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Microsoft Backs Out Of Wi-Fi Equipment Market
Glenn Fleishman writes "Say it ain't so! Microsoft makes good consumer Wi-Fi equipment but is exiting the market, News.com reports. They'll sell out their inventory, but won't make new models or produce new product. I can't recall a case in which Microsoft had viable products and decent sales and exited instead of spending more money to compete more effectively. Or even when they had non-viable products (Pocket PC's original OS) and spent years and billions before they had something that worked. Perhaps competition from Cisco (Linksys subsidiary), NetGear, and even Apple (which has a disproportionate marketshare) made MSFT blink."
Sales does not mean profits. Even though the sales of WiFi products more than tripled in 2003, the revenue growth of the market wasn't as good. Which means one thing - together with high demand the prices are falling down dramatically, and by now the WiFi equipment is heavily commoditized and thus outsourced to Chinese/Taiwanese/Indonesian manufacturers, which in the hardware world generally means no one else is expecting to make any money off of it (the same for Ethernet network cards, CD-Rs and other products).
The market will grow (in fact there are 700K WiFi networks right now, and much more are expected), but the margin range is just not there - I wouldn't be surprised if by the end of the year the WiFi prices hit such a rock bottom, that some manufacturers will in fact lose money.
Apple is doing very nice - 20.2% of the 802.11g market, the first-mover advantage, and leading in revenues, outrunning even Cisco (according to Business Week). But (a) we still have to find out what the profit margins are on Apple WLAN equipment and whether SteveJ got his R&D expenses back by now, and (b) Apple is one company that is uncapable of fighting price wars. Pitch Apple against a Chinese clone factory pushing millions of WiFi access points and networks cards at half the prices, and market share is eroded. Unless Apple finds some way to lock up consumers into buying its products (easy to do with Powerbooks, not so easy with Airport access point buyers), they won't do well either in this market.
Actually, there is another market Microsoft backed out of recently, game controllers. Microsoft's Sidewinder line of Joysticks and gamepads was actually quite good. Their gamepad was the defacto standard for the PC for quite some time.
Cisco (Linksys subsidiary)
I think you've got that backwards. Cisco owns Linksys.
Unless I'm on crack. Not trying to harp on something stupid.
I have. They're phenominally easy to use, and basically force you to set 128-bit WEP as the default. The newer ones suggest you use 256-bit WPA, which works hunky-dory with Apple's WPA implementation. I have a MN-700 base station a short distance from me right now and it absolutely screams.
What planet are you on, dude? I've got an MN-500 sitting three feet from me. You know what it's doing? Accepting wireless connections in the clear from anyone in range. And no, it's not because I'm a selfless soul. In fact, all it's doing is sitting around playing WAP and switch for a few systems behind a LEAF Box simply because it doesn't have the friggin' HORSEPOWER to handle standard loose UDP methods in a NAT scheme. Asheron's Call - a game Microsoft PUBLISHED and currently controls the billing for - cannot be played on two systems behind it. I would assume the same goes for EQ or most other online games that use multiple port-triggered UDP connections.
Not to mention that WEP is OFF by default, it doesn't force you to use it at ALL, and in fact they make it WAY more difficult to turn on (especially at 128-bit) than it actually needs to be - enough so that most normal people wouldn't even bother with it.
Frankly, I love Microsoft's input devices (be they voice, mouse, keyboard, Joystick, or oddities like the Strategic Commander, regardless of whoever makes them), but their networking equipment is far beyond subpar.
You thought that this sig was what you think that I thought you wanted me to think. I think.
Like their keyboards and mice, they're damn fine products.
Let's not overdo it here. Their keyboards and mice are mediocre at best, just as their wi-fi equipment is. I owned an MN-500 when it was first released, and the thing wouldn't hold a connection for longer than 30 minutes. Turned out it was a known problem that a lot of other people had as well. I took it back, got myself a D-Link and haven't had a problem since. (Note: I'm not endorsing D-Link, just saying MS's products are no better.)
MS has a ton of competition in the wi-fi market. It does seem surprising that they don't see it as a viable revenue stream but it may just be a case of one too many products taking away from their core focus (which is still OS's and Office software). It would be very hard for them to really become dominant in wi-fi because the field is so crowded; it's not a case of beating one or two enemies, as it is in PDA's or game consoles. They'd have to take down many, many well-established and respected companies. They probably just decided it wasn't worth the effort.
As for their keyboards/mice, I just want to say that people who think these are the best of the breed just have not used a real keyboard and/or mouse. Find an IBM Model M or Northgate (Avant) keyboard and then tell me any MS model is even in the same class. MS's keyboards are the same "good enough" level of quality that everyone else seems content to make these days; rubber dome, mushy feel, questionable build quality. Calling them "damn fine" is like saying a Firebird is a damn fine sports car or the Sizzler makes a damn fine steak. Both are serviceable, but hardly in the same class as a Porsche or a Peter Luger. MS's wi-fi equipment followed the same pattern; nothing really to distinguish it from anybody else, and with the same intermittent firmware issues as every other manufacturer seems to have.