4 ms·

Microsoft is afraid to cross the chasm. It must become a hardware manufacturer to compete with iPad. The iPad has disrupted the steady decades-long growth of P

Microsoft is afraid to cross the chasm. It must become a hardware manufacturer to compete with iPad. The iPad has disrupted the steady decades-long growth of PC sales. Microsoft has the choice of competing with Android on the tablet low end, or of competing with Apple on the tablet high end. But because Microsoft is a software manufacturer, competing with Android on the low end means competing with something that is free - aside from existing mobile patent royalties. And competing with Apple is difficult because Apple keeps all the device sales profits, whereas Microsoft must split profits with tablet hardware manufacturers - who have the choice of using Android or some other Linux-based tablet OS. By the summer of 2013, we will begin to see how this is sorting out. Nokia, who has bet their company on Microsoft, may be then only a year away from bankruptcy. Enterprises may be reluctant to upgrade desktops to the Metro UI in Windows 8. What will be Microsoft's tablet market share a year from now? More than 10%?

azakai 14y ago
> Microsoft is afraid to cross the chasm. It must become a hardware manufacturer to compete with iPad. Well, Microsoft as a company already crossed that chasm with the XBOX (and Zune, if that matters). But yes, for the Windows section of Microsoft, that is a huge step to make.
- ams6110 14y ago
  Odd how the history played out. Mac OS X began as NeXT's OS (NEXTSTEP). When NeXT failed to get market traction with their high-end proprietary hardware/OS platform, they abandoned hardware and became a software/OS company. Microsoft already owned that space however. When NEXTSTEP the OS failed, they sold to Apple, became Mac OS X and later iOS, and went back to being a high-end proprietary hardware/OS platform. Microsoft however, long successful as a software company, is now facing the prospect of having to compete as a complete hardware/software platform, something they've never done, and something that Mac OS X (as NEXTSTEP) failed at previously. I guess it just shows that neither strategy is necessarily the "right" one. It's all about providing what the market wants, when it wants it.
  - SlipperySlope 14y ago
    Right. Its interesting to consider the choices available to the incumbents given their respective legacies. Is Microsoft making a mistake by pricing its mobile OS bundle at a high $85? To what extent is that decision forced by their existing Windows franchise? I think that Microsoft is making a locally optimal decision, and cannot yet fully come to grips with the post-PC era.
huggyface 14y ago
It must become a hardware manufacturer to compete with iPad. Is Apple a hardware manufacturer re: the iPad? Do they have chip foundries, LCD plants, manufacturing plants? As you know they certainly don't. Samsung, on the other hand, does. They make their own...everything. How is that working out for them? Are they destroying Apple with their profit advantages. It is never so simple. It is actually ridiculously complex, and cargo-cult hand picking of attributes of leaders and losers (while ignoring all of the exceptions) is seldom a useful exercise. Microsoft has the choice of competing with Android on the tablet low end, or of competing with Apple on the tablet high end. Another rather questionable analysis, sorry. The iPad dominates because it's cheap (options like the Xoom have been, perversely, more expensive). In what universe is the iPad the "high end"? Further as prices do move down, Apple most certainly is just as heartily in that competition, and we know that a 7" iPad is not far off. Microsoft needs to make a product that people want. It's as simple as that. Android had faltered on tablets because it was, simply, a terrible tablet OS. It is becoming a very credible contender. Is Windows 8? Time will tell, but I see little to competitively sell it over either ICS or iOS but a lot of hot air and futurist speculation about how Microsoft will somehow leverage their other markets to take over the tablet market (a strategy that has failed miserably for them, but here we are again. How many people actually want Office on a tablet again?)
- SlipperySlope 14y ago
  Clearly Apple is a hardware manufacturer according to the common business definition. Samsung is doing very, very well in the mobile device market - second only to Apple. Hardly anyone else makes a profit! Really it is quite simple to analyse the confounding situation Microsoft finds itself in with regard to pricing its mobile OS bundle. They can either price it high or they can price it low. I consider why they priced it high. iPad in the current reality is the high end of popular mobile tablet devices. One need only look at tablets for sale at Amazon. You say that "Microsoft needs to make a product that people want". OK. But Microsoft sells software - and does not have direct control over what actually gets sold to tablet customers. This software approach worked for the commodity PC market for decades - thus the chasm. I agree with your arguments about Microsoft's bet on Windows 8.

azakai 14y ago

> Microsoft is afraid to cross the chasm. It must become a hardware manufacturer to compete with iPad. Well, Microsoft as a company already crossed that chasm with the XBOX (and Zune, if that matters). But yes, for the Windows section of Microsoft, that is a huge step to make.

ams6110 14y ago
Odd how the history played out. Mac OS X began as NeXT's OS (NEXTSTEP). When NeXT failed to get market traction with their high-end proprietary hardware/OS platform, they abandoned hardware and became a software/OS company. Microsoft already owned that space however. When NEXTSTEP the OS failed, they sold to Apple, became Mac OS X and later iOS, and went back to being a high-end proprietary hardware/OS platform. Microsoft however, long successful as a software company, is now facing the prospect of having to compete as a complete hardware/software platform, something they've never done, and something that Mac OS X (as NEXTSTEP) failed at previously. I guess it just shows that neither strategy is necessarily the "right" one. It's all about providing what the market wants, when it wants it.
- SlipperySlope 14y ago
  Right. Its interesting to consider the choices available to the incumbents given their respective legacies. Is Microsoft making a mistake by pricing its mobile OS bundle at a high $85? To what extent is that decision forced by their existing Windows franchise? I think that Microsoft is making a locally optimal decision, and cannot yet fully come to grips with the post-PC era.

huggyface 14y ago

It must become a hardware manufacturer to compete with iPad. Is Apple a hardware manufacturer re: the iPad? Do they have chip foundries, LCD plants, manufacturing plants? As you know they certainly don't. Samsung, on the other hand, does. They make their own...everything. How is that working out for them? Are they destroying Apple with their profit advantages. It is never so simple. It is actually ridiculously complex, and cargo-cult hand picking of attributes of leaders and losers (while ignoring all of the exceptions) is seldom a useful exercise. Microsoft has the choice of competing with Android on the tablet low end, or of competing with Apple on the tablet high end. Another rather questionable analysis, sorry. The iPad dominates because it's cheap (options like the Xoom have been, perversely, more expensive). In what universe is the iPad the "high end"? Further as prices do move down, Apple most certainly is just as heartily in that competition, and we know that a 7" iPad is not far off. Microsoft needs to make a product that people want. It's as simple as that. Android had faltered on tablets because it was, simply, a terrible tablet OS. It is becoming a very credible contender. Is Windows 8? Time will tell, but I see little to competitively sell it over either ICS or iOS but a lot of hot air and futurist speculation about how Microsoft will somehow leverage their other markets to take over the tablet market (a strategy that has failed miserably for them, but here we are again. How many people actually want Office on a tablet again?)

SlipperySlope 14y ago
Clearly Apple is a hardware manufacturer according to the common business definition. Samsung is doing very, very well in the mobile device market - second only to Apple. Hardly anyone else makes a profit! Really it is quite simple to analyse the confounding situation Microsoft finds itself in with regard to pricing its mobile OS bundle. They can either price it high or they can price it low. I consider why they priced it high. iPad in the current reality is the high end of popular mobile tablet devices. One need only look at tablets for sale at Amazon. You say that "Microsoft needs to make a product that people want". OK. But Microsoft sells software - and does not have direct control over what actually gets sold to tablet customers. This software approach worked for the commodity PC market for decades - thus the chasm. I agree with your arguments about Microsoft's bet on Windows 8.