PARIS – As I see a lot of ink spilt in the media over Microsoft’s upcoming Windows 8 (and/or Windows RT) tablet dubbed “Surface,” I can’t help but wonder where on earth Microsoft plans to sell this product.
If Microsoft truly wants to change the game on the global tablet scene, the software giant should aim it squarely at emerging markets – China, greater Asia, India, Brazil and Africa. Further, Microsoft should price the new tablet suicidally cheap, rather than making it “cost competitive” with tablets already on the market.
After all, this is Microsoft’s own hardware (likely to be manufactured by Foxconn) built on its own software (Microsoft doesn’t need pay itself royalties).
When market intelligence tells us Apple is making more than a 50-percent profit on its iPad, surely Microsoft has room to shave its margin on the Surface tablet.
I have every confidence that Microsoft can make its hardware cost-effectively. It’s not as if the company is a stranger to the hardware business. For 10 years now, it’s been offering its own game consoles, X-Box, produced by Foxconn.
The difference, though, is that Microsoft didn’t invent X-Box to make money in the hardware business. The end game was to develop great video game software as the real cash cow.
So, what’s in it for Microsoft, with these Surface tablets? What sort of business model does Microsoft have that will create a revenue stream beyond hardware sales?
The fact that Microsoft didn’t even let Nokia – the only partner for Microsoft’s Windows 8 in the mobile market – design the first Windows 8 tablet model makes me believe Microsoft is taking the tablet war personally. The software giant must see its reputation at risk. The last perception Microsoft wants is that it’s a company that’s lost its innovation mojo. Worse yet would be a rap as just a me-too company, knocking off Apple’s iPad or Samsung’s Galaxy tablets.
But let’s face it. Microsoft is already late to the party. The Surface tablet is a me-too product.
The real target for Microsoft’s tablets shouldn’t be Apple’s iPad, but Android-based tablets. While Android tablets have yet to dent he U.S. market, Android is not going away any time soon especially in the global market. Instead, it’s invading the world with a mission and focus.
Look no further than the “One Tablet Per Child” initiative in Thailand. Under a deal originally struck between two governments (Thailand and China), Shenzhen Scope Scientific Development Co. in China won a contract to supply 900,000 tablet computers for first graders in government schools in Thailand.
The government in Thailand selected Shenzhen Scope which promised to deliver Android 4.0-based tablets under a unit cost of THB 2,482 (US$81), excluding transportation expenses. Other Chinese vendors who bid for the One Tablet Per Child project included: TCL Cooperation ($89), Haier Information Technology (Shenzhen) Co at $105, and Huawei Technologies Co. which proposed a tablet at $135.
The project, originally proposed as an election campaign promise (always a bad idea) from the Pheu Thai party last summer, is already fraught with problems and under fire – including its selection of a tablet supplier. However, many observers believe this is just one of the hiccups along the way.
Nonetheless, what awaits Microsoft’s Surface tablets is a brave new world in the emerging markets. Without properly addressing the real need for such products on the global market, Microsoft may be missing a much bigger opportunity. Going after iPad in the developed nations is almost a yawn. If indeed the Surface tablet can offer a far better user experience than that of Android, Microsoft has to go after Android tablets – at a great price – in the geography where Android has already taken over.Related stories:
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