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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."
Maybe MSFT is reallocating the funds to another portion of their market? Perhaps Longhorn?
Either that or this is the first sign that MSFT is going belly-up. *g*
Clearly Microsoft is reeling under the impact of Linux, and is regrouping for a last stand.
perhaps it's a move toward their plans to make harware free*
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.
Microsoft had no real way to apply "embrace and extend" into the networking world. When it comes down to it, there isn't much different between equal models accross the brands on the consumer networking shelf.
I've even noticed some AT&T-branded networking equipment showing up at CompUSA stores. More or less, that shelf was getting a little too crowded and stores were going to drop the weakest link if Microsoft or some other player didn't gracefully bow out soon.
Perhaps it is because they don't see anything great and revolutionary in Wireless LAN hardware- you obey a spec, the interesting part to the user is the software interface, and Microsoft controls that still.
The other examples (like PDA devices) represent entirely new niches in the market, or (like mice) represent strong branding oppurtunities- if you make a good product that someone handles everyday, that's decent profits and good PR (I'm a Logitech fan myself, even swapped out the MX300's red LED for a violet one).
I'm sure tech analysists and security experts thought of that long before you did. If your assertions were true, I think the case would have been blown wide open. Besides, it would be far too easy to pick up on any traffic reporting via any traffic sniffer.
Um, put it behind a machine you control, like a smoothwall, and monitor it?
How hard is that?
Call me a tinfoil-hat user if you like. But how do I know they wouldn't be logging info I don't have access to and having it sent to their servers?
Just wondering, who is the official network equipment maker of the tinfoil hat wearers?
"Instead, the plan is to apply the knowledge we have gained in that category to future products and services."
Seems like the don't think their current product offerings aren what they see as being the big picture in the developing market. In the future, Microsoft will be back with new products (or rehashed old ones... which in marketing speak is new) that they think gives them better leverage, market penetration, monopoly power...er...er
Regardless, they'll be back.
Matt Fahrenbacher
James Tiberius Kirk: "Spock, the women on your planet are logical. No other planet in the galaxy can make that claim."
MS also started Expedia and sold it off when it became popular. Bill Gates said that it originally started as a way to push MSN, and then turned into a travel agency and he had no experience there. He wanted the company to stay in it's core market.
I think that Cisco also doesn't want any competition for it's Linksys brand. They may have pushed MS. Cisco makes a lot of software and this may have been a deal to push some of their software to run on Windows. Vonage runs a system built by Cisco on Sun Microsystems, and this may be a backroom deal for Sun to push their software on the Windows platform.
Microsoft does have some decent hardware like the Intellimouse Explorer but for WIFI I'd stick with Linksys, a division of Cisco Systems, Inc.
...has always made me look to other manufacturers. I mean, seriously. I'm not trying to be an anti-M$ zealot or anything, but I trust hardware manufacturers who SPECIALIZE in hardware, not software. It'd be like buying a Jello-brand car. Sure, they make great jello, but...
It is pitch black. You are likely to be eaten by a grue.
Don't know if anyone remembers these, but there is a precedent for MS releasing hardware and pulling it. They had a 900 mhz. "phone system" that had 2 cordless phones and a computer hub. Sold it for a year, pulled it. They released a speaker system that they pulled within a year or so. And, they have apparently stopped manufacturing SIDEWINDER gaming peripherals (sp?). Might be more. That's off the top of my head.
My good looks paid for that pool, and my talent filled it with water.
I personally would have liked to have seen MS play a little bit harder in the Wireless space. Combined with their Kerberos implementation, we could have seen a commodity EAP-TLS system that worked out of the box. Boom! All of your wireless security concerns gone.
And no....don't talk to me about open-source here. I''ve played around with building an EAP-TLS system with Free Radius and after two days of solid effort it still wasn't working.
A real shame that opportunity has been missed.
I thought there were consumer protection laws that stipulate the availability of service and support for 7 years from the date of the original sale. Isn't two years a fairly short end of life cycle for a consumer electronics product?
I know of no such law. Once your warranty is up, you're at the vendor's mercy for what kind of support, if any, is going to be available to you.
This is more or less what always happens when a vendor discontinues a product line... you've got an orphan product that you might as well toss when it breaks.
Then again, what's the point of servicing a broken $50 router... most flaws that would cause it to stop working usually are more expensive to fix than the thing's worth.
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.
Maybe they left the market because it wasn't a boom as they thought it would. I imagine wired networks are still outgrowing the wi-fi ones by a wide margin
did you forget to take your meds?
They're called microsoft, not microhard. Who would want their hardware? /typing on a microsoft natural keyboard.
How ya like dat?
Microsoft made a sound card for MS-Win3.1 with voice recognition software. Both the card and the software worked well (I had one) but they dropped it after only a short time.
Lots of the 802.11g products that have been manufactured in the last few months 802.11g are able to be firmware upgraded to 802.11i. The big question is if this will be considered "support" from MS. I'm going to be pretty pissed if I am not going to be running AES encryption because MS decided to dump its customers.
Insightful? When was the last time any of you bought a computer? And with a new wi-fi standard every 6 days, 2 years of support is huge!
Yuma, AZ...You will never find a more wretched hive of scum and villainy. We must be cautious.
Perhaps competition from Cisco (Linksys subsidiary), NetGear, and even Apple (which has a disproportionate marketshare) made MSFT blink.
We are talking about the same MS, right?
The same MS who jumped into the game console market with Sony and Nintendo? Who wrote Word and Excel, when the market already had Wordperfect and Lotus? Those guys? The ones who wrote Internet Explorer when Netscape was already on it's third release?
You can say what you like about MS, but don't say competition scares them. They look at an unentered market the same way Peg Bundy looks at a bon-bon. They know that they can intimidate and out-spend anyone on the planet. Even the law can't stop them, because they simply view the fines as a business cost.
A better question to ask would be why. Why would they leave a market, just when they're gaining share? This is what they live for. Move number two in this game is to take revenue from the other near-monopolies and turn this market opening into another monopoly, to fuel the next market they wish to exploit.
It can't be that they view the market as a brick wall. They didn't view the DOJ as a brick wall! I'm supposed to believe that after that, Cisco scares them?
I don't know why they left the market, but believe me...they have a good reason, and it's in everyone's best interest to figure out what it is. Especially the people who make WiFi equipment.
Weaselmancer
Weaselmancer
rediculous.
That's a Supreme Court ruling, not a law. And I'm afraid it was that the "lifetime warranty" for a sewing machine meant 7 years. It left open the possibility that other devices could have short or longer lifetimes. Frankly if you can get 2 years of support from Microsoft, you should count yourself lucky.
Eh? Perhaps you're trolling, but seeing as these home routers usually use tiny little ARM cpus with embedded operating systems, they couldn't use IIS even if they wanted to. IIS is certainly not a "small" web server, nothing I'd want to put on a router. They probably hand code their own web server, or use whatever came with their embedded os.
-twb
It looks like you're trying to trying to configure your wireless router!
Would you like to:
Microsoft USB wireless adapters actually work very well with the Redhat and Fedora Core Linux distributions... if you use the open source Linux-Wlan NG drivers. I would seriously recommend them to anyone who wants to use 802.11b with Linux.
In case of fire, do not use elevator. Use water!
They are naturally pulling out of this market because they were among the few remaining suppliers that still sold Prism2 cards which were usable in Linux. The other suppliers like D-Link and SMC had much better soloutions in place for delivering windows only hardware and changing chipsets from time to time to discourage reverse engineering. :->
--
They're primarily a software company after all.
The only thing I can figure is they enter hardware markets that will help them sell more software.
I can understand this for Xbox (break into the gaming market with loss-leader hardware, but eventually sell lots of lucrative game titles).
WiFi APs though? How was this going to help them sell windoze (or any other software)?
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.
After careful evaluation, the Microsoft hardware group has decided to scale back its broadband hardware and networking business," a representative said. "Instead, the plan is to apply the knowledge we have gained in that category to future products and services."
Translation: After offering a product based on actual standards, which offer us no way to develop a strangle hold on consumers, we've decided to drop this product in order to devote more time coming up with a proprietary solution...
I was a beta tester for the first round Microsoft Broadband Networking software & hardware. The networking software is very good, especially for home users who are new to networking. I have 2 laptops and 3 desktops wired with Microsoft wireless networking cards & networking cable. It was only when I got the base station and cards (beta) from Microsoft that I set up a "complete" network at home to replace my two desktop peer to peer network.
I guess I don't mind either way... I just won't be getting any more free MS hardware. I may now have a chance to check out "the competition."
_Eighteen_months_ from now a lawsuit will be filed by _a_networking_manufacturer_ claiming that Microsoft violated a private, previously undisclosed agreement to exit the _Wi-Fi_hardware_ market if this company would _(pick_from_list_below_)_
- end support for MS competitors
- allow MS exclusive license this company's new technology
- provide legal support in a Microsoft trial or contract dispute
In the light of Microsoft's business tactics since the agreement, this company now regrets the contract and believes that Microsoft _violated_the_spirit_of_the_agreement_.So thats it! Microsoft apparently is in the wrong business - they're really a great hardware company making lousy software!
Add to this that there's a chance of a moderate-to-severe cash crunch for Microsoft sometime between now and when Longhorn finally (if ever) does come out, current cash on-hand notwithstanding. There's also some of uncertainty about whether demand will be there when it does finally arrive.
I would like to just mention that I have had the same 802.11b PCMCIA card and access point for almost three years now, but on a recent business trip, it got broken.
Several trips to a SuperJumboElectroMegaHut (or a Best Buy, I can't remember which) later, the only 802.11 card that would work "out of the box" with my Linux laptop was a Microsoft MN-520. All the others on the shelf used one of the either not supported or barely supported 802.11g chipsets.
For various job-related reasons using non-standard kernel patches wasn't an option for me, so the few other supported cards were out.
It is getting harder and harder to find wireless cards that work well with the stock kernel (or the Fedora/RedHat kernel, which, of course, can't really be considered a stock kernel).
So I'm sorry to see Microsoft leave this market because they were the best provider of Linux-friendly Wi-Fi cards. Ironic, innit?
Microsoft have dropped several products on the hardware side - most notably their SideWinder range. This is a pity since many of the products were good quality and innovative (guess that breached their business model). MS had the first force-feedback joystick that I can recall and the Strategic Commander/Game Voice controllers added handy new features for gamers. There were a couple of misses too (Dual Shock anyone?) but most of the products were worthwhile - unlike their software.
while I agree on this for the most part, the Bluetooth Keyboard/Mouse Combo just plain sucks. The Mouse never goes into standby, so it's a big drain on batteries. Then 75% of the time, if the batteries die while the computer is off, you have to reinstall - which is very cumbersome.
you have to break out the good old wired versions to do this. They don't even offer a patch to fix this, just suggest a reinstall and or relocation of the bluetooth devices. Now why the hell do I want to reinstall every couple of weeks or so.
You decide!
What is the difference between a small revolutionary change and a large evolutionary change?
Microsoft makes good consumer Wi-Fi equipment but is exiting the market...
It was my understanding that their appliances were very easy to configure, but the performance is poor and the feature set is wanting. Still, I suppose this is somewhat disappointing since there is a need for easy-to-use gateways. Many users looking for uncomplicated solutions will probably turn to Linksys products instead, which are arguably worse.
Perhaps competition from Cisco (Linksys subsidiary),...
Your sentence reads as if you think Cisco is a subsidiary of Linksys. I am quite sure you meant it the other way or I am misreading your sentence.
Their keyboards and mice are, of course, made by Logitech. They are simply branded as Microsoft
Microsoft Keyboards are supplied by Keytronic. The mice are manufactured by Flextronics.
Logitech considers Microsoft their number one competitor in keyboards and mice.
I have tried quite a number of 802.11 base stations and receivers and found M$'s to have by far the strongest most reliable signal, to be the easiest to setup and manage, and to encompass all the important features a wireless system should have without being overly complicated or buggy. Oh, and how can I forget, their tech support for these products is light years ahead of most of the other wireless vendors.
I am really bummed to hear this news, but when microsoft never released any firmware updates for their 802.11b line of products for over a year (actually they did end up releasing one update I believe for the base station, however it was not available through the update feature included in the wireless software) and especially when they began releasing support for WPA in their OS but never released any upgrades to allow their existing wireless products to take advantage of WPA, I started to guess that they were not too serious about competing in this market.
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They are doing what they assume the competition
should do when a niche market is ruled by a
dominant vendor: cut losses and drop out.
Actually, I'd guess that the name "Microsoft" is what causes most people to buy them...
Your average user looking at trying wireless for the first time, is far more likely to have actually heard of Microsoft than a lot of the other companies in the market.
Advanced users are users too!
Microsoft is not in the hardware business. If they make hardware, it is to sell more software.
PocketPC and Tablets are a prime examples. They created the hardware platform so they could market software. I feel that their shortlived entry with sidewinder was to not only set a standard, but also to get other venders desiging hardware that takes advantage of Direct3D. Now that hardware supports it, more game developers will also suport it. It is the chicken and the egg story, but with microsoft making the rules. they tell the hardware that the software supports it and they tell the software that the hardware supports it. Then they show examples of sidewinder and Direct3D, it is so, thus said Microsoft.
I think their entry into home networking was a strategic push to get the quality and usibility up while pushing home networking as a feature of XP. and maybe, just maybe, I realy have no idea what I am talking about, but thought it sounded insightful for the karma.
Im a gamer, not a grammer major. This post is full of spelling and grammer mistakes.
I know it might be nice to think that competition makes MS panic, but if you look at thier history, it's quite the opposite. They deal very well with competition: they crush it. That is the goal of every large successful bussiness. You want to get to the point where you are the only game in town. Usually you can't do that, but you try all the same.
MS historicly does NOT back off, panic, or anything like that when faced with competiton. They just turn up the heat by any means they can, including some that aren't legal (hence the whole case against them). That isn't panicing, it's strategic response. When they see a market they want to be in, they get in it and usually don't quit until they are on top.
Browsers are an excellant example. It doesn't matter how they got in, people love to crow on about how they buy their way in. Yep, they do, that's how a lot of companies do it. See a good product in a market yo want to be in? Buy it. However once there, they just kept fighting and fighting with low (zero in this case) price and continuing improved versions. It worked too.
People seem to think that companies are supposed to like competition and if they try and destroy their competitors it means they are "scared" or "panicing". Not at all. CONSUMERS like competition, and it is important to a capatalism that we have it. Companies, however, do not. When someone competes with them, they compete back and try to drive the other person out of business. Both Intel and AMD are trying as hard as they can to drive the other out of the game. They aren't happily sitting and saying "ok, you take half and I take half". Hell no, they both want to have ALL the market and not have to worry about the other one.
MS is just really successful in this regard. It is partially their huge financial reserves and partially their corperate strategy. They DON'T get scared, they DON'T panic, they just keep fighting until the competition is gone.
You forget that Microsoft is a publicly traded companies. So they are managed by bean counters. Because WiFi equipment is extremely competitive (keeping price down) they cant stay competitive with the other guys who are making the products that are going down in price to the sub $100 category. And keep a high profit ratio. The accountants at Microsoft don't care how well the product works just check to see how many are how much they cost to make (beyond just the parts), how much they sell it for and the percentage of profit they make. So even though they are making a profit selling the products it is not as high as the investors want so they stop the product line. The reason the Mice, Keyboard, Joysticks often sell better because the %s are better. Heck how much does it cost to make a mouse. Including labor $10 and you sell it for $20 They make a 100% profit. Or a keyboard which probably cost $12 to make and they sell it for $80. Those are pretty good ratios. now WiFi equipment is a bit more complicated then a mouse or keyboard. So they could cost $50 to make and they sell it at $75. So the profit ratios is way less plus they are not selling a ton of them like mice and keyboards, Plus the fact that wifi equipment you hide in a little spot in your house it doesn't have much of an advertising value like a mouse or keyboard would were everyone sees it.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
It's a lot easier than trying to reinvent the wheel.