Microsoft tablet push detrimental to company overall
Published: Monday, December 3, 2012
Updated: Sunday, December 2, 2012 18:12
Back when Apple brought out the iPod, Microsoft figured they would get into the market of music players. This warranted the release of the Zune, which failed miserably. Microsoft suffered through five years of poor sales before finally calling it quits on the device, while the iPod has grown into an enormous success. Microsoft is once again getting into the hardware market against Apple with the release of their Surface tablet. And while there are signs of it being different this time around, Microsoft’s hardware push will still flounder and hurt the company.
One of the initial problems is the pricing. The basic model for the Surface tablet, keyboard not included, costs about $500. A basic model of the iPad is roughly the same. So why is the pricing such a problem? If consumers are going to shell out $500 for a tablet, they are going to go with the one that has been around for a while and has been refined as opposed to the unproven new kid on the block. Apple products will always have high markups, so any device trying to compete needs to be priced considerably lower. The pricing woes only continue as Microsoft readies to launch the second member of the Surface family in the Surface Pro. The tablet runs x86 Windows 8 which makes it compatible with all the Windows software that normally runs on a desktop. It costs $899 for a 64GB model and $999 for a 128GB model. Not only is this priced higher than most tablets, but also most PCs that could run Windows 8 just as well.
The criticism of the hardware is only confirmed with the sales. On Black Friday, Microsoft’s massive spending on research, development and advertising proved futile in making a dent in Apple’s market share. At the Mall of America, research firm Piper Jaffray collected data on Black Friday in which Apple reportedly sold 17.2 items per hours while Microsoft only pushed out 3.5 items per hour. To add insult to injury, the majority of Microsoft sales that day came from Xbox games as opposed to the Surface tablet. Meanwhile, Apple was sitting pretty selling approximately 11 iPads per hour between their new iPad and the new iPad Mini.
Poor sales aside, Microsoft’s push for hardware may also burn some bridges. The Surface tablet puts Microsoft in direct competition with many of its partners who also make tablets and PCs. One of the most vocal partners has been Acer. The company has stated their displeasure with Microsoft’s competition and believes the Surface has been a negative for the PC industry as a whole.
Traditionally, Microsoft has been good at software. However, their push for hardware may be hurting their prowess in software as well. Microsoft designed Windows 8 to work across laptops, tablets, and smart phones. This however may only have hurt the operating system. The reactions to Windows 8 have been incredibly lukewarm, if not critical. Many users have complained about the learning curve and reviewers haven’t been much more positive. Microsoft is learning the hard way that operating systems for mobile devices and a computer work great separately, but flounder when combined. The hardware push has come with the added need to create an app marketplace. Microsoft has also dropped the ball here. There has been no excitement for developers to create apps for Windows. And while Microsoft can showboat how it got 20,000 apps in the first month, it pales in comparison to the Apple App Store. To make matters worse, a majority of downloads were free apps. Microsoft has gone with a pricing model that starts at $1.49. In terms of how people spend money on apps, this is much more expensive than the average app in either the Apple or Android marketplace and will likely deter purchases.
So, no matter what any colorful commercials may convene, Microsoft’s push for hardware is proving to not hold up once again. Sales wise, they have not been able to compete with the iPad. Instead they have alienated partners, hurt the software that was their bread and butter and have the makings of another hardware flub.