Microsoft Signals That It Is Not Abandoning Hardware

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In the wake of its embarrassing, multi-billion dollar writedown and associated spate of firings, Microsoft is working to signal that it is not done with hardware.

There are three recent data points worth our time: Microsoft saying this morning that Lumia handsets running Windows 10 are coming, that the firm is expanding sales channels for its Surface line of tablet-hybrids, and that the company is ramping production of its Surface Hub wall computers.

Let’s tackle each in reverse order of screen size. So, phones first.

At its partner conference, which is currently underway, Microsoft’s Terry Myerson said the following: “Last week we announced a focusing on our Lumia lineup, but let me be clear: soon you will see premium new Lumias designed for Windows 10.”

That’s clear enough, and not surprising. Microsoft cannot afford to stop making phones — that would completely extinguish Windows Phone itself, given that Microsoft manufactures nearly every Windows Phone handset that is sold. Until the company can garner new partners, and those partners can launch new phones, Microsoft is stuck in the phone game.

Moving to Surface, Mary Jo Foley has the good stuff:

Microsoft will expand its current list of a “couple hundred” authorized Surface device distributors to a few thousand worldwide […] Any partner can sign up for the expanded Surface distribution program, though each distributor will have qualifications based on volume.

In short, ahead of what people are generally presuming will be the Surface Pro 4, Microsoft is ramping its partner network up to get the device sold. Hardly a retrench, let alone a surrender.

And finally, Surface Hub, everyone’s favorite original Surface stapled to your wall, appears to be selling well. Paul Thurrott has the quote: “Microsoft says that demand [for the Surface Hub] is such that it will now increase manufacturing capacity in order to make more units available for launch.” Given that the Surface Hub can run you a flat $10,000, that means something.

(I’m ignoring Xbox for now, as I think that we can all agree it’s in a separate category from the above-devices.)

So, that’s three for three, in a way, though it’s clear that the company’s phone work is on life support. We’ll know more at earnings.