Microsoft is no stranger to making hardware – along with the odd mouse and keyboard, it has been making and selling its successful Xbox line of game consoles for a decade.
It now seems that Microsoft will enter into the tablet market. Microsoft has scheduled an event on Monday in LA, where it promises to make a major announcement. Although the nature of the event has not been disclosed, every clue is that the Redmond company, which is most famous for Windows and its Office software, will announce its entry into the tablet market.
Historically, Microsoft has relied on hardware manufacturers to build PCs for which it provided the OS (i.e. Windows and, before that, DOS). This business model has worked well for nearly three decades now, so why would Microsoft try to change the status-quo?
There are several possible answers, the most obvious of which is that tablet makers aren’t rushing to build tablets which can run Windows 8 or Windows RT (the oddly named version of Windows for ARM). Clearly, Microsoft sees a big future in tablets, and the Redmond-based giant is way behind Apple and Google in terms of hardware solutions. If Microsoft releases Windows 8 and tablet designs are either slow in coming to the market, too high priced, or too bland, then all of Microsoft’s efforts put into developing Windows 8 will be wasted.
Microsoft is so keen on the post-PC tablet era that Windows 8 has almost abandoned the traditional desktop. In fact, Windows 8 RT doesn’t allow third party software to run on the desktop, instead all non-Microsoft applications must use the new Metro interface. Such a big investment (and could we say gamble) by Microsoft needs to be protected. The solution, thinks Microsoft, is for it to make its own tablet (or possibly tablets).
There are some key factors which Microsoft needs to get right if it wants to have any chance of success.
The first is the price. The tablet market isn’t the PC market. At one end you have Apple and Samsung, offering high-end gadgets with lots of power and appeal. Then you have a mass of “me too” companies, all selling a huge variety of Android tablets at different price points (but mainly less then the likes of Apple). Then you have Amazon, who is selling the Kindle at a very attractive price, plus, it ties it into Amazon’s huge content delivery system.
Where is Microsoft going to position its tablet? In the $400-$500 range to compete with Apple? Or in the $150-$200 range to take on Amazon? The worst thing Microsoft can do is fail to come up with a market position that makes Windows 8 tablets unique and desirable. I already have a tablet, I can already download books, games, music, and films. Why would I change what I have for a Microsoft tablet?
If Microsoft can’t answer that question, then it will fail.
This is the reason Microsoft and Nokia have failed with Windows Phone. Nokia jumped on board the Microsoft ship and released phones based on Microsoft Windows Phone 7, but, in doing so it never answered the question posed above: why should I change? Existing smartphone users have invested real money in buying apps, books, and music for and via their smartphones. This is an investment. If I buy a tablet, naturally I want one which can use the same apps etc as my phone. Moving to a new eco-system is costly.
Microsoft needs to make me want to move. Already Windows 8 is giving me lots of reasons not to move. I can’t run my existing PC software on a Windows 8 RT tablet. I can’t get an upgrade with a re-compiled version of my PC software which runs on the ARM CPU. I can’t use my Android apps. So why would I buy Windows 8? Windows XP has been around for 10 years and it is sure that Windows 7 has a lot of life left in it. So I won’t get Windows 8 for my PC (besides, the Metro UI is really bad and just doesn’t work on the PC), and so I won’t buy a Windows 8 based tablet. Android works just fine for me.
It is also unclear what Microsoft can bring to the table that other experienced tablet makers can’t. It is also very uncertain what the reaction of tablet makers will be. Before, there was no competition between Microsoft and the hardware companies. One made the hardware and the other the software, simple.
But now Microsoft becomes a competitor to the tablet makers. It is possible that tablet makers will abandon making tablets for Microsoft over the mid-term, leaving Microsoft as one of the only tablet makers for Windows 8… And maybe that is what they want… but hold on, that would turn them into Apple!
What do you think? Will Microsoft announce its entry into tablet hardware on Monday? Would you buy a Microsoft-built tablet? Would you abandon Google/Android for Microsoft/Windows? Let me know by leaving a comment below.