Microsoft must sell own-brand Windows 8 tablet for under $500: researchers

June 18, 2012

Microsoft is copying Apple, but must beware tablet fragmentation

The consensus around the industry is that Microsoft is ‘doing an Apple’ by launching its own tablet, in the sense that the Redmond giant would then have its own hardware, software and pool of apps to police, thereby controlling the entire user experience.

To that end, Informa’s principal analyst David McQueen believes Microsoft is following Apple and (to lesser extent) Google in making its own devices, but stresses that Microsoft must not miss a beat when it comes down to marketing the device.

“By taking this approach Microsoft needs to make sure it hits the market running as it is essential the tablet is marketed properly and shows its full potential if it has any hope of displacing Apple’s iPad”.

That said, McQueen thinks that the success of Microsoft’s own-brand tablet will depend on Microsoft Office, and warns that ARM and Intel fragmentation could put the brakes on any Windows 8 tablets in enterprise, Microsoft-branded or otherwise.

“If it (the Microsoft tablet) has the requisite Windows Office applications available from launch and suitable peripherals to make input easier at a price point that is competitive, then I do see it displacing notebooks and netbooks replacement in the office.

“There may be a problem with fragmentation owing to ARM-based and Intel-based versions of the same Windows 8 OS, and possible differences by vendor, but this may be addressed in future Windows releases.”

Microsoft must sell the tablet for under $500, and keep OEMs happy

Context analyst Salman Chaudhry poignantly suggests that ‘there’s a lot resting on this one’ and even claims that the launch event may determine whether Microsoft’s entry into the tablet market is a success over the next two years.

For Chaudhry, Microsoft needs to get across the tablet’s unique selling points in face of competition from Apple, and he believes that any such Windows 8 tablet must be sold for under $500, offer native Office tools, Xbox Live functionality and a stable of high-quality apps. Interestingly, the analyst believes that Microsoft may make a loss on the device, at least when it is first launched.

“We would anticipate that Microsoft will be following its Xbox model strategy by looking to gain mindshare and market share despite potential initial losses made on sales of the device itself. Once enterprise adoption has been created, this will be followed by consumer adoption – which is taking a reverse approach to Apple”, said Chaudhry.

That said, Chaudhry says that Microsoft mustn’t forget those OEM partners who are licensing Windows 8 for tablets. “Microsoft needs to maximize and nurture relationships with existing OEMs and overcome the challenge of maintaining a hardware development strategy while keeping OEMs happy”.

Or: Microsoft will announce a content partnership, not it's own-brand tablet

For all the excitement over a Microsoft tablet, Carolina Milanesi, research VP for consumer technologies at Gartner, debates whether Microsoft will announce a tablet, and even questions what the point would be.

“I am not sure about the value a branded tablet would have for Microsoft, other than setting the benchmark for what it wants ODMs to deliver. But if this is the case, the event today seems way too hyped for it”.

Milanesi went onto suggest that today’s event more be more of a content partnership. “I am more on the thinking that the event today is linked to some content deal for Xbox or even for tablets".


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