Don't Count Microsoft Out... Yet: Sculley

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July 19 (Bloomberg) -- John Sculley, former Apple CEO and partner at Sculley Brothers, discusses Microsoft as fourth-quarter profit fell due to a combination of disappointing sales of the Surface tablet and weak PC demand. He speaks on Bloomberg Television's "Bloomberg Surveillance."

Become one microsoft?

Did you ever write a memo called one pepsi or one apple?

It is a cultural change as much as marketing change.

Microsoft may -- microsoft went through a major marketing change last week.

Their stock is up, so it is not like the company will not be sustainable going forward.

But they had a big miss on the surface.

The surface pro is like a better product.

It is a question of product, how it fits in.

You did not answer my question.

Is it a lisa?

I don't know.

That is the first phase computer that apple did before the macintosh.

Their new product is mobile as well as able to do a lot of things that pc's are doing.

Scarlet, did we see anything when it comes to software margins?

Software margins are so much higher than what microsoft is focusing on now, just hardware and services.

I will be a rethink, a repositioning for the company and investors.

John sculley , when you look at how iker sauce makes this transition, does that mean the investor base has to shift from gross investors to value -- from growth investors to value investors?

What microsoft is trying to do is to go to what they call a device and services business model, and they are sure that service business is strong.

They are throwing off 30 billions of -- $30 billion of cash every year.

I would not count them out yet.

I could ask maybe 45 more questions.

But the cash is what they are counting on.

What is microsoft landing on doing with that?

One analyst said they should buy back 20% of the stock as a starting point.

And i think they will spend a lot of that cash on big data centers because amazon is a very big looming competitor for them going forward.

Amazon is doing really well, has a higher multiple, almost no profit because people have a lot of confidence as a game changer.

I think they will spend some of that $30 billion of free cash flow building up data centers.

John sculley with us.

And michael spence with us as well.

This text has been automatically generated. It may not be 100% accurate.


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