.

Krzanich also said that Intel is on track to ship 40 million tablets this year, and showcased a variety of innovative designs developed in China by OEMs and ODMs.

From Mobile Innovation With Intel Inside by Hermann Eul [IDF14 Shenzhen, April 3, 2014]image

The general tablet roadmap was presemted as follows:

image

Intel reportedly places 28nm chip orders with TSMC, Globalfoundries and UMC [DIGITIMES, Jan 9, 2014]

Intel has contracted Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its forthcoming Atom mobile processor series codenamed SoFIA, and also placed orders for entry-level baseband chips with Globalfoundries and United Microelectronics (UMC), according to industry sources.

The contract chipmakers declined to comment on customer orders.

Intel’s SoFIA SoCs designed for entry-level smartphones and tablets will be built using TSMC’s 28nm HKMG process technology, said the sources. As for the other series of Atom SoCs codenamed Broxton, Intel will use its 14nm FinFET process to make the chips targeting high-end mobile devices.

Intel has also placed orders for entry-level baseband chips with Globalfoundries and UMC, using their respective 28nm PolySiON process nodes, the sources indicated. Initial shipments required by Intel are estimated at 7,000-8,000 wafers monthly.
Globalfoundries will first be the primary contract chipmaker for Intel’s 28nm baseband chips, the sources noted. Nevertheless, Intel is likely to release more orders to UMC later in 2014 when the Taiwan foundry improves its 28nm production yield rates, the sources said.

More information:
IDF14 Shenzhen: Intel is levelling the Wintel playing field with Android-ARM by introducing new competitive Windows tablet price points from $99 – $129 [‘Experiencing the Cloud’, April 4, 2014]
The long awaited Windows 8.1 breakthrough opportunity with the new Intel “Bay Trail-T”, “Bay Trail-M” and “Bay Trail-D” SoCs? [‘Experiencing the Cloud’, Sept 14, 2013]
Form Factor and Average Power Innovations for Ultrabooks™
[April 10, 2013 presentation by Intel at the IDF Beijing] with the following abstract:

Intended Audience: OEMs and ODMs – Motherboard Layout Designers, Power Delivery, and Power Management Architects
In this session we propose methods to improve, form factor, battery capacity, and power consumption for Ultrabook™ devices. We show how High Density Interconnects (HDI) Printed Circuit Boards could free up considerable space for more battery and other features, especially in thinner Ultrabooks. We show current practices with HDI and propose better ways to achieve higher mother board area reduction to close the cost gap between type 3 and type 4 (HDI) designs. For power consumption, we also show design methods to reduce average power, especially by reducing platform idle power.

and agenda:

    • What is HDI?
    • Benefits of HDI in Form Factor Constrained Systems
    • Reducing the Cost of HDI
    • Reducing Platform Power
    • Thermal management an Power Configurability

From Designing Entry and Value Tablets Based on the Intel Platform, Bay Trail – Entry [IDF14 TABS002 session, April 3, 2014] downloadable presentation (PDF)

This session includes an in-depth review of the status and plans for the Intel® platform, Bay Trail – Entry, Intel’s first platform focused entirely on Entry and Value Tablets.

Topics include:

  • Master Reference Design, component catalog and hardware and software differentiation
  • Development and manufacturing tools
  • Schedule and Original Device Manufacturers (ODMs) support model

image

1 MRD7 and MRD8/10 are Android* only. Windows is for selected ODMs with committed volume.

image

image

image

Imperatives for Master Reference Design (MRD) Development and Scaling

  • Master reference design for simultaneous scaling @ multiple ODMs with fast time to market
  • Tailor-made to enable flexible and fast changes with CTE friendly component catalogue
  • Enable differentiation to drive value beyond low cost
  • Manufacturing tools to ensure easy mass production process

image

image

image

image

Intel Platform, Bay Trail–Entry Component Catalogue Goal

  • Strengthen Intel Architecture partnership with CTE hardware ecosystem
  • Improve platform competitiveness, demonstrate performance and flexibility
  • Shorten time to market and enable product variety
  • Reduce project and supply chain risk
  • Enable partners to support customer design directly

image

image

image

Intel software ecosystem enabling efforts

< from slide #22 to slide #36>

Intel tools for development and manufacturing

< from slide #38 to slide #41>


image今天 17:59 Today [2014-0411] 17:59 
昂达微博 Onda microblogging
[Detailed background information on Onda you can can can find on the
ONDA page of my other, ‘USD 99 Allwinner’ blog. Note as well the neostra ODM/OEM brand which is owned by Onda as it’s manufacturing base.]

# 64 Onda first Android tablet # [first] New Intel Bay Trail-T’s first quad-core tablet # # Onda V819i quad-core will soon at @ Jingdong  
@ Jingdong computer digital sale! 16GB is only 799 yuan [$129]! 8.0-inch 1280 × 800 IPS screen ultra-clear, 64 of Bay Trail-T 22nm quad-core CPU, PC-class 7th generation GPU, 64-Bit Flat Panel “core” era! Starting snapped → http://t.cn/8sCvvnD    @ Intel China   
@ Intel Core Collection of

Onda V819i Intel Bay Trail-T 8 Inch IPS Screen Quad Core Android Tablet PC
[Onda Tablet – Buy Products, April 4, 2014]

SKU:820026
Regular Price: $189.90
Special Price: $159.90

Quick Overview

Onda V819i Intel Tablet pre-installed with Quad Core 64-bit 22nm Bay Trail-T 1.83GHz Processor [3735E Bay Trail-Entry V0], with 1280*800 IPS Screen, Dual Camera.

Qty: … Pre-order

Shipping within 1-2 Weeks

From Boris at 4/2/14 11:44 AM

  • Can I be notified when Onda V819i will be in stock?
    Thanks.
  • Onda Tablet:
    Thank you for your mail.
    Onda V819i Intel Tablet will be in stock at the end of April.

Details

Onda V819i Intel Tablet pre-installed with Quad Core 64-bit 22nm Bay Trail-T 1.83GHz Processor [3735E Bay Trail-Entry V0], with 1024*768 1280*800 IPS Screen, Dual Camera.

image

Onda V819i Quad Core features Intel Bay Trail-T Z3735 processor, 1.83GHz.

image

DDR3 L RAM, eMMC up to 150MB/s

image

image

8.0 Inch HD IPS Gorilla Glass Touch Screen

image

189PPI IPS Screen with 1280*800 resolution

image

Onda ROM

image

image

Onda V819i Intel Tablet Features:

OS: Android 4.2
CPU: Intel 3735E [Bay Trail-Entry V0] Quad Core 64-bit Bay Trail-T, 22nm, 1.86GHz, support Burst Technology 2.0
GPU: Intel HD Graphics for BayTrail
RAM   1GB 64bit DDR3L
Storage   16GB eMMC
Bluetooth: Support
Shell Material     Metal
Screen: Capacitive Touchscreen, 1280*800 High-resolution Screen
Size:   8 inch
Resolution:    1280*800 Pixels (16:10)
Display:  IPS Screen
Dual Camera:  2.0MP Front + 5.0MP Back with AutoFocus (OV Camera)

Onda V819i Intel Tablet Details:

Speakers: Dual AAC Speaker
TF Card: Support up to 128GB
Video: 4K HD Videp Play with formats of MP4/3GP/3G2/RM/RMVB/ASF/FLAC/APE/MOV etc.
Gravity Sensor     Yes
Skype     Yes
Multi-Touch     Yes, 10 points touch
OTG:   Yes
HDMI:  Yes, Mini HDMI
Play Store:  Yes, built in
Extend Card     Support TF card up to 128GB extended
Email and Browser: Yes, built in
WIFI:    Yes, 802.11 b/g/n
Earphone Interface     3.5mm
Video    1080P, AVI/MOV/MP4/RMVB/FLV/MKV…
Music     MP3/WMA/WAV/APE/AAC/FLAC/OGG
Ebook     UMD, TXT, PDF, HTML, RTF, FB2…
Battery :  Li-ion 4200mAH

Onda V819i Intel Tablet contain:

1 x Onda V819i Intel Tablet
1 x USB cable
1 x Charger

Onda V819i Intel Tablet Weight:  354g

Onda V819i Intel Tablet Size:  207*122.5*8.5mm

imageUpdate: At 19:40 on April 14 from the 昂达微博 Onda microblogging

# Onda Tablet PC & Intel 64 # [notice] April 21, Onda first Intel 64 Bay Trail-T quad-core tablet quad-core # # Onda V975i , 1099 yuan [$177] / 32GB! 50 can be stored in advance and are now starting to use arrived 100 yuan purchase! 9.7 inches iPad Air retina screen, 64 1.83GHz quad-core CPU, the strongest 64-bit tablet bunker! Starting snapped → Onda V975i “special” double 50 yuan deposit payment in exchange for 100 yuan photographed determine coupon @ Intel China @ Intel Core Collection of 

Onda V975i Quad Core Intel Bay Trail-T 9.7 Inch Retina Screen RAM 2GB Tablet PC [Onda Tablet – Buy Products, April 14, 2014]

SKU:820027
Regular Price: $219.90
Special Price: $209.90

Quick Overview

Onda V975i Quad Core pre-installed with Intel Bay Trail-T 61-bit Processor [3735D Bay Trail-Entry V0], with 22nm and 1.83GHz, 2GB RAM DDR3L and 32GB eMMC ROM,9.7 Inch Retina Screen 2048*1536 resolution 264 Screen PPI. Onda V975i come with Front 2.0M and Back 5.0M Dual Camera.

Qty: … Pre-order

Shipping within 1-2 Weeks

Details

Onda V975i Quad Core pre-installed with Intel Bay Trail-T 61-bit Processor [3735D Bay Trail-Entry V0], with 22nm and 1.83GHz, 2GB RAM DDR3L and 32GB eMMC ROM, 9.7 Inch Retina Screen 2048*1536 resolution 264 Screen PPI.Onda V975i come with Front 2.0M and Back 5.0M Dual Camera.

Intel Z3735 Quad Core 64 bit 1.83GHz

image

8.5mm Ultra-thin

9.7 Inch Retina Screen Android Tablet with 495g

image

HD OV Camera with Auto Focus

Front 2.0M and Back 5.0M HD Camera

image

Top 9.7 Inch Retina Screen

9.7 Inch iPad Air Retina Screen with 267 Screen PPi, Gorilla Glass Touch Screen

image

Onda V975i Quad Core Tablet Features:

OS: Android 4.2
CPU: 64-bit Bay Trail-T Z3735D [Bay Trail-Entry V0], 22nm,1.83GHz, support Burst Technology 2.0
GPU: Gen7,support DirectX 11
RAM   2GB DDR3L
Storage  32GB eMMC
Bluetooth: Support
Shell Material     Metal
Screen: Capacitive Touchscreen, 2048*1536 High-resolution Screen
Size:   9.7 inch
Resolution:    2048*1536 Pixels
Visible Angle: 178°
Screen PPI:  264
Display:  Retina IPS Screen
Daul Camera: Front 2.0 Megapixels, Back 5.0 Megapixels Auto Foucus

Onda V975i Quad Core Tablet Details:

Speakers: Dual AAC Speaker
Video: hd Video Play with formats of MP4/3GP/3G2/RM/RMVB/ASF/FLAC/APE/MOV etc.
Gravity Sensor     Yes
Skype     Yes
Multi-Touch     Yes, 10 points touch
OTG:   Yes
Play Store:  Yes, built in
Extend Card     Support TF card up to 32GB extended
Email and Browser: Yes, built in
WIFI:    Yes, 802.11 b/g/n
Earphone Interface     3.5mm
Video     1080P, AVI/MOV/MP4/RMVB/FLV/MKV…
Music     MP3/WMA/WAV/APE/AAC/FLAC/OGG
Ebook     UMD, TXT, PDF, HTML, RTF, FB2…
Battery :  7800 mAh

Onda V975i Quad Core Tablet contain:

1 x Onda V975i Quad Core Intel Tablet
1 x USB cable
1 x Charger

Onda V975i Quad Core Weight: 495g

Onda V975i Quad Core Size:  241*169*8.5mm

End of update


From 亿道将推低于399元的Windows平板 (Emdoor will be pushing Windows tablet down to 399 yuan [$60]) [平板新闻 (PadNews), April 8, 2014] one can see the following roadmap from the company for 2014:

image

Currently its three 8-inch Windows 8.1 based tablets: EM-I8080-A, EM-I8080-C, EM-I8180 are already in mass production. And now Microsoft Windows system with tablets of 9-inch and less size has started free, which makes its three 8-inch Windows tablets more competitive.

image

In addition Emdoor will launch in the second quarter of this year a 10.1-inch Windows Tablet program supporting 3G/4G network, and a 10.1 inch 3G/4G tablet based on BayTrail-T CR [Cost Reduced] V0 version. In the second quarter it will also launch an 8-inch BayTrail-T CR V0 quad-core 3G tablet, the whole[sale] price will be around $ 139. In the end of the second quarter it will launch an 8-inch BayTrail-T CR V2 3G quad-core tablet, when prices will be further reduced to between $ 99-119. More awesome is that in the third quarter Emdoor will launch a 7 -inch BayTrail-T CR V2 quad-core 3G tablet, and the price will be lower than $99. Obviously in the WiFi-only version of the above scenario the price will be lower.

The current 50K shipment of Emdoor isn’t much, but for the company it is simply a starting point. At the launch party Emdoor also announced this year’s goal: 1KK, namely the 2014 Intel tablet shipments program to reach 1 million units, becoming the market leading Intel tablet IDH. Obviously, this is not small, in order to achieve it is really difficult. How Emdoor will be achieving this?

Emdoor’s approach can be summarized in three points: 1, constantly updated product technology and creating more product forms; 2, the establishment of a sound quality system, providing customers with better product quality; 3,  for the continuous optimization of product cost it will introduce a $60 tablet this year. Here the US $60 tablet PC should be referring to that of Emdoor launching in the third quarter a 7-inch BayTrail-T CR V2 quad-core tablet, as the 3G version priced at only $99, then the price of the WiFi only version should be at around $ 60. Here we must add that BayTrail-T CR supports Windows System.

image

The $60 Tablet PC means that for less than 399 yuan you can buy a Windows tablet, the price really is a little scary. If it really can do at this price, then it will be able completely compete with an ARM-based Android tablet head-on. And an Android tablet does not have the advantage of full compatibility with PC programs. Plus the Intel and Microsoft brands, I believe, will attract a large number of consumers. And with this it will probably be possible to change the current ARM tablet market, a dominant pattern. But before the product is actually listed it’s hard to say, because the outcome will also depend on the specific market feedback.

Intel pre-CTE background in China:

As of 2013

From China tablet/smartphone chain: Leaders emerge but plenty to play for [Supply Chain Research by Credit Suisse, Oct 15, 2013]

image

… The China tablet market is also seeing Intel engage more on building reference designs with local players, with several solution houses and local brands rolling out Windows+Android 7-10” tablets for $150-250 factory price for tablets and $300-$350 for tablet + keyboard Win8 + Android models.  …

Intel engaging local tablet suppliers more closely. Intel is putting more energy on penetrating the low-cost tablet market and now has reference models from design houses such as Emdoor and smaller branded companies including Ramos and Vido. The company is offering a thin and light reference design based on Clover Trail now with Bay Trail rolling out in the next 3 months. Factory price for 10” with keyboard ranges from $250-300 for Android and $300-$350 for Android + Wintel. 7.85” tablets are from Intel are now appearing at US$150 factory price, the high-end of the US$50-135 range for tablets based on Mediatek or the Chinese chipset suppliers. We are seeing more effort from Intel to penetrate several of these design houses on tablets, though presence is still very limited at the local smartphone suppliers.

Emdoor Digital background:

As of 2013

Emdoor Digital participates China Sourcing Fair in Hong Kong with multi-platform solutions [press release, Oct 12, 2013]

Emdoor Digital participated China Sourcing Fair in Hong Kong on October 12-15, 2013 with multi-platform solutions. Emdoor Digital unveiled the latest Intel X86 architecture -based tablet solution, ARM Rockchips 3026 and 3168 -based architecture solution. There is also more mature amlogic tablet solution which is already in high-volume production, Marvell 3G call tablet solution, more tablet solutions targeted at different industries, Miracast, TV boxes, TV stick and other products.

image
《Scene photos I》

image
《Scene photos II》

        Intel Dual System Tablet solution is undoubtedly the major popular model during this exhibition, X86-based Intel Baytrail-T quad-core tablet solution, 1.8GHz, support windows8.1 & android4.2.2 dual system, 10.1 inch, 8 inch two models, this is the world’s first prototype based on Intel Baytrail-T, the mature sampling will be available in the end of October and Mass production in November.

image
《Intel tablet solution》[based on Z3740D]

        Intel leaders from different regions and countries visit and guide at Emdoor Digital Booth.

image
《 Intel Leaders’visit》

        ARM architecture-based RK3026 is the latest models target at lower-end market, RK3168 for higher-end market, both are undoubtedly the models lead the dual-core market.

image
《EM-R3170&EM-R6270》

        For the higher end market, Emdoor Digital has RK3188, M802, large size, thinner and lighter is the characteristics of these models.

image
《8”、9.7”、 10.1”》

        For Mass production and most stable performance, Emdoor Digital has full-size models of amlogic AML8726-MXS/MXL chip solution; all 7 inch, 8 inch, 9 inch, 10.1-inch types pass the GMS certification.

image
《 Amlogic series models》

        For 3G and calling market, Emdoor Digital has Marvell PXA986 dual-core, PXA1088 quad-core tablet solutions, Phablet, narrow flat border is a major highlight which is also the future market trends.

image
《3G Phablet》

        We can see some special tablets customized for different industries on Emdoor Digital booth, POS machines has intelligent cash system, supports NFC, mobile phone , bank card and magnetic card payments manner. And other industrial applications tablets of RFID, Zigbee / Z-wave, etc.

image
《Industry Solution》

        There are also TV box, TV dongle , Miracast, etc.

image
《 Other products》

        During this Hong Kong exhibition, Emdoor Digital presents multi-platform solutions with numerous product forms, which is undoubtedly one of the booths with rich content, different products for different markets, which is attraction for all buyers on site.

About Emdoor Digital:

  • Emdoor Digital is in charge of R&D of Emdoor. Officially founded in 2010, Emdoor Digital symbolizes the important start for Emdoor to increase research investment and focus on consumer product development and standard operation. Emdoor Digital is one of the earliest teams engaging in tablet PC research, which targets at consumer digital product and solution research and production. At present, it is one of the largest tablet PC main board and ODM/OEM suppliers in Shenzhen.
  • MID solution of Emdoor Digital uses international famous chip processor and intel X86 architecture, the latest ARM architecture with strong CPU function.
    – The latest Android system is adopted, support powerful third-party software.
    – It employs full-touch screen design with resolution covering 800*480 to 1280*800 capacitive multi-touch screen.
    – Built-in WIFI and 3G module (WCDMA/EVDO/TDSCDMA) and GPS module are available.
    – Browsing websites, checking email, QQ/MSN/SKYPK online chatting, online games, online TV, stocks, funds and futures, real-time stock market monitoring, real-time transaction and so on.
    – It is supportive to more office software such as WORD, EXCEL, PPT, PDF, TXT etc.
    – It is supportive to various mainstream audio, video, picture, Flash plug-ins and multiple game clusters.
    – It supports 48 languages and 3G parameters from 28 countries.
    – All solutions adopt ultra-low power consumption but strong power management design, which have stable performance, high yield, fast delivery and good service.
About Emdoor Group:

  • One of the top 10 embedded system enterprises of the top 100 IOT enterprises in China in 2010;
  • One of the top 10 embedded system enterprises in China in 2010;
  • One of the earliest companies in the world that are engaged in research, development and design of MID tablet PCs;
  • Member of IOT Expert Committee of Chinese Institute of Electronics;
  • Golden partner of Microsoft
  • Partner of ARM chip design tool, development tool, ATC training and education
  • Domestic agent of ARM for development tools and chip-level development board.
  • Designated supplier of ARM hardware platform for 2006 National Undergraduate Electronic Design Contest; won “Special Contribution Award” of Ministry of Education and Ministry of Information
  • Its software/hardware co-design system of R&D management system EmTeam won “EDN China” innovation award for 2010;
Emdoor possesses three subsidiaries: Emdoor Electronics, Emdoor Digital and Emdoor Information, which engage in R&D tool, tablet PC and industrial terminal R&D and sales respectively. Emdoor has attached great importance to R&D management, embedment, mobile Internet and Internet of Things for a long time and been devoted to embedment industrial chain in China, providing professional and individualized service and support to customers in chip development tool, EDA development tool, embedment development tool, embedded platform and solution, embedded software test tool, ODM/OEM, embedment training and so on, thus helping customers and global partners to achieve success.
Emdoor has increased investment in independent R&D though making great achievement in independent tablet PC R&D. With the great support of Fudan Technology Venture Park, Emdoor has established Internet of Things R&D Center, Android System R&D Center (Relocated to Shenzhen with a new name Shenzhen Emdoor Information Technology Co., Ltd.) in Shanghai by the end of 2010.
Emdoor Shanghai Internet of Things R&D Center is the new development of Emdoor’s 5-year research in Internet of Things, making wireless sensor networking technology and practical new sensor technology commercialized.
Relying on mature tablet PC R&D platform of Emdoor Digital, Shenzhen Emdoor Information Technology Co., Ltd. has furthered developed a series of industrial tablet solution, such as Zigbee tablet, NFC tablet, RFID tablet, Z-Wave tablet, one dimensional barcode, two dimensional barcode, Infrared Spectroscopy, custom-made industrial tablet, and multiple Internet of Things solutions. It realizes standardized module production based on mature product architecture, enabling itself to create custom-made functions with simple module configuration according to the demand of the project.

As of 2012

http://www.emdoor.com/ Emdoor Electronics 亿道电子

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Emdoor Zigbee Z Wave Tablet Introduction [qing shi YouTube channel, Sept 5, 2012]

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Emdoor NFC Tablet Peer To Peer Introduction [qing shi YouTube channel, Sept 5, 2012]

Emdoor shows $140 9.7″ and $85 7″ Telechips 8803 ARM Cortex-A8 ICS Tablets [Charbax YouTube channel, Jan 13, 2012]

[At CES 2012] Emdoor Digital Technology Co Ltd shows Android 4 Ice Cream Sandwich working on their Telechips based 7″ capacitive and 9.7″ IPS capacitive based Android tablets.

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Emdoor Digital Company Brief: [as of August 2012]

Emdoor Digital subordinate to Emdoor Group is responsible for R&D of Emdoor Group. Emdoor Digital was established in 2010, which symbolized the start that Emdoor Group increased the investment in R&D and its long-term devotion to R&D and standardized operation of the consumer goods. It is positioned for the R&D and production of the digital consumer goods and solutions, with the aim to becoming one of the largest tablet personal computer mainboard and ODM/OEM suppliers in Shenzhen.

Emdoor Digital takes up the R&D team and quintessence of tablet personal computer since 2004, particularly since 2008, having had a specialized R&D team with perfect technology and rich experience since its very start. During the past six years, this team has designed the high-speed ARM embedded processors of Intel/Marvell Xscale PXA255/PXA270/PXA272/PXA310/PXA320 series based on high-speed ARM processors, and it is the largest third-party design team in China for the previous Intel embedded processor with Xscale ARM architecture, good at the substrate design of the software such as Linux, Android, WinCE5.0/6.0 and Windows Mobile operating systems, and having completed the design of multiple customized product solutions.

It is noteworthy that since 2004, Emdoor all the time supported Intel University Program covering the laboratories in Category-A schools of higher education, such as Tsinghua University, Peking University, Xidian University, University of Electronic Science and Technology of China, Tongji University, Fudan University, Zhejiang University, Nankai University, Nanjing University and South China University of Technology, till Intel sold this business to Marvell in 2006. During nearly 8 years from 2003 till 2011, Emdoor education platform and teaching scheme has been purchased by National-level Electrotechnic and Electronic Experiment Demonstration Center of Xidian University, and the embedded laboratories or electrotechnic and electronic experiment centers in almost all schools of higher education (including higher vocational and training colleges).

Emdoor Digital MID Solution Brief:

  • The Emdoor Digital MID Solution mainly uses Amlogic AML8726-MX, AML8726-M3 processor, with the core of Cortex-A9, clocked at 1.5G and featuring strong capacity.
  • The latest Android 4.1 system is adopted, able to support Flash11 and powerful third-party software.
  • All-touch design is adopted, with all levels of resolution covering 800*480-1280*800.
  • Built-in WIFI wireless network can support 3G modules (Optional), WCDMA / EVDO / TDSCDMA, as well as optional built-in GPS modules.
  • It can support web surfing, e-mail sending and receiving, QQ / MSN / SKYPK online chat, online games, Internet TV, stock + funds + futures, real-time pricing, real-time transactions and more other office software, as well as browsing and editing of WORD, EXCEL, PPT, PDF, TXT and other document formats.
  • Able to support all major audio, video, photos, FLASH plug-ins and a number of game sets, as well as 38 countries’ languages and 28 countries’ 3G parameters, all programs use ultra-low power consumption and robust power management design, boasting stable performance, high productivity, fast delivery and excellent service.

Products Development:

  • Feb. 2008  Tablet R &D team was under preparation.
  • Dec. 2008  1st tablet solution which was based on Marvell PXA303 was developed successfully.
  • Mar. 2009  Selected as the key cooperative Design House of Marvell in Great China.
  • Apr.  2009  Tablet with 4.3” touch screen and based on Android 1.1 was 1st published in China.
  • Jun. 2009  Series of Android Netbook were released.
  • Sep. 2009  Tablet with 7” touch screen and based on Android1.5 was 1st published in the industry.
  • Jan. 2010  Tablets with 7” touch screen and built-in WCDMA based on Android forayed into Japanese market.
  • Mar. 2010  7” Tablets with built-in WCDMA based on Android forayed into Germany Vodafone Telecom.
  • Apr. 2010  Changed the chips solution supplier from Marvell to Telechips.
  • Oct. 2010  Mass production started, the PCBA sales volume in Q4 was over 250,000 pieces.
  • Jan. 2011  Tablet solutions based on Android2.3, Telechips 8803, Cortex, 1.2GHz was 1st published in the industry.
  • Apr.  2011  Tablet solutions from 5” to 10” based on Android 2.3.3, Telechips8803 were keeping steady mass production.
  • Jul. 2011  Be the supplier of well known educational enterprises in China for teaching platforms.
  • Sep. 2011  Successively released diversified new tablet solutions such as EM76, EM78, EM89, EM101 and EM102.
  • Oct. 2011  Emdoor Digital was participated in the China Sourcing Fair (Electronics & Components), which was hosted by Global Sources in Asia World-Expo, Hong Kong.
  • Dec. 2011  Tablet solutions from 7” to10” based on Android 4.0, Telechips 8923, Cortex new generation (Cortex-A5) were developed successfully.
  • Jan. 2012  Emdoor Digital was participated in the International Consumer Electronics Show (CES) in L.V.
  • Feb. 2012  Tablet solutions from 7” to10” based on Android 4.0.3, Amlogic 8726, Cortex-A9 were developed successfully.
  • Mar. 2012  Emdoor Digital was participated in the International CeBIT in Hannover Germany.
  • Apr. 2012  Emdoor tablet solutions based on Amlogic AML8726-MX Dual Cortex-A9 were first appeared in China Sourcing Fair (Electronics & Components) in Hong Kong.
  • May. 2012  Emdoor published mass production solution of Dual-core Tablet PC which based on Amlogic AML8726-MX Dual Cortex-A9 in new products release conference.
  • Aug. 2012  Tablet solutions based on Android 4.0.4, Amlogic 8726-MX, Dual core Cortex-A9 appeared successfully at the first China Sourcing Fair-Sao Paulo in Brazil.

2014 will be the last year of “free ride” in the smartphone and tablet spaces for ARM-based competitors of Intel – at least what Intel is insisting again

With 2013 performance of only 10 million tablet chip sets (for Windows mostly) Intel is still confident in its ability to deliver 40 million of those (with increased Android portion) in 2014. To achieve this they will be doing a lot of enabling across the industry to take the Bay Trail-based tablet BOM cost down to an equivalent level. They expect that the company’s overall margin will be hit just by 1.5% because of this required in 2014 effort. They are saying that Intel will be safe from 2015 on as moving to 14nm process technology with next-generation (even in terms of micro-architecture) Broxton and SOFIA SoCs for tablet and smartphone devices. They are basing this statement on their inherent “transistor density” advantage against TSMC from that point in time on, despite some analysts’ opinion of the economy of scale advantage of TSMC in terms of the number of wafers produced.

Meanwhile the possible direction of leading OEMs got a hint with New Acer CEO introduced to the media [Formosa EnglishNews, Jan 14, 2014]

In a press conference today, new Acer CEO Jason Chen said he looks forward to transforming the struggling Taiwanese computer maker. Chen was joined by Chairman Stan Shih, who recently rejoined Acer in an effort to resurrect the company he founded. Acer Chairman Stan Shih appeared with new CEO Jason Chen. They smiled broadly and wore matching pink shirts at today’s press conference.Stan Shih Acer Chairman I look forward to Jason being an outstanding performer and soon eclipsing me. Reporters will forget about Stan.Chen was lured away from TSMC. His expertise is in marketing, and he was the youngest ever TSMC senior vice president. His resume also includes prior stints with Intel and IBM.Morris Chang TSMC ChairmanI think it’s a good thing that TSMC can train people to work and lead other com

With media generally reporting that Acer’s biggest mistake was its too early and too heavy bet on ultrabooks it is clear that OEMs will take a very cautious approach with Intel’s efforts to decrease the Bay-Trail based tablet costs down on the BOM level, as it is exactly what happened with ultrabooks. Instead the will try to solidify their tablet market position with ARM-based tablets in all segments of the tablet market, from the lowest cost upto the premium. Moreover, Jason Chen’s appointment to the CEO position of Acer is also showing that even for ongoing efforts OEMs need a very detailed and deep understanding of the SoC manufacturing and even the process technologies. Take note of Jason Chen’s history of employment in order to understand that:

  • TSMC: 2005-2013
  • Intel: 1991-2005
  • IBM: 1991-1998

In other regards we only know that Acer to start new operation strategy in April to focus on BYOC (Build Your Own Cloud) [DIGITIMES, Jan 13, 2014] and that “In the future, all of Acer’s businesses including desktop, notebook and tablet will involve the BYOC platform and it is hoping to strengthen its product lines through the services.” It will be interesting to watch what that means as my previous conclusion was Leading PC vendors of the past: Go enterprise or die! [‘Experiencing the Cloud’, Nov 7, 2013].

Now back to the Intel related information in terms of details in their earnings call. Note before that the correlation of Intel and Microsoft stock prices (as well that the stock market was absolutely not happy with Intel results and especially with the “flat 2014” outlook):

image

The company’s stance for 2014 is indeed not rosy as Intel to reduce global workforce by five percent in 2014 [Reuters, Jan 17, 2014].

From: Intel’s CEO Discusses Q4 2013 Results – Earnings Call Transcript [Seeking Alpha, Jan 16, 2014]
Inserted slides are from Investor Meeting – Stacy Smith (CFO) [Nov 21, 2013] while the acompanying text is from Intel Shares Mobile Progress, Priorities and Product Pipeline at Annual Investor Day [Technology@Intel, Nov 25, 2013] if reference is not put underneath

[On transistor density and wafer cost]

Mark Lipacis – Jefferies

Thanks for taking my question. At the Analyst Day, you addressed your view on transistor density and your expectation for leadership on that vector, but I have to say this discussing that idea with investors is a consensus view that seems to be that Intel has an inherent wafer cost disadvantage that relative to TSMC that neutralizes or more than neutralizes your transistor density advantage and the argument is that TSMC ships more wafers and therefore has more better purchasing power than you and its lower labor cost, so net-net, they have just a big huge advantage of wafer cost that you should have a hard to, too hard of a time to overcome. So my question is do you think that’s a fair view. Can you help us talk to the relative elements of the wafer cost and how you think you can compare? Any kind of help that you give us on the cost dimension would be extremely helpful. Thank you.

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From: CES: Process Will Still Win in Mobile, Says Intel’s Eul [Barrons.com, Jan 9, 2014]
Eul points out that Qualcomm, and other competitors such as Nvidia (NVDA) and Broadcom (BRCM), all of whom are dependent on Taiwan Semiconductor Manufacturing Company to actually make the chips they design, will run into a problem as Taiwan Semi’s technology stops scaling.
Intel had made the point at the analyst day presentation, and Eul repeated it: As TSMC moves from 28 nanometer to 20 nanometer, it will run into a problem at the subsequent step, 16 nanometer, where TSMC will not add any real reduction in transistor size. That, says Eul, means that 16-nanometer parts a few years from now will be stuck at a 20-nanometer feature size while intel presumably zooms ahead to 10 nanometer by that time.
And what that means is that, unable to scale the density of a chip as Intel can, Qualcomm and Nvidia and Broadcom and the others will not be able to integrate as many parts as Intel on a single semiconductor die.
And so to those who point out that Intel hasn’t yet released its integrated baseband chip, Sofia, mentioned above, Eul contends the company will have the last laugh in a few years’ time as Qualcomm and the rest hitting a scaling wall.

Brian Krzanich – Chief Executive Officer

You know I think the first thing to remember is that what really counts in all of this is transistor cost and what we really talk about in our Moore’s Law of Curves and when we talk about transistor density is driving a consistent cost reduction of the transistors and so wafer cost is one segment of that. I’m not going to comment on you know TSMC’s wafer cost versus our wafer cost but we feel confident that our relative level of scaling and our internal wafer cost are such that we believe we have a leadership position in transistor cost.

When you’re talking about any product whatever it is, a logic product that’s a low-end microprocessor for wearable or internet of things or high-end Xeon server. You’re talking about the number of case and hence the number of transistors required to put that logic device together, it doesn’t matter whose technology it’s on to some extent. It doesn’t matter what node and so the more cost effective those transistors are whether it’s 500 million or 3 billion the lower the product cost there is and that’s really what we focus on and why we focus on transistor cost. So I think we stand by our what we said at the investor meeting.

[On tablets]

Brian Krzanich: Our disclosure in November of a new smartphone and tablet road map that will include SoFIA our first IA SSD with integrated comps later this year is further evident that we’re innovating and bringing products to market at faster pace. Looking ahead 2014 will be an exciting year as we build further on this new foundation. We have established a goal to grow our tablet volumes to more than 40 million units. Within an emphasis on the value segment. As we’re finishing 2013 with more than 10 million units and a strong book of design wins we’re off to a good start.

Stacy Smith: In the tablet market, we launched the Bay Trail SoC and have started to expand our footprint and market signature in this growing market.

image
The 4X Tablet Campaign:
This year, Intel increased its focus on tablets with key design wins and the introduction of Bay Trail.  Next year, Intel plans to increase tablet volumes by 4X!  Eul signaled a rich pipeline of tablet and phablet design wins for Bay Trail including Android and Windows devices spanning price points from premium to sub $99 products from leading OEMs and the China tech ecosystem. He also said industry leading performance, competitive battery life, cost-reduced SOCs and unique features like 64 bit will help drive growth. Intel gave a first-time demo of the performance gains achieved with a 64 bit Bay Trail system running Windows and showed a 64 bit kernel running on an Android tablet.

Note the details about the 2014 tablet market of ~289+ million units in the 2014 will be the last year of making sufficient changes for Microsoft’s smartphone and tablet strategies, and those changes should be radical if the company wants to suceed with its devices and services strategy [‘Experiencing the Cloud’, Jan 17, 2014] post of mine. The 40 million target of Intel is therefore less than 14% of that.

[regarding: So on the tablet strategy to get the 40 million you’re saying it’s going to be a 1.5 percentage hit.

CFO Commentary on Fourth-Quarter and Full Year 2013 Results
2014 Outlook
Gross Margin Reconciliation: 2013 to 2014 Outlook (59.8% to 60% +/- a few points)
    • – 1.5 points: Tablet impact

    Let’s say you guys get into the second half of the year and you’re not quite to the 40 million if it’s a pretty significant short fall. Would you consider canning that strategy I guess I’m just wondering what the commitment is if the volumes aren’t there but the cost is there by the end of the year?]

    Brian Krzanich: This isn’t a price reduction as normal price reduction would be; it’s not where you are just simply reducing. It’s truly a BOM cost equalizer and remember a lot of our 40 million tablets in ’14 will be based on Bay Trail. Bay Trail was originally designed for Avoton-based PC segments and the upper end tablet [and all Windows]. And so it’s what we are doing here is doing a BOM cast delta relative to the, what the mid and lower end tablets require. And so those are things like Bay Trail may require more layers of a printed circuit board for the board itself, more components on the board and tighter power management controls and things like that. We have a whole program to reduce those throughout the year. So that gives us confidence that as we go through the year, the BOM cast delta will shrink, but if the volume didn’t show up for some reason and I am not going to say that, that’s what’s going to happen, but I am confident it will, but if it didn’t it’s on a per unit basis. And so the spending on that contra would be reduced equivalently.

    Stacy Smith: And I would just add as Brian said we are doing a lot of enabling across the industry to take the BOM cast out in equivalent. These are costs at the system level not at our chip level and it will vary a lot by SKU, but to give you a sense for a Bay Trail platform from the beginning of the year to the end of the year we think that, that BOM penalty drops by more than half. And so it kind of gets better out in time. And then when we get to the Broxton generation we think it’s de minimis.

    Brian Krzanich: Both Broxton and SoFIA are just specifically designed to eliminate that delta.

    image
    Say “hello” to SoFIA:
    By the end of 2014, Intel will deliver a new integrated Atom processor + communications solution for entry and value smartphones and tablets, code-named SoFIA. In his presentation, Eul highlighted that Intel’s Infineon wireless assets make the company an “incumbent” in the mobile phone market, shipping more than 360M mobile platforms a year spanning 2G and 3G solutions. He said SoFIA builds on the proven 3G communications platform to deliver a competitive and highly integrated, IA-based mobile solution aimed at the fast-growing market for entry smartphones and tablets. The 3G version of SoFIA is expected by the end of 2014, and Eul said an LTE version would follow in the first half of 2015.
    Accelerated Mobile Roadmap: While specific product details will be saved for a later date, Eul signaled a robust pipeline of new Atom processors and multi-comms solutions for 2014 and beyond to address devices spanning market segments from entry to performance smartphones and tablets, an approach he called “market-oriented pragmatism.” In addition to SoFIA, Eul noted:
      • Broxton in 2015 Intel plans to deliver a 14nm, 64 bit SOC based on a new, next generation Atom architecture (Goldmont) targeted for hero devices. Broxton is being designed for pairing with Intel’s next generation LTE solutions.

      [regarding: If we look at tablets and smartphone, what type of units do you need to reach for that business to stop having a material impact in gross margin from is 10 points higher utilization rates and excluding the contra revenue impact and that’s it? So just looking at the 40 million units target for this year, what type of volume do you need to get in order for gross margin to start appreciating from the west of the business if you exclude the contra revenue impact?]

      Brian Krzanich: Yes, it’s hard to say. I mean, I will bridge back to our strategy here. Our strategy is that we are going to use our process technology leads. We will have leadership products that also are competitive or maybe even leadership in terms of cost and I showed some data at the investor meeting that just kind of showed the die size as we progress from Bay Trail to Broxton to SoFIA and so you can get a sense of the kinds of cost structure that we are going to have on a per unit basis. I don’t think it causes on a percentage basis. Yes, I can’t – I am not envisioning if this causes the gross margin percentage to go up, but you can definitely get to a space once we get through these contra enabling dollars where every unit we sell is accretive on a gross margin dollars per unit. It’s utilizing factories that we have in place for PCs. And so it’s a nice adder of that gross margin dollar per unit standpoint.

      [regarding: Bay Trail Android tablets]

      Brian Krzanich: Most of the Bay Trail Android tablets really start showing up more in Q2 than in Q1 and that’s again purely you know remember we made a shift, an original program for Bay Trail was all Windows. As we came into the midpoint of the year we sandbox [ph] shift and make it Windows and Android and so you know our OEM partners as well are targeting more towards Q2 and it’s just when you do you go and start putting back in that back to school event which is a next seasonal place where upside usually occur.

      [regarding: On the smartphone or on tablet space, I think it is true that Intel has a manufacturing lead, but do you think your cost reduction efforts and then the Moore’s Law advantages ever progressed faster than the ASP declines in the space. In other words, do you think Intel can be sustainably profitable in the mobile space which is maturing?]

      Brian Krzanich: Yes, we absolutely do. You saw at the investor meeting products like SoFIA, which really are going to be put on to 14-nanometer are fully integrated all the way through with the 3G option or an LTE option and that LTE is with carrier aggregation. Those kinds of products we believe are very, very cost competitive in fact leading from a cost position. In addition, we don’t talk a lot about, but we are already in that low cost Asia market. We are inch and then we are working with ODMs there. That’s actually where a lot of the innovations coming out of for some of these cost reductions on tablets and where we are getting the cost reduction ideas. So we are in that market now. We sold out of that Shenzhen low cost market in Q4. We will continue through it – through 2014 and with products like SoFIA on leading edge technology, we are very comfortable that we can get into those very low price points.

      Microsoft answers to the questions about Nokia devices and services acquisition: tablets, Windows downscaling, reorg effects, Windows Phone OEMs, cost rationalization, ‘One Microsoft’ empowerment, and supporting developers for an aggressive growth in market share

      Preceding analysis of the announcement materials on this blog:
      Unique Nokia assets (from factories to global device distribution & sales, and the Asha sub $100 smartphone platform etc.) will now empower the One Microsoft devices and services strategy [‘Experiencing the Cloud’, Sept 3, 2013]
      Other views are given here as well, after the Q&A excerpts coming immediately below. From a Reuters’ editor, an IHS senior analyst, an investment bank executive, and a business news presenter on France24 – in the form of 4 embedded videos. Those views could be summarized as “Nokia did a good deal while the success of Microsoft with this acqusition is uncertain and needs a lot of further investment”.

      Let’s see how much the answers to the questions on the Microsoft Nokia Transaction Conference Call (Sept 3, 2013 ) were able to clarify the analyses and critical views: 

      Tablets?

      STEVE BALLMER: Tablets is an area where we absolutely have our own first-party hardware, as you know, and see opportunities to continue to build and strengthen. And it’s an area where we have very strong programs in place with our OEMs, particularly on the Intel Atom-processor-based product lines that people will really get a lot of value on, and you’ll see a range of new products coming for the holiday season.

      Scaling Windows down?

      TERRY MYERSON: It’s definitely a priority for us to bring Windows to as many customers as we can around the world. Lower-price phones is a strategic initiative for the next Windows Phone release, but we have nothing more really to say now.

      Acquisition effect on the reorg?

      STEVE BALLMER: No [effect], the reorg is absolutely intact. Obviously, the devices business has a broader scale and new capability. Julie Larson-Green, who is running devices and studios is flat out. We’ve got a lot of work we’re doing here over the next several months. And Julie and her team will work on a planning and integration phase. Julie will continue. She’s excited about working on devices, but absolutely, the critical mass of the group with that acquisition is in the phone space, and Stephen Elop will run the group and will take the appropriate steps with Julie working with Stephen to figure out appropriate integrations.

      Windows Phones coming from OEMs in the future?

      STEVE BALLMER: Today, Nokia, as I said, is well over 80 percent of all of our phones, and I don’t foresee that changing dramatically in the short run, but as the market grows, I expect to see additional percentages, if you will, go to our OEMs, but it’s premature to predict today. We definitely have interest from OEMs in the Windows Phone opportunity given that people understand we’re going to blaze the trails here with our own first-party hardware.

      Cost rationalization over time?

      STEVE BALLMER: Amy will take it. I do want to highlight that in many hardware companies, manufacturing labor is primarily outsourced. And Amy can remind us the numbers, but in Nokia, there is more in-sourced manufacturing. Nokia has had a strategy about that that, obviously, they’ve executed very well. But you kind of have apples and oranges a little bit between the 32,000 and our almost 100,000. But Amy, why don’t you provide some context and detail?

      AMY HOOD: Sure. Thanks, Brent. About 18,000 of those 32,000 employees are really directly a part of the manufacturing business. And so I think a better way as you think about the scale and opportunity is to really focus on the percentage of Nokia outside of that.

      I think both Steve and Stephen did a thoughtful job in the execution slide about talking about the philosophy we’re using as we go through the integration process around the benefits of the incremental sales force that we’re getting with Chris and his team, as well as really going through and being thoughtful about the rationalization so that we get to one voice, one brand, one team that can best execute and be efficient.

      What was not possible that the acquisition enables now, or is it only ensuring a presence in the smartphone market for a long-term basis, i.e. ‘One Microsoft’ empowerment?

      STEVE BALLMER: Well, the latter is certainly true. We see at least three distinct opportunities to do better as one company than as two.

      Number one, we talk about one brand and the unified voice to the market. I will say that I think we can probably do better for consumer name than the Nokia Lumia Windows Phone 1020. And yet, because of where both companies are and the independent nature of the businesses, we haven’t been able to shorten that. Just take that as a proxy for a range of improvements that we feel we can make, we can simplify, the way in which we work with operators and the overall consumer branding and messaging gets much simpler. That is an efficiency of being one company.

      On the innovation front, we’ve done a lot of great work together, and yet as two companies, there’s always some lines along which it’s hard to innovate. The Lumia 1020 is awesome in terms of what it has for camera and imaging, and yet I think as one company we would have doubled down on that bet and made an even greater range of software and services investments around the core hardware platform.

      Third, I think we get business agility. As two companies, we’re making two independent sets of decisions about where and when and how to invest by country, by operator, by price point, and there is, let me say, an inefficiency financially as well as a lack of agility that comes with that.

      So in all three of those areas, despite the fact that I think we’ve done a really good job, we can improve and accelerate quite noticeably.

      How the much needed developer support for the fairly aggressive market share assumption will be ensured?

      Note: the “fairly aggressive market share assumption” was presented by Microsoft as:
      To which I added the following calculation and judgment in my analysis post:
      15% of the 1.7B units in 2018 is 255M units. The ~$45 billion estimated revenue at that time means ~$176 ASP. Considering the latest Q2’13 EUR 157 [$207] ASP of Lumia it seems feasible, but in 5 years timeframe it needs a strong premium strategy to achieve that. … NPV – Net Present Value.

      TERRY MYERSON: Well, for developers today, Windows offers an incredible opportunity with the installed base of PCs, phones, and tablets, and soon the new Xbox One. We want to offer them this opportunity to build either HTML5 applications or native applications that span all of those devices, enabling them to reach segments of users on those devices, users in an enterprise, users on a gaming console, and just provide them very unique opportunities to monetize their application investments.

      So we’re pretty excited about the platforms we’re bringing to market. Developer reception in some areas is certainly better than others, but overall we’re making progress, and we know we’ve got a lot more work to do.

      STEVE BALLMER: One of the keys, of course, is driving volume. We think we have differentiated products. We can tell the story a little bit better. We can get the volume up, and we have over 160,000 applications in the store. We know we have a long way to go, and the key is really offering with our own first-party applications and first-party hardware, enough reasons to buy to drive volumes and then attract the broader developer ecosystem.

      Obviously, HTML5 would be kind of a neutral thing. I would expect all the major platforms to embrace it to some extent. And in some senses, it takes away a little bit of the apps barrier to entry, which we know we need to work hard on right now.

      See also Microsoft Nokia Transaction Conference Call with slides from Microsoft Strategic Rationale inserted- ebook – 3-Sept-2013 
      edited by Sándor Nacsa from those two sources into an ebook format PDF


      The real question around the web is: Can Microsoft do a better job as in Breakingviews: Nokia’s smart to take money & run [Reuters TV YouTube channel, Sept 3, 2013]

      An era is over as Nokia sells its phone business to Microsoft for $7.2bln. The new owner is far stronger, but may struggle to win in smartphones, says Chris Hughes Reuters Breakingviews editor.

      The view of an expert from IHS, a big business analysis firm, for comparison:
      Microsoft & Nokia still face huge ‘brand and cool’ challenge – Gleeson [4-traders.com, 09/03/2013 | 12:30pm US/Eastern]

      Microsoft buys Nokia’s handset business for $7.2 bln. Both companies will be hoping it heralds a new era, but overcoming brand weakness will be a huge challenge. For them both, says IHS Senior Mobile Analyst, Daniel Gleeson.
      SHOWS: LONDON, ENGLAND, UK (REUTERS – ACCESS ALL) (SEPTEMBER 3, 2013)
      1. IHS, SENIOR MOBILE ANALYST, DANIEL GLEESON, SAYING:
      JOURNALIST ASKING DANIEL GLEESON: ‘Well is this a good deal for Nokia and is it enough to drag it into the 21st century?’
      DANIEL GLEESON: ‘It is a big deal. Whether it’s not- I don’t think it is enough really. You’ve got two titans of the past really kind of clashing together. It does provide Microsoft with the ability to merge the handset and the software side of the mobile businesses together which gives it a better chance of breaking through. However I think Microsoft are probably being overambitious. Microsoft has stated that they’re aiming to get 15% of the smartphone market by 2018 which will be equivalent to somewhere in the region of more than 200 million smartphones. Given that the current Nokia smartphone run rate is somewhere in the region of 30 million units, that’s quite a lot of growth that they’re looking for and practically I don’t think that’s possible.
      JOURNALIST: ‘So you don’t think that Apple and Samsung and the like will be quaking in their boots?’
      DANIEL GLEESON: ‘Not at the moment. Microsoft had been very slow in developing the Windows Phone platform over the past few years. There’s been very little development on the software side. Most of the innovation on it has actually come from Nokia. So obviously the hope is that Nokia will be able to bring this innovation to Microsoft and spur on the software development. However, with the current reorganization that Microsoft is going through and the fact that Ballmer is going to be stepping aside at the end of the year or within the next 12 months, that is very uncertain. So it remains to be seen about how Microsoft can evolve and adapt to taking in the hardware unit.’
      JOURNALIST: ‘Sorry, just going to say, Nokia’s shares rose almost 50% this morning. But the company as we all know is still a shadow of its former self.’
      DANIEL GLEESON: ‘Yeah, it very much is. It used- obviously a couple of years ago Nokia was the largest smartphone and handset vendor in the world. It is now I think like behind the many Chinese, smaller Chinese companies in terms of smartphone shipments and dropping rapidly in terms of the handset market. What we see though is that Nokia does have a good future with its NSN business, its network vendoring business. That’s after going through major turnaround over the past while and then past four quarters it’s managed to turn a profit on that. So that’s going to be the future that Nokia’s looking at and that part of the business is looking bright.’
      JOURNALIST: ‘Does this deal do anything to address I suppose what is fundamental certainly in the public’s perception of both companies, the fundamental premise that neither brand is cool in anyway whatsoever. I mean the brands are very, very weak. Does this do anything to address that?’
      DANIEL GLEESON: ‘Fundamentally it doesn’t because as you said this is just simply the uniting of two uncool brands. This doesn’t make it any better. It’s going to take a lot of investment from Microsoft to try to turn that brand around. Of course the upside of it is Microsoft has much deeper pockets to do this than Nokia on its own would have. So you are in the situation where Microsoft was funneling a lot of cash into Nokia anyway to try to support the smartphone unit. So Microsoft presumably just by taking it in-house is just absorbing that cost and it’s going to be able to push even more money into it to try to build that brand and to make it better in the future.’

      And here is a similar view of an executive from a Danish online investment bank, Saxo Bank: The Nokia deal: What’s Microsoft thinking? [TradingFloorCom YouTube channel, Sept 3, 2013]

      Why has Microsoft agreed to buy Nokia’s moible phone business for more than five billion euros? It’s somewhat perplexing to Saxo Bank’s Head of Equity Strategy, Peter Garnry. It’s a great deal for the struggling Finish handset maker, he says. But he has real concerns about how good it will be for Microsoft, one of the world’s leading technology players. Nokia shares rose by around 45% on the open on Tuesday. Peter says it’s also really good news for the company’s bond holders as the company was hemorrhaging cash. However, Peter says Microsoft have paid a lot of money in this deal, which is due to be finalised next year. He says they’re still not as good a hardware company as Samsung or Apple and he adds that nine out of ten acquisitions do not fulfill synergy expectations. He says it’ll be very difficult for Microsoft to integrate Nokia into its business and move it foreward. So where does this leave rival Blackberry, which is already struggling to compete on the smartphone market? Peter says the company should start focusing on what they are good; mobile security and increase shareholder value that way. Nokia’s phone business marks the exit of a 150-year-old company that once dominated the global cellphone market.

      The stock market reaction is discussed further in Investors cautious over Microsoft move on Nokia and how one man got his lost bags delivered [FRANCE 24 English YouTube channel, Sept 4, 2013]

      Microsoft shares dipped by 4.5% after the company bought Finnish phonemaker Nokia’s handset business. Investors are concerned over how well the company will move into producing devices. …


      Full text of Q&A part of the
      Transcript of Microsoft Nokia Transaction Conference Call: Steve Ballmer, Stephen Elop, Brad Smith, Terry Myerson, Amy Hood; September 3, 2013 [Microsoft, Sept 3, 2013] to have the full Q&A context
      OPERATOR: Walter Pritchard, Citigroup, your line is open.
      WALTER PRITCHARD: Great. Thanks for taking the question. Steve Ballmer, on the tablet side, obviously, we could say many of the same things as you’ve put into this slide deck as rationale for doing an acquisition on the phone side as we could say about the tablet side including picking up more gross margin.

      I’m wondering how this transaction impacts the strategy going forward in tablets and whether or not you need to, in a sense, double down further on first-party hardware in the tablet market. And then just have one follow up.
      STEVE BALLMER: Okay. Terry, do you want to talk a little bit about that? That would be great.
      TERRY MYERSON: Well, phones and tablets are definitely a continuum. You know, we see the phone products growing up, the screen sizes and the user experience we have on the phones. We’ve now made that available in our Windows tablets, our application platform spans from phone to tablet. And I think it’s fair to say that our customers are expecting us to offer great tablets that look and feel and act in every way like our phones. We’ll be pursuing a strategy along those lines.
      STEVE BALLMER: Tablets is an area where we absolutely have our own first-party hardware, as you know, and see opportunities to continue to build and strengthen. And it’s an area where we have very strong programs in place with our OEMs, particularly on the Intel Atom-processor-based product lines that people will really get a lot of value on, and you’ll see a range of new products coming for the holiday season.
      WALTER PRITCHARD: And then, Terry, can you talk about just the ability to scale Windows down? Obviously, Nokia has a large base of very low-price feature phones. That base may be sort of dwindling over time, but you’ve been cost-reducing Windows, the specs and so forth, to be able to get Windows down to low-price devices. Can you talk about any efforts to accelerate that process given potentially access to a much bigger pool of low-cost phones that are out there already?
      TERRY MYERSON: It’s definitely a priority for us to bring Windows to as many customers as we can around the world. Lower-price phones is a strategic initiative for the next Windows Phone release, but we have nothing more really to say now.
      STEVE BALLMER: Operator, we’ll move to the next question please, thanks, Walter.
      (Break for direction.)
      OPERATOR: Our next question is from Mark Moerdler from Sanford Bernstein, your line is open.
      MARK MOERDLER: Thank you. Steve Ballmer, two questions: The first one is how does this affect the reorg? Given hardware was in one group and operating systems in another, software in another, does the Nokia device — does the merger affect that? Does it merge into the hardware business, and hardware/content device group? Or does this now change that? And then I have a follow up.
      STEVE BALLMER: No, the reorg is absolutely intact. Obviously, the devices business has a broader scale and new capability. Julie Larson-Green, who is running devices and studios is flat out. We’ve got a lot of work we’re doing here over the next several months. And Julie and her team will work on a planning and integration phase. Julie will continue. She’s excited about working on devices, but absolutely, the critical mass of the group with that acquisition is in the phone space, and Stephen Elop will run the group and will take the appropriate steps with Julie working with Stephen to figure out appropriate integrations.
      MARK MOERDLER: Excellent. And then as follow up on it, what’s your expectation going forward in terms of — I just want to clarify this — the percentage of Windows Phones that will be from OEMs?
      STEVE BALLMER: Today, Nokia, as I said, is well over 80 percent of all of our phones, and I don’t foresee that changing dramatically in the short run, but as the market grows, I expect to see additional percentages, if you will, go to our OEMs, but it’s premature to predict today. We definitely have interest from OEMs in the Windows Phone opportunity given that people understand we’re going to blaze the trails here with our own first-party hardware.
      MARK MOERDLER: Thank you very much, appreciate it.
      CHRIS SUH: Thanks, Mark. I just want to remind you, we do want to get to as many questions from as many of you as we can. So I do ask that you please just stick to one question and avoid long, or multi-part questions, please. Operator, next question, please.
      OPERATOR: Brent Thill, UBS, your line is open.
      BRENT THILL: Thanks. Just on the cost rationalization. Nokia has 32,000 employees versus Microsoft at 99,000. A considerable bulk of employees. Can you just talk about the rationalization over time and your view how that plays out?
      STEVE BALLMER: Amy will take it. I do want to highlight that in many hardware companies, manufacturing labor is primarily outsourced. And Amy can remind us the numbers, but in Nokia, there is more in-sourced manufacturing. Nokia has had a strategy about that that, obviously, they’ve executed very well. But you kind of have apples and oranges a little bit between the 32,000 and our almost 100,000. But Amy, why don’t you provide some context and detail?
      AMY HOOD: Sure. Thanks, Brent. About 18,000 of those 32,000 employees are really directly a part of the manufacturing business. And so I think a better way as you think about the scale and opportunity is to really focus on the percentage of Nokia outside of that.
      I think both Steve and Stephen did a thoughtful job in the execution slide about talking about the philosophy we’re using as we go through the integration process around the benefits of the incremental sales force that we’re getting with Chris and his team, as well as really going through and being thoughtful about the rationalization so that we get to one voice, one brand, one team that can best execute and be efficient.
      CHRIS SUH: Thanks, Amy. Next question, please, operator.
      OPERATOR: Keith Weiss, Morgan Stanley, your line is open.
      KEITH WEISS: Thank you guys for taking the question. You guys have talked about the success and the partnership to date in putting out some really good products. I was wondering, Steve, perhaps you could give us some concrete example of what does the acquisition enable you to do that you guys couldn’t do through the partnership? And maybe give us some more concrete examples there. Or is that maybe not the point? Maybe the point is more so that this really solidifies Microsoft’s presence in the smart phone market, and this is more about ensuring that you guys are going to be a presence here for a long-term basis.
      STEVE BALLMER: Well, the latter is certainly true. We see at least three distinct opportunities to do better as one company than as two.
      Number one, we talk about one brand and the unified voice to the market. I will say that I think we can probably do better for consumer name than the Nokia Lumia Windows Phone 1020. And yet, because of where both companies are and the independent nature of the businesses, we haven’t been able to shorten that. Just take that as a proxy for a range of improvements that we feel we can make, we can simplify, the way in which we work with operators and the overall consumer branding and messaging gets much simpler. That is an efficiency of being one company.
      On the innovation front, we’ve done a lot of great work together, and yet as two companies, there’s always some lines along which it’s hard to innovate. The Lumia 1020 is awesome in terms of what it has for camera and imaging, and yet I think as one company we would have doubled down on that bet and made an even greater range of software and services investments around the core hardware platform.
      Third, I think we get business agility. As two companies, we’re making two independent sets of decisions about where and when and how to invest by country, by operator, by price point, and there is, let me say, an inefficiency financially as well as a lack of agility that comes with that.
      So in all three of those areas, despite the fact that I think we’ve done a really good job, we can improve and accelerate quite noticeably.
      KEITH WEISS: Excellent, thank you.
      CHRIS SUH: Thanks, Keith. Operator, I think we have time for two more questions, next question, please.
      OPERATOR: Rolfe Winkler, Wall Street Journal, your line is open.
      ROLFE WINKLER: Hi, you guys have 15 percent, a fairly aggressive market share assumption for where you guys are going to go in a few years. I guess I’m wondering, to get there, one thing you’re going to need is a lot of developer support. Developers already have IOS, Android — you can make an argument that HTML5 over the next few years will grow, that will give them a third development platform. How will you guys convince them to develop for Windows Phone?
      STEVE BALLMER: Terry, why don’t you talk a little bit about developers, if you don’t mind?
      TERRY MYERSON: Well, for developers today, Windows offers an incredible opportunity with the installed base of PCs, phones, and tablets, and soon the new Xbox One. We want to offer them this opportunity to build either HTML5 applications or native applications that span all of those devices, enabling them to reach segments of users on those devices, users in an enterprise, users on a gaming console, and just provide them very unique opportunities to monetize their application investments.
      So we’re pretty excited about the platforms we’re bringing to market. Developer reception in some areas is certainly better than others, but overall we’re making progress, and we know we’ve got a lot more work to do.
      STEVE BALLMER: One of the keys, of course, is driving volume. We think we have differentiated products. We can tell the story a little bit better. We can get the volume up, and we have over 160,000 applications in the store. We know we have a long way to go, and the key is really offering with our own first-party applications and first-party hardware, enough reasons to buy to drive volumes and then attract the broader developer ecosystem.
      Obviously, HTML5 would be kind of a neutral thing. I would expect all the major platforms to embrace it to some extent. And in some senses, it takes away a little bit of the apps barrier to entry, which we know we need to work hard on right now.
      CHRIS SUH: Thanks. Operator, let’s move to the last question, please.
      OPERATOR: Our last question comes from Rick Sherlund.
      RICK SHERLUND: Thanks. I wonder if you could just share with us whether ValueAct was made aware of this before they entered their cooperation and standstill agreement.
      STEVE BALLMER: Brad, do you want to take that?
      BRAD SMITH: The answer is no. You would not expect the company to disclose material, non-public information to an entity that doesn’t have an appropriate non-disclosure agreement. So the answer is no.
      RICK SHERLUND: Okay, thank you.
      CHRIS SUH: Okay, so that will wrap up our call today. Thank you, again, for joining us. We look forward to seeing many of you at our financial analyst meeting, which will be held on September 19th. Thanks again.
      END