Microsoft is launching a standalone version of its Kinect voice- and motion-sensor for the Xbox One.
The standalone Kinect sensor will sell for $149, bundled with Dance Central Spotlight, starting Oct. 7.
When Microsoft launched Xbox One in November, it came bundled with the Kinect voice- and motion-sensor, and sold for $500.
That may not have been the wisest move. The $500 price came in at $100 more than Sony's PlayStation 4, which also launched in November.
Sony's gaming console has been outselling the Xbox One for months now.
In April, Microsoft said it had sold 5 million Xbox One consoles to retailers, while Sony said it had sold 7 million PlayStation 4 units to consumers.
Earlier this month, Sony said it had sold 10 million PlayStation 4 consoles to consumers. Microsoft has not released an Xbox One sales figure since April.
Microsoft has already made a series of price cuts, including bundling top games and Xbox Live Gold membership into the price of its console.
Then in June, Microsoft unbundled the console and sensor, selling the Xbox One without Kinect for $399. Sales of Xbox One more than doubled in the U.S. after Microsoft unbundled that console and sensor, the company said in July.
The Kinect sensors allows users to control their Xbox One consoles and play games using voice and gesture commands.
Former Microsoft CEO Steve Ballmer is stepping down from Microsoft's board.
Here's the text of the letters from Ballmer and from Nadella:
As I approach the six month mark of my retirement and your appointment as CEO, I have been reflecting on my life, my ongoing ownership of Microsoft stock, and my involvement with the company. I have reached some conclusions and wanted to share them with you. I know August is the key month during which the company starts to prepare the proxy statement for the next shareholders’ meeting, and so these thoughts are probably timely for that too.
First, Microsoft has been my life’s work and I am proud of that and excited by what I see in front of the company and this leadership team. There are challenges ahead but the opportunities are even larger. No company in the world has the mix of software skills, cloud skills, and hardware skills we have assembled. We draw talent as well as any company in the world. We have the profitability to invest in long-term opportunities and still deliver superior shorter term performance. You’re off to a bold and exciting start.
Microsoft will need to be bold and make big bets to succeed in this new environment. Writing great software is a tremendous accomplishment and selling software has been a fabulous business. In the mobile-first, cloud-first world, software development is a key skill, but success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues. Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has. Our board must also support and encourage that fearlessness for shareholders to get the best performance from Microsoft. You must drive that.
I had not spent any time really contemplating my post-Microsoft life until my last day with the company. In the six months since leaving, I have become very busy. I see a combination of the Clippers, civic contribution, teaching and study taking a lot of time. I have confidence in our approach of mobile-first, cloud-first, and in our primary innovation emphasis on platforms and productivity and the building of capability in devices and services as core business drivers. I hold more Microsoft shares than anyone other than index funds and love the mix of profits, investments and dividends returned in our stock. I expect to continue holding that position for the foreseeable future.
Given my confidence and the multitude of new commitments I am taking on now, I think it would be impractical for me to continue to serve on the board, and it is best for me to move off. The fall will be hectic between teaching a new class and the start of the NBA season so my departure from the board is effective immediately.
I bleed Microsoft — have for 34 years and I always will. I continue to love discussing the company’s future. I love trying new products and sending feedback. I love reading about what is going on at the company. Count on me to keep ideas and inputs flowing. The company will move to higher heights. I will be proud, and I will benefit through my share ownership. I promise to support and encourage boldness by management in my role as a shareholder in any way I can.
All the best,
Satya Nadella response to Steve Ballmer:
First, thank you for all of your support during my transition this year and for the past 34 years. It’s been a great privilege to have worked with you and learned from you. Under your leadership, we created an incredible foundation that we continue to build on — and Microsoft will thrive in the mobile-first, cloud-first world.
While your insights and leadership will be greatly missed as part of the board, I understand and support your decision.
As you embark on your new journey, I am sure that you will bring the same boldness, passion and impact to your new endeavors that you brought to Microsoft, and we wish you incredible success. I also look forward to partnering with you as a shareholder.
On behalf of all of Microsoft and the Board of Directors, thank you.
[Update: Here's our story, running in the print edition of The Seattle Times on Aug. 20, 2014.]
HTC is releasing a Windows Phone version of its flagship HTC One phone.
The Windows Phone version, called HTC One (M8) for Windows, comes with a 5-inch 1080p HD display, Qualcomm Snapdragon 801 quad-core 2.3GHz processor, and 32GB of storage and microSD card slot, and ships with Windows Phone 8.1 Update installed.
It will run on Verizon's 4G LTE network and is available for online order starting today and in stores tomorrow.
HTC has had success with the Android version of the HTC One.
But both Windows Phone and HTC have a lot of catching up to do.
Windows Phone’s worldwide market share declined in the second quarter this year to 2.5 percent, down from 3.4 percent a year ago, according to research firm IDC.
And HTC is no longer among the world's top smartphone makers after 10 straight quarters of shipment declines, according to research firm Strategy Analytics.
Some Microsoft Azure customers are still experiencing connectivity issues after an outage that began shortly Monday before 11 a.m. Pacific Time.
Microsoft said in its Azure status dashboard that "starting at 18 Aug 2014 17:49 UTC, a small subset of customers are experiencing connectivity issues to some Azure Services which may include Cloud Services, Virtual Machines, Websites, Automation, Service Bus, Backup, Site Recovery, HDInsight, Mobile Services, StorSimple and possible other Azure Services in multiple regions. Recovery continues underway across affected regions. Customers in many regions began to experience service restoration."
Some Azure users had experienced other problems earlier in August, including full service interruptions for Visual Studio Online customers in multiple regions on on Aug. 14.
Microsoft issued a statement, saying the company is "working quickly to address the issue."
Former Microsoft CEO and current LA Clippers owner Steve Ballmer got in on the Ice Bucket Challenge to raise awareness for ALS.
Ballmer said in a tweet that he was nominated by Spencer Hawes, center for the LA Clippers (and a former UW Huskies and Seattle Prep player).
In turn, after dumping a bowl of ice water over his head, Ballmer nominated Rick Neuheisel, football analyst and former coach for the UW and UCLA football teams; Doc Rivers, LA Clippers coach; and someone whose name sounds like "Hal Wright." (I have asked Microsoft if they can clarify who Hal Wright is and will post any response.)
Ballmer, who remains a director on Microsoft's board, is among the list of tech titans who took part in the Ice Bucket Challenge to raise awareness and dollars for ALS research and services. Those tech industry leaders include Microsoft co-founder Bill Gates, Microsoft CEO Satya Nadella, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos and Google co-founders Larry Page and Sergey Brin.
ALS — amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease — is a neuromuscular disease that affects nerve cells in the brain and spinal cord, causing those with the disease to progressively lose control of their muscle movements. It often leads to paralysis and death within two to five years of diagnosis, according to the ALS Association. There is no known cure.
On Friday, the ALS Association said it had received $9.5 million in donations from July 29 to Aug. 15, compared to $1.6 million during the same time period last year. The association added that the contributions have come from existing donors and 184,812 new donors.
Bill Gates is the latest tech titan to take up the Ice Bucket Challenge to raise awareness for ALS.
Gates accepted the challenge, issued Wednesday, by Facebook CEO Mark Zuckerberg. Gates drenched himself in ice water in the most engineery sort of way (see video above). He then challenged Tesla Motors and SpaceX CEO Elon Musk, entertainment host Ryan Seacrest and TED curator Chris Anderson.
In addition to Gates and Zuckerberg, other tech titans -- including Microsoft CEO Satya Nadella, Apple CEO Tim Cook, and Google co-founders Larry Page and Sergey Brin -- have joined a spate of celebrities in taking part in this summer's viral video stunt that has raised millions for ALS research.
A Microsoft spokeswoman said Gates also made a personal donation to the cause, though she didn't specify the amount.
ALS — amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease — is a neuromuscular disease that affects nerve cells in the brain and spinal cord, causing those with the disease to progressively lose control of their muscle movements. It often leads to paralysis and death within two to five years of diagnosis, according to the ALS Association. There is no known cure.
The Ice Bucket Challenge was started by the family of Pete Frates, a former Division I baseball player who was diagnosed with ALS two years ago, according to a Bloomberg report.
As of Friday, the ALS Association said it had received $9.5 million in donations, compared to $1.6 million during the same time period last year (July 29 to August 15), adding that the contributions have come from existing donors and 184,812 new donors.
Microsoft CEO Satya Nadella is among the latest to take part in the Ice Bucket Challenge to raise awareness for ALS.
ALS -- amyotrophic lateral sclerosis, also known as Lou Gehrig's disease -- is a neuromuscular disease that affects nerve cells in the brain and spinal cord, causing those with the disease to progressively lose control of their muscle movements. It often leads to paralysis and death within two to five years of diagnosis, according to the ALS Association. There is no known cure.
Nadella's participation in the Ice Bucket drenching was spurred by a challenge from former NFL player Steve Gleason, a former safety with the New Orleans Saints and a former football star at Washington State University. Gleason, who has ALS and uses a wheelchair, has been working with Microsoft for a few years now, using the company's Surface tablet, along with Tobii eye-tracking technology, to communicate. The Surface tablet turns what he "types" on the tablet with his eye movements into speech.
Recently, Gleason worked with a team from Microsoft during the company's first global hackathon. The team, called Ability Eye Gaze, worked with Gleason to develop ways to keep his Surface always on, to improve the speed at which his eye movements turn what he "types" into speech, and to allow him to move his wheelchair using a joystick guided by his eyes.
That team was announced Wednesday as the grand prize winner of Microsoft's company-wide hackathon, in which Microsoft employees worldwide worked on some 2,700 different projects.
The Ability Eye Gaze team also got the chance Wednesday to dump ice water on Nadella, who, after his drenching, challenged Amazon.com CEO Jeff Bezos and Google CEO Larry Page to take part in their own Ice Bucket Challenges.
[Update Aug. 14: The ALS Association on Thursday thanked those who have accepted the Ice Bucket Challenge so far, noting that the association has received $7.6 million in donations from July 29 to Aug. 14, compared to $1.4 million during the same time period last year.]
Research firm IDC's latest figures shows Windows Phone's worldwide market share declined in the second quarter this year to 2.5 percent, down from 3.4 percent in the year-ago quarter.
Shipment volumes for Windows Phone were down, too, to 7.4 million in the second quarter this year, down from 8.2 million last year. IDC notes, though, that this year's second quarter volume was up slightly from the previous quarter.
The overall number of smartphone shipments rose 25 percent year-over-year to a total of 301.3 million units shipped in the second quarter this year. Android (with 84.7 percent market share, up from 79.6 percent last year) and iOS (with 11.7 percent market share, down from 13 percent last year) together made up 96.4 percent of the phones shipped
Here's IDC's chart:
Wi-Fi-enabled smart plugs and outlets that let users control home electronics from their smartphones, and fully connected electronic water heaters are among the ideas from 10 startups that have been chosen to participate in the first Microsoft Ventures Accelerator program focusing on home automation.
The program, which will be held August through December on Microsoft's Redmond campus, is geared toward helping "a new generation of companies create smarter and safer homes," Steven Guggenheimer, Microsoft's corporate vice president of developer experience and evangelism, said in a blog post.
Home automation is a growing market, and the ideas behind it -- everything in the home being connected to the Internet; devices embedded all around us that can sense what we need and respond to it -- are part of what Microsoft CEO Satya Nadella means when he talks about a world in which "ambient intelligence" and "ubiquitous computing" are prevalent.
According to the blog post, the 10 startups, chosen from 400 applicants, are:
* Chai Energy, which helps users understand their energy usage and figure out ways to save energy
* Heatworks, which develops fully electronic tankless water heaters
* Neura, which connects intelligent devices and helps them adapt to how people use their devices
* Reemo, a wrist-worn device that uses gestures to control supported home-automation systems and some conventional appliances
* Plum, which develops Wi-Fi enabled lightpads, smart plugs and outlets that let users control electronics from wall switches or smartphones
* Red Balloon Security, which develops host-based defenses for embedded devices
* Scanalytics, which develops sensors for understanding people's behavior in physical spaces and tools to manage devices in physical environments
* Sentri, an HD camera with built-in sensors that track a home's vital stats and trends, allowing users to track temperature, humidity, air quality, weather and more.
* Wallflowr, which is developing technology that can help reduce risks of accidental fires caused by ranges, stoves and ovens
The home-automation Accelerator is being held in partnership with American Family Insurance. Microsoft is providing space for the Accelerator, along with mentorship and networking opportunities. American Family Insurance is offering a minimum, optional $25,000 equity investment in each startup accepted into the program. Mentors and advisers include folks from Madrona Venture Group, Ignition Partners and Starbucks, among others.
Microsoft Ventures, the overarching umbrella under which the company groups its efforts aimed at fostering tech startups, includes the Accelerator program, in which select startups are chosen for a 3- to 6-month immersive experience; the BizSpark program, which provides tools, technology and mentorship to startups in communities worldwide; and the Seed Fund, which provides investments to early-stage companies. Microsoft formed the umbrella group in June 2013, though some of its programs predate the naming of the Ventures group.
Brian Jorgenson, a former Microsoft senior manager, was sentenced Friday to two years in prison, and three years of supervised release after that, for insider trading.
Jorgenson, 32, of Lynnwood, who worked in Microsoft's treasury group, pleaded guilty earlier this year. He admitted that he recruited a friend and former co-worker at an asset management company to make stock trades based on inside information.
That friend and former co-worker, Sean Stokke, 28, of Seattle, was sentenced last month to 18 months in prison.
Jorgenson told The Seattle Times last December that he had tipped a friend to nonpublic, proprietary Microsoft financial information three times in the past 18 months, allowing the friend to make money in the stock market. He had estimated at the time that his friend made more than $200,000, although he didn't know exactly how much money was made since he didn’t have direct access to his friend’s trading accounts. In exchange, Jorgenson said, his friend gave him about $40,000.
According to the U.S. Attorney's Office for the Western District of Washington, the two men made $415,000 total from the three trades.
They made $184,000 in profit from Jorgenson's early knowledge of Microsoft's investment in Barnes and Noble; $218,000 from Microsoft's failure to meet earnings estimates in the fourth quarter of fiscal year 2013; and $13,000 from Microsoft's increased earnings per share for the first quarter of fiscal 2014, according to the U.S. Attorney's Office's news release.
At the sentencing hearing, Jorgenson told the court: “I cheated. I tried to take a shortcut for my own financial gain…. I persuaded myself it was a gray area, when it clearly was black and white," according to the news release.
"Motivated by greed, this defendant traded on his employer’s confidential information to line his own pocket,” U.S. Attorney Jenny Durkan said in the release. “Western Washington abounds in publicly traded companies with thousands of insiders who have daily access to market moving information. The sentence in this case should serve as a warning to others who might be tempted to engage in this conduct.”
Microsoft sent a statement, saying: "Our company has zero tolerance for insider trading. We helped the government with its investigation and terminated the employee."
I have asked Jorgenson's attorney for comment and will post any response.
Microsoft has hired Margaret (Peggy) Johnson to head its global business development efforts.
In the newly created position of executive vice president of business development, Johnson joins Microsoft's top-level executive team and will report directly to CEO Satya Nadella.
She will be responsible for "driving strategic business deals and partnerships across various industries with key customers, strategic innovation partners, OEMs, key accounts, third-party publishers and industry influencers," according to a Microsoft news release.
Johnson most recently served as an executive vice president, and president of global market development, at Qualcomm. In that role, she was responsible for commercializing new business opportunities; developing strategic relationships; and overseeing Qualcomm Labs, an incubator for new businesses and products and for exploring new market segments for Qualcomm's technologies, according to Microsoft.
"Peggy shares our worldview and knows what it takes to drive new growth in mobility and the cloud,” Nadella said in the news release. “Her experience uniquely positions her to lead Microsoft’s business development efforts, and she will be a great addition to our senior leadership team.”
Johnson said in the release that she was "thrilled to be joining Microsoft at such a pivotal time for the company and the industry. The opportunity to build new and surprising partnerships to help Microsoft succeed in a mobile-first, cloud-first world is truly exciting, and I look forward to leading these efforts.”
Johnson holds a bachelor of science in electrical engineering from San Diego State University. She represents the United States on the Asia-Pacific Economic Cooperation Business Advisory Council and serves as a board member for Live Nation Entertainment, a live entertainment company.
She will be "relocating to the Seattle area with her husband and youngest of three children, four dogs and one goldfish," according to her Microsoft bio.
Most recently, business development efforts had been overseen on an interim basis by Eric Rudder, Microsoft's executive vice president of advanced strategy. Rudder had temporarily taken on the roles of overseeing business development, as well as overseeing developer evangelism and experience, after Microsoft senior executive Tony Bates left the company earlier this year.
Johnson will now lead business development efforts, while the whole developer evangelism and experience team will move to the sales and marketing organization overseen by Chief Operating Officer Kevin Turner.
Rudder will continue to be responsible for technology initiatives for all Microsoft devices and services.
A 53-year-old Maple Valley woman is suing Microsoft for gender, race and age discrimination.
Nancy Williams said in her lawsuit, filed Monday in King County Superior Court, that she was subjected to discrimination and differential treatment, as well as a hostile work environment based on her gender, race (Hispanic) and age.
Williams, who is currently on medical leave from her job as a software test manager in Microsoft Azure, has been a full-time Microsoft employee since 1996. She joined the Azure group in 2010.
Williams contends in her suit that the workplace environment at Azure, which was dominated by male engineers and a “substantial percentage of whom were foreign born and of East Indian heritage,” was not supportive of women employees. Microsoft was aware of that but put up with it because Azure was a vital part of the company’s business strategy, the lawsuit alleges.
Microsoft said in a statement that the company “provides an environment where all employees have the opportunity to be successful. We take these claims seriously and will address them with the court.”
According to the lawsuit, beginning in March 2012, Williams began reporting to a new boss — a foreign-born man of East Indian descent, who was not named as a defendant in the lawsuit.
Williams’ boss no longer works at Microsoft, though his departure was unrelated to this matter, according to sources close to the situation. He could not immediately be reached for comment.
Williams contends that her boss ignored her during meetings, excluded her from important internal communications related to Azure, was dismissive of her suggestions, and blamed her for situations that were not her responsibility, while treating his male subordinates favorably, according to the lawsuit.
She also questioned her boss, and her boss’s supervisor — both of whom are of East Indian descent — over their awarding of a contract to an Indian company over other companies, the suit says.
In a meeting behind closed doors in her boss’s office in January 2013, her boss “approached Williams, who was seated, and stood over her in very close proximity,” requiring Williams to repeat several times: “You are my manager, I will do as you say,” the lawsuit contends.
Williams said she reported this and other incidents to Microsoft’s human resources department, but was cautioned against filing a formal complaint. After she did so anyway, the investigation into her case lagged while she was on a two-month sabbatical, she said in the suit.
She also said she spoke of her boss’s behavior to his supervisors — also of East Indian descent, according to the lawsuit — but either nothing was done or she was told her complaints would lead to negative discussions about her performance.
Upon returning from her sabbatical, her boss gave her a very low rating in her performance review, and waved his fists in her face, the lawsuit says.
Williams says she suffered panic attacks and her health began to erode.
She is seeking double the amount of her lost salary and bonus and stock awards incurred to date and which will accrue in the future, unspecified additional damages, and costs and attorney’s fees.
She is also asking the court to order an independent audit of Microsoft’s human resources department’s practices and require that every Azure employee get training on discrimination, hostile work environments and retaliation.
After months of competition and a field that initially numbered 14,000 teams, one student team emerged victorious today in the championship round of Microsoft's Imagine Cup.
The company global student technology competition, now in its 12th year, has teams of college and high-school students from around the world competing to create technological solutions that address everything from health issues to gaming to innovation.
Eyenaemia, a team from Australia, took home the top prize this year. The prize includes the Imagine Cup trophy, a $50,000 prize, a mentoring session with Microsoft co-founder Bill Gates, and attendance at a technology and entrepreneurship boot camp.
Team Eyenaemia -- composed of Jarrel Seah and Jennifer Tang -- won for its phone app that helps people identify their risk for anemia. The user takes a selfie of his or her eye, and the app analyzes the conjunctiva to make a risk assessment. The conjunctiva is the transparent membrane that lines the eyelid and covers the white surface of the eye.
Seah and Tang are both 22-year-old medical students at Monash University in Melbourne.
"I'm very, very excited and still kind of shocked," Tang said immediately after her team's win was announced this morning at the Washington State Convention Center, where the Imagine Cup World Championship ceremony was held.
Tang said she and her teammate would use the prize money to expand the research that feeds into the Eyenaemia app. The team currently has research underway in two hospitals in Melbourne.
She hasn't had time yet, she said, to think about what she'd like to ask Gates when she and her teammate meet with him.
This was the first year the Imagine Cup Finals -- and the Imagine Cup World Championship ceremony -- have been held on Microsoft's home turf.
From the original field of 14,000 teams, 34 teams representing 34 countries entered the finals, which were held earlier this week. Sixteen judges narrowed those 34 teams down to nine for today's championship round.
From those nine, a winner was chosen in each of three categories: world citizenship, innovation and games. (Eyenaemia took first in the world citizenship category. A team from New Zealand called Estimeet, which created an app that shows a user how far away her friends are from a designated meeting location, won in the innovation category. Brainy Studio, a team from Russia, won the games category for TurnOn, a side-scroller game about a small electrical spark trying to light up a city.)
Each of those three category winners then competed for the championship title.
They faced three judges in a lightning round to determine the final winner: Satya Nadella, Microsoft's CEO; Hadi Partovi, co-founder of Code.org; and Erik Martin, general manager of Reddit. The contestants had 90 seconds to the judges' questions, which ranged from what inspired their ideas, to what their business plans are to market their apps.
“We are the original student development company and the original tools company," Nadella told the competitor and audience of several thousand.
In the end, the judges were unanimous in their decision to award Eyenaemia the top prize, citing its elegant and simple solution to a widespread health issue, and the fact that the team members already had a plan for how to distribute their app.
Microsoft filed a lawsuit Friday against Samsung, seeking to enforce an agreement in which the hardware manufacturer pays royalties to Microsoft for each Android phone it produces.
Microsoft contends that certain features in the Android operating system uses patented Microsoft technology. The software giant has reached agreements with a number of hardware manufacturers in which the manufacturers pay Microsoft royalties for each Android device they produce.
Samsung was one of those companies after it reached a cross-licensing agreement with Microsoft in 2011 that gave Samsung the right to use certain patented Microsoft technologies in its Android smartphones and tablets, and gave Microsoft the right to use certain patented Samsung technology in Microsoft's products.
Initially, Samsung made the royalty payments.
But last year, Samsung, which pays Microsoft once a year, was late with its payment and did not pay Microsoft interest for those late months.
And Microsoft is concerned Samsung will not make its payments in the future, contending that Samsung is using Microsoft's acquisition of Nokia’s phone business as “an excuse to breach its contract,” David Howard, a Microsoft corporate vice president and deputy general counsel, said in a blog post.
"Upon hearing the formal announcement of Microsoft's intended Nokia acquisition, which had been the subject of industry press speculation for more than two years, Samsung claimed that Microsoft's agreement to acquire Nokia's Devices & Services Business had breached the license agreement in various ways," Microsoft contends in the its complaint.
It is unclear on what grounds Samsung is claiming that Microsoft's acquisition of Nokia invalidates Samsung's agreements with Microsoft. (In addition to the licensing agreement, Samsung and Microsoft have a separate agreement under which the two companies collaborate on the development and marketing of Windows Phones.)
Microsoft's complaint says Samsung has asserted "an ever-expanding list of reasons why the announced acquisition allegedly violated" its agreements with Microsoft, but the complaint does not list those reasons.
Microsoft is seeking a court judgment that its acquisition of Nokia's phone business does not invalidate its agreement with Samsung. And it's seeking interest on the late payment.
In addition, Microsoft is seeking a court judgment that the 2011 agreement allowing it to use certain Samsung patented technologies also applies to the Nokia businesses that it acquired. Microsoft says in the complaint that Samsung is claiming that smartphones made or sold by Microsoft after the Nokia acquisition are not covered by the license agreement and that Samsung is therefore entitled to seek damages for patent infringement.
Samsung sent a statement, saying: "We will review the complaint in detail and determine appropriate measures in response."
"We don’t take lightly filing a legal action, especially against a company with which we’ve enjoyed a long and productive partnership," Microsoft's Howard said in his blog post. "Unfortunately, even partners sometimes disagree. After spending months trying to resolve our disagreement, Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract.
Microsoft believes that Samsung originally agreed to make royalty payments back when it was a smaller player in the smartphone market, but is balking now that its smartphone sales have quadrupled since 2011 and is now the world’s largest smartphone manufacturer.
“Consider this: When Samsung entered into the agreement in 2011 it shipped 82 million Android smartphones. Just three years later it shipped 314 million Android smartphones," Howard said in his blog post.
The lawsuit was filed in the U.S. District Court, Southern District of New York.
Microsoft has never disclosed how much it gets in royalties, but Brad Smith, the company's general counsel, said in 2011 that $5 per device "seems like a fair price."
Microsoft has reached Android-related patent licensing agreements with more than 25 companies. It is embroiled in court battles with one company -- Motorola -- over such patents.
Microsoft's (heavily redacted) complaint is here.
John Stanton, a wireless industry pioneer and former top executive at companies including McCaw Cellular and Clearwire, has been appointed to Microsoft's board of directors.
Stanton, who founded the company that eventually led to T-Mobile USA, is currently chairman of private equity fund Trilogy Equity Partners, and Trilogy International Partners, a wireless operator in Central and South America and New Zealand.
"John’s insights into mobility around the globe and his expertise in working with organizations as CEO and as a board member will be invaluable as we transform Microsoft for growth and leadership in the mobile-first, cloud-first world," Microsoft CEO Satya Nadella said in a news release.
Stanton, who resides in the Bellevue area, said in the release that he was "happy to be joining Microsoft at such a pivotal moment in the company’s history."
Stanton served as chief operating officer and vice chairman of McCaw Cellular in the 1980s; as chairman and CEO of Western Wireless from 1992 to 2005; as chairman and CEO of VoiceStream Wireless (which was spun out of Western Wireless and later acquired by Deutsche Telekom, which renamed it T-Mobile USA) from 1995 to 2003, and as director and later chairman of Clearwire from 2008 to 2013.
In the Puget Sound area, Stanton has chaired or co-chaired the Business Partnership for Early Learning, the United Way of King County campaign, the Washington Roundtable, and the Regional Transportation Commission. He currently serves as chairman of Year Up of Puget Sound, and is a trustee of Whitman College and a director of the Seattle Foundation. He also serves on the board of Columbia Sportswear.
Stanton will serve on the compensation committee of Microsoft's board. Stanton's appointment means the board now has 11 directors.
[This story is running in the print edition of The Seattle Times July 30, 2014.]
On Microsoft’s Redmond campus Tuesday, a number of huge white tents lined the soccer field. Inside them, groups of employees, clustered at tables, sat working on their laptops and exchanging ideas.
It was all part of the company’s first global employee hackathon, an event in which thousands of employees from all different divisions of the company work on some 2,700 projects.
The projects cover a huge range. There’s one, for instance, that could help responders working in disaster areas. Another may allow wheelchair users to control their chairs using eye movements to guide a joystick.
The hackathon is part of a weeklong series of events called oneweek, designed to inform employees about, and inspire them to engage in, the company’s vision and strategy for the new fiscal year, which began July 1.
Instead of an annual employee meeting that traditionally took place in the fall, this year’s meeting took place Monday as part of oneweek. Tuesday and Wednesday are dedicated to the live hackathon. (Some teams have worked on their hackathon projects for longer.) And a product fair is scheduled for Wednesday and Thursday on campus.
Oneweek is the latest in a line of changes Satya Nadella has made since becoming Microsoft CEO in February.
He has shifted company priorities from being a “devices and services” company — something pushed by his predecessor — toward being a “productivity and platforms” one.
Earlier this month, Nadella announced Microsoft would be laying off 18,000 workers over the next year — the largest layoff in its history. The company also placed tighter restrictions on its use of vendors and temps.
Oneweek is part of Nadella’s larger attempt to reshape the company’s culture into one that’s more innovative and collaborative.
Since June, employees could register their hackathon projects on a company website or sign up for one already listed. That resulted in people from different divisions, who may not have even known each other, working together.
In one instance, employees from Surface, Xbox, Microsoft Research, the Cloud and Enterprise group, and the Applications and Services group are working together on accessibility issues.
Their work was inspired by former NFL player Steve Gleason, a former safety with the New Orleans Saints and a former football star at Washington State University. Gleason has a neuromuscular disease called amyotrophic lateral sclerosis (ALS) and uses a wheelchair. He communicates using Tobii eye-tracking technology and a Microsoft Surface tablet that turns what he “types” on the tablet with his eye movements into speech.
That technology allows him to speak, listen to music, play videos for his son, tweet, text and do many other things — but only if someone turns on the Surface tablet for him. Gleason requested the capability to turn the tablet on and off with eye-tracking.
“I’ve always believed that until there is a medical cure, technology would be that cure,” Gleason said. “It was important for me, my family and foundation to be able to communicate as efficiently as technology would allow.”
By last Friday, a team called Eye Gaze, which is working with Gleason, had completed the code to allow the Surface to remain always on.
[Continue reading the story here.]
Microsoft announced Sept. 23 as the launch date in China for sales of its Xbox One gaming and entertainment console.
The move follows the lifting of a 13-year ban by the Chinese government on the sale of foreign consoles.
For this venture, Microsoft has partnered with China-based BesTV. Pre-orders for the console, which is being sold starting at ¥3,699 RMB (about $599 USD), are already being taken.
More than 25 developers, including those from Microsoft Studios, EA, Ubisolft and others, are building more than 70 games for Xbox One, Microsoft said.
The company has also expanded the ID@Xbox program to China, allowing Chinese developers to bring their games worldwide, and developers elsewhere to publish their games in China.
Sony has plans to sell its rival PlayStation 4 in China as well.
Windows Phone 8.1 is getting an update that includes live folders -- essentially groupings of live tiles on the Start screen -- while digital voice assistant Cortana is now headed to Windows Phones in China and the UK.
The Windows Phone 8.1 update, which will be available in preview form for developers next week and is expected to roll out to customers in the following months, also includes a live tile for the Windows Phone Store, an apps corner that allows businesses to provide access only to specific apps in a sandboxed mode, and the ability to select and mass forward or delete text messages.
In addition, Cortana is going in beta form to China (where it goes by the nickname "Xiao Na") and the UK, and in alpha form to Canada, India, and Australia.
While Cortana functions similarly in those countries in many ways -- with the ability to set reminders and quiet hours and searching the Internet -- there are differences tailored to each country.
Joe Belfiore, a Microsoft vice president in Microsoft's Operating Systems Group, said in a blog post today:
Our team in Microsoft China developed a number of additional features specifically for China. She has an alternative form which has a different visual appearance, animations, and sounds. She supports Chinese (Mandarin) in voice, text, and speech. She also has specialized suggestions tuned specifically for people living in China, like air quality information in weather cards, information about driving restrictions, and the ability to track local TV shows and celebrities. She can look up English words in the Bing Dictionary for people looking to brush up on their English.
Of course fitting a local-market isn’t specific to China! For the UK, Cortana has been tailored to support UK spellings and pronunciations and Bing-provided local data on sports teams (for the EPL), the London Stock Exchange, commuter conditions, and more. The voice and accent is, of course, local, and Cortana’s personality in the UK has also been tweaked to be more locally relevant.
Some improvements for Cortana in the U.S. are also in the update, including the ability to call up Cortana hands-free for phones connected to car Bluetooth kits that are integrated with the user's contact list, and "a number of neat additions to her personality (try asking “do an impersonation” and see what happens)," Belfiore wrote.
David Sacks, co-founder of business social-networking company Yammer, which was acquired by Microsoft in 2012, is leaving Microsoft.
Sacks tweeted today:
Microsoft sent a statement, saying:
We thank David for his commitment to Yammer and Microsoft and wish him the best in his future endeavors. Yammer has grown tremendously since the acquisition in 2012, and is now an integral part of Office 365 and used by more than 500,000 organizations. As part of our long-term plan, David has played an instrumental role over the past two years in building a strong leadership team to set a solid direction for Yammer as part of Microsoft Office 365 and our vision for enterprise social.
ZDNet's Mary Jo Foley noted that Sacks' departure comes as Microsoft is moving Yammer into the Office 365 and Outlook development teams, with a member from those Microsoft teams moving south to head the Yammer engineering team in San Francisco.
Microsoft had purchased Yammer for $1.2 billion in 2012. At the time, Microsoft was excited about Yammer's potential in business social networking, and CEO Steve Ballmer was especially enthused about Yammer's "viral adoption method" by which it grew its user base.
For a while, Microsoft regularly touted the growth in Yammer's number of registered users: From 5 million at the time of the acquisition to 8 million a year later in June 2013. Microsoft has not said how many registered Yammer users there currently are.
Microsoft beat Wall Street expectations for revenue but fell short in earnings per share in its fiscal fourth quarter earnings, reported today.
For the quarter ended June 30, Microsoft reported revenue of $23.38 billion, profit (net income) of $4.61 billion and earnings per share of 55 cents.
Analysts were expecting Microsoft to report for the quarter revenue of $23.01 billion with earnings per share of 60 cents and profit of $5.04 billion, according to a Bloomberg survey of analysts.
For the year-ago quarter, Microsoft posted revenue of $19.9 billion with earnings per share of 59 cents and profit (net income) of $4.97 billion. (Those figures reflected a $900 million write-down of Surface RT inventory related to a price-reduction offer for those devices. Adjusted for that write-down, Microsoft said earnings per share would have been 66 cents.)
Chris Suh, Microsoft's general manager of investor relations, said the lower-than-predicted earnings per share reflected the fact that Microsoft had not offered guidance on the impact its acquistion of Nokia's phone business, which closed in April. (Microsoft had not offered the guidance, he said, because "we didn’t have a point of view on the business that I would consider to be reliable enough for us to stand behind at that point.)
Suh said that taking into account the ongoing operations of the acquired Nokia business, plus some items including a catch-up on prior-year taxes that was recognized in the quarter, earnings per share for the quarter representing core Microsoft earnings growth would have been 66 cents.
For fiscal year 2014, Microsoft reported revenue of $86.83 billion, profit (net income) of $22.07 billion and earnings per share of $2.63.
Analysts were expecting Microsoft to report revenue of $86.46 billion with earnings per share of $2.69 on profit of $22.54 billion, according to a Bloomberg survey of analysts.
For the fiscal year 2013, Microsoft had posted revenue of $77.85 billion, earnings per share of $2.58 and profit of $21.86 billion.
During the earnings conference call, which will be webcast starting at 2:30 p.m., CEO Satya Nadella and CFO Amy Hood are expected to talk about the company's restructuring, following its acquisition of Nokia’s phone business, last week's announcement of 18,000 layoffs for the coming year, and tighter restrictions starting this month on the use of vendors and temps.
Here’s how the various groups within each of Microsoft’s two broad segments performed in the fourth quarter, according to Microsoft's news release:
Devices & Consumer:
Overall, this segment reported revenue of $10 billion, up 42 percent.
• Licensing (Licenses from Windows device manufacturers, consumer Windows, Windows Phone, Office consumer, and patents): $4.69 billion, up 9 percent.
Licensing revenue from Windows device manufacturers grew 3 percent.
The increase in revenue is also due to recognition of $382 million from the conclusion of the commercial agreement with Nokia.
The increases were offset by a decline in royalty revenue.
• Computing & Gaming Hardware (Surface, Xbox and Xbox Live subscriptions, second- and third-party video games, and peripherals. This category was previously called “Hardware.”): $1.44 billion revenue, up 23 percent.
Surface revenue was $409 million. Interestingly, Microsoft noted that the cost of revenue included inventory adjustments not just due to new generation devices (such as Surface Pro 3 going on the market) but also "a decision to not ship a new form factor" -- likely the much-rumored-about Surface Mini.)
Xbox platform revenue increased $104 million, or 14 percent, driven largely by console revenue. The company sold 1.1 million consoles to retailers.
• Phone Hardware (Windows Phone. This is a new category this quarter, established since the closing of the Nokia acquisition in April.): $1.99 billion.
The cost of the $1.99 billion revenue, though, was $1.93 billion, which includes amortization and the "impact of decisions to rationalize our device portfolio.
Following Microsoft's acquisition of Nokia's phone business, Microsoft sold 5.8 million Lumia smartphones and 30.3 million non-Lumia phones. Lower-priced phones drove a majority of the Lumia sales.
• Other (Bing and MSN, Office 365 Home and Office 365 Personal, first-party video games, marketplaces such as Windows Store, Windows Phone Store and Xbox Live transactions, as well as Microsoft retail stores): $1.88 billion, up 20 percent.
Bing search advertising revenue went up 40 percent, due mainly to higher revenue per search, increased search volume, and the end of the North American revenue-per-search guarantee payment sot Yahoo in the previous year. The increase was offset by an 11 percent decline in display ad revenue.
Office 365 Home and Office 365 Personal revenue increased $125 million, or 21 percent. There were 5.6 million subscribers, a gain of 1 million subscribers from the previous quarter.
Overall, this segment reported revenue of $13.48 billion, up 11 percent.
• Licensing: (Windows enterprise, Windows Server, SQL Server, Visual Studio, System Center, Office for businesses, Dynamics, Skype, Lync, SharePoint, Exchange, Windows Embedded): $11.22 billion, up 6 percent.
Windows volume licensing revenue increased 11 percent.
Revenue for server products grew $577 million, or 14 percent, driven largely by double-digit growth in SQL Server, System Center and Windows Server premium version.
Office commercial revenue, including Office 365, grew 4 percent.
• Other (enterprise services, cloud services, including Office 365 for businesses, Azure, Dynamics CRM Online): $2.26 billion revenue, up 44 percent.
Commercial cloud revenue grew 147 percent, due largely to triple-digit growth in commercial Office 365 and Azure. At the current subscriber rate, the commercial cloud businesses is expected to exceed $4.4 billion in revenue by the end of fiscal year 2015.
Microsoft shares closed flat today at $44.83 and were trading at around that price after-hours.
[The fuller story, running in the print edition of The Seattle Times July 23, 2014, is here.]