You're a software company. Get out of the hardware business and start making Android software.
If you need a ton of power, you need a workstation not an ultrabook/tablet hybrid. The rumored changes should allow for better battery life, cooler operation, and probably a minimal (if any) impact on performance on tasks that suit the form factor.
I strongly agree. The same amounts to laptops, at least for me.
I have a Macbook Pro, 13", 2.9 GHz Core i7, non-retina. About 99% of the time my laptop is less than 10% utilized. Even when I run VMware/Windows it barely breaks a sweat.
I got the i7 because it was only $100 more once I got the model with 8 GB RAM. Wasted money.
Phones, laptops, tablets --> same thing. Mostly used to consume content, probably less than 10% of users need a high end processor.
As you say, better battery life and cooler operation are the things that should be optimized for, especially with phones and tablets. I concede that a decent minority of users can make a good argument for owning a powerful laptop.
It's probably too early to call it either way; the Xbox division took something like 6-7 years to start posting profit. Surface was (still is?) in the negative, but it's been gaining traction lately and if it isn't already profitable it will be soon.
Surface in particular is a good example of what they should do in hardware: make something that nobody else really does and do a damn good job of it. There are other Windows tablets, but nothing comes close to Surface in terms of build quality and form factor. They tried to differentiate the Xbox One with Kinect, which didn't work, but points to that being their strategy. With Windows Phone though, I'm not really seeing it. The main draw is the OS (which isn't much of a draw because of the low marketshare -> no apps feedback cycle).
That's why they have Surface, Windows Phone/Mobile (and did the Nokia deal), and Signature Edition now. They don't need to do any of that if the OEM partner model were working. It wasn't, and it isn't. Microsoft's decision to go vertical is very sensible. It isn't working because they're too late. One of the basic principles of running a megacorporation is that you shouldn't be in markets where you cannot be #1 or #2. Microsoft is a very distant #3 or #4 in mobile. Instead of trying to break in years after the top players were established, they should have admitted failure and gone off to find the next big thing where they could be #1 or #2. But that kind of courage is very rare in large corporations and certainly no one in the Microsoft leadership team has anything like it. So they'll thrash around for a while until either they hit on the next big thing themselves or, more likely, fail to do so and repeat this process a couple more times before finally going under.
Sure things didn't work out so well for end users, but again, Microsoft benefited greatly from this arrangement.
I think Microsoft wants to go vertical because they see how well it worked for Apple. But Microsoft is no Apple. Apple started with hardware and have always focused on hardware. Their software and services exist to drive hardware sales. That's never been Microsoft's strategy. If they want to change, that's great. But my original comment stands. They have been very very successful partnering and not being an OEM.
That kind of misses the point, doesn't it? The consumer perception of what the Windows experience is is degraded by their partners, leading people to see it as shoddy and less reputable than it is. This happens to basically any business that pursues this (the world is full of unscrupulous satellite TV dealers who will falsely represent the channels you're getting so you sign a contract, then tell you to call the company once you're actually locked in, for instance).
There are benefits too, for sure.
Now there is a very real risk that end users use closed hardware running Android or iOS, while servers run Linux serving web applications.
Looks like they got that covered.
And very few people own a phone made directly by Google or a company owned by Google. Lumia is a Nokia Phone which is owned by Microsoft.
That is exactly like saying "The New York Times is an advertising company. Newspaper and website are just delivery mechanisms for the ads (which brings in the money)"
Software/AI is a Google core-competency, calling it a "mechanism for ads" seems to be under-selling them, especially when a huge chunk of the software they produce has nothing to do with ad-delivery