Of the top three Windows OEMs -- Lenovo, HP and Dell as ranked by both IDC and Gartner for the September quarter -- only HP has much interest in the consumer PC market, argued Bajarin. "Should HP flounder in their PC business, that could have a major impact on Microsoft -- HP may not be able to deliver the volume shipments of PCs that would help drive their Windows franchise to a broader consumer audience," he wrote.
Bajarin's argument rested on that assumption: That the number of Windows OEMs would shrink; that those who remain would lose interest in the cut-throat consumer business; and that Microsoft might have to intercede with its own hardware division, ramping up choices and sales to keep Windows in front of consumers.
"What Microsoft is doing is learning how to create great hardware, which will serve as a potential back-up strategy for them should more of their OEM partners flounder," Bajarin said, adding that the Surface was more than a mere reference and/or flagship labor, but one that was "very strategic" to the Redmond, Wash. firm.
O'Donnell agreed. "If Microsoft does pick up all the slack from all the smaller guys, then that becomes a very interesting, and probably very realistic, scenario," he opined during the podcast.
More Personal Computing could also be the foundation of a spin-off, a move that has surfaced -- no pun intended -- from time to time, from both industry and financial analysts. For example, Ben Thompson, an independent analyst who operates Stratechery.com, has suggested that it would be in Microsoft's best interest if it spun off Windows and hardware.
Thompson's premise: That Microsoft's historical blueprint was to champion Windows at the expense of its other businesses, primarily Office (the so-called Windows strategy tax). Although Nadella has backed away from that mindset -- starting with the 2014 debut of Office on iOS, facilitated by the growth of its cloud operations -- Thompson has interpreted some of the company's recent comments as showing signs of reverting to the Windows-first mentality.
In his eyes, the separation of Windows -- and its hardware -- from the rest of the company with the More Personal Computing unit is a good thing, as long as the wall holds. "To reiterate, my support for the Surface is predicated on Microsoft effectively operating as two different companies -- Windows on one side, and Office and the Cloud on the other," Thompson wrote on Friday (subscription required). "And ultimately, I still wouldn't mind if the company just split up officially."
If it came to that, More Personal Computing is positioned to be that independent entity, not only because it's been segregated from the rest of Microsoft's revenue by reporting segment, but also because it has, for the first time, an executive in charge of both Windows and all devices, from smartphones to tablets to laptops, in Terry Myerson.
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