How Making Hardware Drags Software Companies Down

It looks as if it will be a bad day on the stock market for Microsoft, Google and Apple. As I am writing this Microsoft’s stock price has dropped almost 10%. Microsoft took a $900 million charge to write down inventory of the Surface RT, a tablet that no one seems to want. Apparently Microsoft has six million unsold units. There are so many things wrong with this device that I couldn’t list them; suffice to say that it is not the “iPad killer” that it was intended to be.

Google is down over 3% this morning, which still has the stock price close to $900. For the second quarter of 2013 Google had net revenues of $14.1 billion, certainly nothing to sneeze at. But the Motorola division, which had revenues of close to a $1 billion, had an operating loss of $342 million. That should turn around with the eagerly anticipated release of the Moto X phone. In a recent ad, Motorola calls the Moto X the “first smartphone that you can design yourself.”

Apple meanwhile is down just under 1% today, having the best day of the three companies. But there are concerns about the timing of the iPhone 5S and about Apple’s ability to compete for phone sales in emerging markets.

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