Entry into the tablet market at a high price.
Microsoft’s core business has long been software. And the focus of that software has been the desktop. Microsoft for most of its life has believed that the desktop is king and in may respects that has been correct until recently. A shift is moving away from desktop computers and even laptop computers towards tablet computers. Microsoft has made the coming Windows 8 to be the OS for tablets. But that is not enough for Microsoft. They have decided they need to be a hardware company as well. They have really been a hardware company for almost as long as the company has existed.
You just do not think of Microsoft as a hardware company. They have been producing the Microsoft Mouse for so many years along with their Microsoft keyboards. They have manufactured cards that go into PCs and so much more. It seems that they have been in the hardware business for 32 years out of the 37 years they have been in business. So, they are a hardware company, but we just do not view them as such. The reality is they have been involved in hardware for years. And that includes the xBox and Kinect which have been extremely popular for them. But, they have not really been considered a hardware company because they do not build computers.
Building a desktop computer or laptop would have moved them into being seen as a hardware maker. Given the shift to tablets, Microsoft has made the decision to move into what most would consider as being a hardware company with their Surface tablet. This is entering them into a highly competitive market with the likes of Apple and Amazon. Those two companies basically control the tablet market making the entry of a new comer somewhat difficult.
Microsoft has their new Windows 8 OS to run their Surface tablet and that may make a difference for them. Microsoft has their great marketing arm which knows how to promote products. But that may not be enough for them to be successful. The one big thing that Microsoft has going for them is the integration of their Windows 8 OS. It is immediately ready to integrate tablets into a Windows environment within companies. Its built in security within their server OS makes it an immediate success for businesses.
Whether Microsoft can achieve a level of success is an unknown. Part of the problem is the pricing they are putting out with their newest hardware product. Starting at $500, this may be a tough sell when compared to other tablets, such as the Apple iPad. If they were to come in with a price less than the Apple iPad, it would give them a sales boost. The market for tablet prices is currently facing a lot of downward pressures for price. This is especially true for the 7 inch models. At 10.6 inches, it looks to be one that is a little less portable, but could do well.
Just how well Microsoft is going to do with their Surface tablet will depend on exactly who they are targeting for this. It does not look like it is a good fit for small businesses.