[Rick Danger]

I was curious how Microsoft's other strategic product lines were doing, since Windows 10 cross-platform integration is their stated direction.

Amazing. Microsoft's strategy appears to tie the Windows franchise to two product lines (Windows Phone and Surface) that are underperforming the market while the third, the Xbox line is at least viable.

In a well researched Wikipedia article on Smartphones, statistics for sales and market share by operating system are quoted from Gartner Research:

By operating system
Main article: Mobile operating system

The market has been dominated by the Android operating system since 2010. Android's market share (measured by units shipment) rose from 33.2% in Q4 2011 to 78.1% of the market in Q4 2013. Apple's market share oscillated between 15% to 20.9% during the same period. BlackBerry's market share fell from 14.3% in Q4 2011 to 0.6% in Q4 2013. Windows Mobile market share rose from 1.5% to 3% during the same time frame.[102]

As of the end of Q3 2014, Android was the most popular operating system, with a 84.4% market share, followed by iOS with 11.7%, Windows Phone with 2.9%, BlackBerry with 0.5% and all others with 0.6%.[103]

Concerning the heavily marketed Surface and Surface Pro tablet offerings:

Sales

In March 2013, Bloomberg reported from inside sources that Surface sales were behind expectations, particularly the Surface RT. A total of 1.5 million Surface devices had been sold since launch, with Surface Pro accounting for 400,000 of these sales. Microsoft had originally projected sales of 2 million Surface units during the final quarter of 2012. However, the more expensive Surface Pro, with its Intel CPU that makes it a full-fledged Windows laptop PC, despite its compromises, was successful compared to other OEMs' Ultrabook hybrids which were larger and more expensive. As a result, the latest Surface Pro 3 has been targeting the premium ultra-mobile PC category including the MacBook Air.[1][2]

The poor sales of the Surface RT had been credited to the continuing market dominance of Microsoft's competitors in the tablet market. Particularly, Apple's iPad retained its dominance due its App store offering the most tablet-optimized applications. Most OEMs opted to produce tablets running Google Android, which came in a wide variety of sizes and prices (albeit with mixed success among most OEMs), and Google Play had the second-largest selection of tablet applications. By contrast there was a limited amount of software designed specifically for Surface RT's operating system, Windows RT, the selection which was even weaker than Windows Phone.[3] Indeed, OEMs reported that most customers felt Intel-based tablets were more appropriate for use in business environments, as they were compatible with the much more widely-available x86 programs while Windows RT was not.

In July 2013, Steve Ballmer revealed that the Surface RT hasn't sold as well as he hoped.[64] He reported that Microsoft had made a loss of US$900 million due to the lackluster sales of Surface RT; concurrently, Microsoft cut the price of Surface RT worldwide by 30%, with its U.S. price falling to US$350.[49][65][66][67] This was followed by a further price cut in August after it was revealed that even the marketing costs had exceed the sales.[68] On August 4, 2013, the cost of Surface Pro was cut by $100 giving it an entry price of $799. Several law firms sued Microsoft, accusing the company of misleading shareholders about sales of Surface RT, calling it an 'unmitigated disaster'.[69] In the first two years of sales Microsoft lost almost two billion dollars.[70]

While sales of the Surface line rose sharply in 2013, they dropped again in the first quarter of 2014. To be fair, the 1Q14 slump was probably a reset after brisk holiday sales, and it impacted other tablet brands across the board. But apparently Microsoft does not report Surface sales by units sold, only overall revenue for the line; a rather cute accounting trick. I will have to find some more recent data on how the Surface is trending.

According to the Wikipedia article, while the Surface hardware gains praise, the software leaves much to be desired. No doubt these comments are driving the strategy to have Windows 10 integrate Microsoft's various products:

Reviews of Surface by critics have ranged broadly. The hardware received mostly positive reviews, while the software and overall experience were mixed. Wired reviewer Mathew Honan stated that while "This is one of the most exciting pieces of hardware I’ve ever used. It is extremely well-designed; meticulous even," the tablets are "likely to confuse many of Microsoft’s longtime customers".[52] TechCrunch,[53] Matt Buchanan at Buzzfeed,[54] and Gizmodo recommended against purchasing the tablet. Gizmodo mentioned issues such as the high price tag and described it as similar but inferior to the iPad, but also praised the hardware saying, "You'll appreciate it every time you pick it up and turn it on. It's a simple, joyful experience."[55] David Pogue at The New York Times praised the hardware but criticized the software.[56] The Verge described the technology as fulfilling the role of a laptop or tablet "half as well as other devices on the market," adding "the whole thing is honestly perplexing."[57] Warner Crocker from Gotta Be Mobile described it as "frustratingly confusing."[58] Farhad Manjoo of Slate noted that the "shortcomings are puzzling" given how much time Microsoft spent developing the device.[59] Neil McAllister has noted the lack of a compelling case to switch from the iPad to a Windows RT device at the same price point, because Apple already has a strong network effect from their app developers and few Windows developers have ported their offerings over to the ARM processor.[60]

It has worse battery life than similar devices.[61] The Surface Pro has shorter battery life than the Surface RT due in part to its full HD screen and Intel Core i5 processor.

Sales of the first generation Surface did not meet Microsoft's expectations, which led to price reductions and other sales incentives.[62][63]

Again, to be fair, no doubt Microsoft may have made progress with the Surface product line. But again, they obviously face an uphill battle in appealing to the consumer when compared to established Android or iOS products. The failed Zune media player should have been an object lesson that Redmond took to heart. So hitching Windows 10 to struggling Windows Phone and Surface products smells of desperation.

While the Xbox platform lags behind Sony's PlayStation and Nintendo's Wii, it has a solid niche and appears to be well respected. Interestingly with the Xbox One product Microsoft has moved away from the dedicated Xbox OS to Windows 8 (and soon Win 10). I will research if this move has impacted the experience of Xbox users.

Could a three legged horse win the Kentucky Derby ?