3 ms·

All of this presumes that MS has a five-year runway to figure out the consumer market at their leisure. Do they though? If neither Surface and Windows Phone h

All of this presumes that MS has a five-year runway to figure out the consumer market at their leisure. Do they though? If neither Surface and Windows Phone have any traction through the holiday season, I don't see how they'll find it in 2013.

mgkimsal 14y ago
They can't reprice these too much without causing a huge issue, so they'd might need to do yet another product, but a surface pro at, say $299, with the keyboard bundled, would do well. That's a price point where a lot of corporate people can get one to test, without needing approval (under $500 vs > $1000). "But they'll lose money!" They've already lost the money (it's already spent). It's a matter of whether they can get marketshare with the money that's been spent, or whether it will go down in flames. Look at HP TouchPads. They were doomed at $499, but flew off the shelved at fire sale $149/$199 prices, even when people knew it was an 'end of life' product with no hope of a long term ecosystem in the future. I guess I don't understand why it's acceptable for xbox and game consoles to lose money on hardware, but make it up in game sales, but for tablets, it's not acceptable to lose money on the initial hardware, and make the profit on software. Seems a double standard at the very least.
- kvb 14y ago
  Because the attach rate isn't high enough for tablets. As far as I'm aware, even Apple's not making a ton on their app store (I mean, it's profitable, but it's a pittance compared to their hardware profits). I don't understand your emphasis on market share. Sure, there are some network effects (more users <-> more developers), but what's the point in losing money to gain market share, especially if you set an anchor on a price point that won't ever make you money? Apple's losing market share to Android, but I doubt that fact keeps them up late at night, because they're making most of the profits anyway. What evidence is there that Surface is losing them any money? Maybe it's not selling as well as they'd hoped, but that doesn't mean it's in the red - maybe it's not selling well because of supply chain issues, or the lack of channels through which they're selling.
  - mgkimsal 14y ago
    even so - the current model is not working for anyone but apple. how many more touchpad/surface/playbook attempts do people need to go through (losing billions in the process) before people try something else? MS is well-known for developer tools. With enough installed base for MS/win tablets, the ecosystem around developer tools might help make up the difference in some measure. Something's gotta give, and continuing to charge at the iPad market with "hey, we'll charge $499+ for something with 0 ecosystem around it (surface RT)" is bordering on fiscal negligence.

mgkimsal 14y ago

They can't reprice these too much without causing a huge issue, so they'd might need to do yet another product, but a surface pro at, say $299, with the keyboard bundled, would do well. That's a price point where a lot of corporate people can get one to test, without needing approval (under $500 vs > $1000). "But they'll lose money!" They've already lost the money (it's already spent). It's a matter of whether they can get marketshare with the money that's been spent, or whether it will go down in flames. Look at HP TouchPads. They were doomed at $499, but flew off the shelved at fire sale $149/$199 prices, even when people knew it was an 'end of life' product with no hope of a long term ecosystem in the future. I guess I don't understand why it's acceptable for xbox and game consoles to lose money on hardware, but make it up in game sales, but for tablets, it's not acceptable to lose money on the initial hardware, and make the profit on software. Seems a double standard at the very least.

kvb 14y ago
Because the attach rate isn't high enough for tablets. As far as I'm aware, even Apple's not making a ton on their app store (I mean, it's profitable, but it's a pittance compared to their hardware profits). I don't understand your emphasis on market share. Sure, there are some network effects (more users <-> more developers), but what's the point in losing money to gain market share, especially if you set an anchor on a price point that won't ever make you money? Apple's losing market share to Android, but I doubt that fact keeps them up late at night, because they're making most of the profits anyway. What evidence is there that Surface is losing them any money? Maybe it's not selling as well as they'd hoped, but that doesn't mean it's in the red - maybe it's not selling well because of supply chain issues, or the lack of channels through which they're selling.
- mgkimsal 14y ago
  even so - the current model is not working for anyone but apple. how many more touchpad/surface/playbook attempts do people need to go through (losing billions in the process) before people try something else? MS is well-known for developer tools. With enough installed base for MS/win tablets, the ecosystem around developer tools might help make up the difference in some measure. Something's gotta give, and continuing to charge at the iPad market with "hey, we'll charge $499+ for something with 0 ecosystem around it (surface RT)" is bordering on fiscal negligence.