Yes, get ready for a Microsoft branded tablet- so it seems.
This morning you came to work and the first thing you heard brewing was that Microsoft is set to launch a branded tablet on Monday, in LA. AllThingsD broke the story then it spread to CNN, CNET, the Chicago Tribune and other sites; comments from Microsoft, Apple, and Android fan boys came pouring in shortly after that.
The tablet market is still nascent in terms of other CE segments historically, but it’s booming. Apple clearly dominates while Android is slowly gaining ground collectively, but no single brand is gobbling up large chunks of share. So is Microsoft going all in?
Microsoft issued a media invitation to an event on Monday at 3:30pm in Los Angeles stating that “This will be a major Microsoft announcement — you will not want to miss it.” It’s so secret, that even the location won’t be revealed until 10:00am that day.
Would a Microsoft tablet offer tight integration, similar to Apple? How will Microsoft’s PC OEMs such as Dell, Acer, Asus, and Sony, react and all those embracing Windows Phone and Windows 8? How might Microsoft differentiate its approach from that of its OEM partners? I doubt the OEMs are totally in the dark on this, by the way.
While Apple and Google own the smartphone market, mobile operators for two years have been asking for a strong third platform to sell as RIM and Palm (via HP) fell from grace. Tablets are an extension of the mobile play and operators want to sell even more of them too. The market is also shifting away from PCs, from a perception and consumer attention standpoint.
Windows 8 at the moment appears to have the best shot in filling that space for both tablets and smartphones ─ a unified OS that will spread across PCs, smartphones, and tablets. OS X and iOS are still separate at Apple. Another thing to keep in mind is that Windows 8 and Metro significantly different than anything Microsoft has done in the OS space for quite some time.
So then there are two schools of thought.
A Full Featured Microsoft Tablet?
You may think that a Microsoft tablet would alienate its partner network. Look where PC margins are to where they used to be. If PC OEMs won’t disrupt the model and just keep chasing the money down the drain, why shouldn’t Microsoft jump in? If you don’t disrupt your own ecosystem someone else will. That someone so far has been Google, Apple, and recently, Amazon via non-PC platforms.
Vizio entered the PC market today. They operate on razor thin margins, source everything- design, components, and manufacturing from China and yet grabbed significant US HDTV market share and are now taking their model to PCs. Dell, Lenovo, HP, Sony, and others realize each year there’s less profit in PCs. Tablets, so far, for them are hardly cash cows. Vizio’s entrance into PCs signals it’s time for the big boys to start thinking seriously about getting out of PCs.
However, OEMs are jazzed about Windows 8 and Metro and there are a bunch of cool hybrid devices waiting in the wings that will stimulate both business and consumer demand. So do you really still think this is about a fully featured tablet? Really?
Or a Targeted Approach?
Again, it’s early days for tablets when compared to other category ramps. Apple dominates but a significant percentage of the population doesn’t have them, can’t afford them, or see a need for them ─ which was Amazon’s reason to jump in.
The game is also no longer about OS platform differentiation; it’s about business model differentiation – advertising (Google), apps (Apple), and commerce (Amazon). Microsoft needs a new business model approach if their partners won’t change. An OS only play doesn’t work.
I think Microsoft is taking the lessons it’s learned from Xbox and goes for it, but their approach could be more Kindle Fire-like than iPad or the big Android slabs. Again, Xbox has already morphed into a whole home entertainment platform ─ what if this tablet is an extension of that?
It’s LA! It’s not a business-focused offering! What will be telling is what division it comes out of (IEB, probably).
This may not be a knock against its PC OEMs but rather a response to Amazon, with the movie and TV studios on board.
Or it could be a new Xbox!
We’ll see on Monday!
– Randy Giusto