Entertainment and Devices division President Robbie Bach will retire in the fall, allowing two lower-level executives report directly to CEO Steve Ballmer. The decision comes as the largest software maker in the world is facing increasingly strong competition from Apple's iPhone and the Android operating system, Google, aimed at the smartphone market.
Member of the team at Microsoft for 22 years, Robbie Bach, 48, led the entertainment and devices unit of the company since 2005, and was responsible for launching the original Xbox console in 2001. From July 1, the two senior vice president responsible for the areas of video games and cellphones, Don Mattrick and Andy Lees, respectively, will report directly to Ballmer.
"Maybe it's time for new leadership," said analyst Matt Rosoff, an independent research company Directions on Microsoft. "They have really struggled to get traction in the area of mobile phones for some time."
Last quarter, the division contributed 11% of Microsoft sales and 3% of operating profit. The unit has successfully developed the Xbox, but so far failed to impact with the Zune digital music player and is losing ground in the arena of smartphones. Only 10% of smartphones sold in the United States in the first quarter running Windows, according to market research firm NPD Group. Meanwhile, Apple had 21% stake, Google 28% and Research in Motion, maker of the BlackBerry, with 36%. Across the globe, Android surpassed Windows as the fourth most used smartphone platform during the first three months of the year, according to research firm Gartner, behind Apple, RIM and Symbian, Nokia.
Recognizing the problems, Microsoft announced earlier this year a completely new operating system for mobile phones, called Windows 7 Phone, which should reach the market by year's end. If mobile phones equipped with this system will not take off, says Rosoff, Microsoft may start looking for acquisitions in the mobile segment
In this context, analysis has also attributed Microsoft inability to capitalize on new products particularly those in the wireless space and, yesterday, historically Apple’s market value surpassed for the first time Microsoft’s. In numbers, more precisely, Microsoft's market value declined to $219 billion at the close of Wall Street trading yesterday, down from $556 billion in January 2000 when Ballmer took over the helm from Bill Gates. Meanwhile, Apple's market value was $221 billion at the close of trading Wednesday, up from $15.6 billion in the same time frame. Nevertheless, Ballmer said Microsoft is focused on launching new products and increasing profitability. Thus, Microsoft’s challenge is to change market's first impression that the new organizational structure will not be able to innovate in wireless space by bringing new valued added products and/or by shopping in the mobile segment.
http://www.fiercewireless.com/story/microsoft-ceo-downplays-apples-lead-market-value/2010-05-27
http://venturebeat.com/2010/05/26/apple-now-at-99-9-of-microsofts-market-value/
http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=MSFT
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment