Microsoft 2015 Annual Report Download - page 13

Download and view the complete annual report

Please find page 13 of the 2015 Microsoft annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 89

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89

12
Windows Phone operating system faces competition from iOS, Android, and Blackberry operating systems. Windows
Phone competes based on differentiated user interface, personalized applications, compatibility with Windows PCs
and tablets, and other unique capabilities.
Computing and Gaming Hardware
The principal products and services provided by the Computing and Gaming Hardware segment are: Xbox gaming
and entertainment consoles and accessories, second-party and third-party video game royalties, and Xbox Live
subscriptions (“Xbox Platform”); Surface devices and accessories (“Surface”); and Microsoft PC accessories.
The Xbox Platform is designed to provide a unique variety of entertainment choices through the use of our devices,
peripherals, content, and online services. We released Xbox 360 and Xbox One in November 2005 and
November 2013, respectively.
Surface is designed to help organizations, students, and consumers to be more productive. Our latest Surface
devices, the Surface Pro 3 and Surface 3, were released in June 2014 and May 2015, respectively.
Competition
Our Xbox Platform competes with console platforms from Sony and Nintendo, both of which have a large,
established base of customers. The lifecycle for gaming and entertainment consoles averages five to ten years.
Nintendo released their latest generation console in November 2012. Sony released their latest generation console in
November 2013.
We believe the success of gaming and entertainment consoles is determined by the availability of games for the
console, providing exclusive game content that gamers seek, the computational power and reliability of the console,
and the ability to create new experiences via online services, downloadable content, and peripherals. In addition to
Sony and Nintendo, we compete with other providers of entertainment services through online marketplaces. We
believe the Xbox Platform is effectively positioned against competitive products and services based on significant
innovation in hardware architecture, user interface, developer tools, online gaming and entertainment services, and
continued strong exclusive content from our own game franchises as well as other digital content offerings.
Surface devices face competition from Apple, as well as other computer, tablet, and hardware manufacturers, many
of which are also current or potential partners and customers.
Phone Hardware
The principal products provided by the Phone Hardware segment are Lumia phones and other non-Lumia phones,
which we began manufacturing and selling with the acquisition of NDS on April 25, 2014. Our Lumia phones run
Windows and are designed to enable people and organizations to connect to the people and content that matter
most, using integrated Microsoft services such as Outlook, OneDrive, Skype, and Office.
Competition
Our phones face competition primarily from Apple, Samsung, and many other mobile device manufacturers running
the Android operating system, and offer a unique combination of high-quality industrial design and innovative imaging
technologies across various price points.
D&C Other
The principal products and services provided by the D&C Other segment are: Resale, consisting of transactions in
our Windows Store and Xbox marketplace; search advertising; display advertising; Office 365 Consumer, comprising
Office 365 Home and Office 365 Personal; Studios, comprising first-party video games; Mojang; and non-Microsoft
products sold in our retail stores.
Our online application marketplaces are designed to benefit our developer and partner ecosystems by providing
access to a large customer base and benefit users by providing centralized access to certified applications. Xbox
Live transactions consist of online entertainment content, such as games, music, movies, and TV shows, accessible
on Xbox consoles and other devices.