Is Microsoft smart to build its own tablet?

The software giant may announce a competitor to the iPad, but some of Microsoft's past forays into hardware -- remember the doomed Zune? -- don't bode well.

By TheWeek.com Jun 18, 2012 4:45PM

Microsoft (MSFT) is expected to unveil plans for its own tablet on Monday at 6:30 pm ET, marking a big shift for a company that has largely relied on software, not hardware, to make its billions.


Microsoft is pretty late to the booming tablet industry, and it faces intimidating competition from Apple's (AAPL) iPad -- which by some estimates accounts for 63% of the global tablet market. 

Furthermore, Microsoft has a mixed record when it comes to developing its own gadgets, succeeding fantastically with its Xbox video game console, and failing miserably with its Zune portable music player, which once upon a time was meant to compete with Apple's iPod. (Microsoft owns and publishes Top Stocks, an MSN Money site.)


Is Microsoft smart to build its own tablet?

 Yes. Microsoft must offer a complete package: "The time is ripe for Microsoft to offer a tablet of its own," says Melissa J. Perenson at PCWorld. The tech industry has changed dramatically since Microsoft achieved dominance with its Windows software, and the company is struggling to "stay relevant in an increasingly integrated, mobile world." Apple's seamless marriage between its sleek gadgets and user-friendly software has been the key to its success, while Windows has been badly served by outside tablet makers. Microsoft is wise to seek "better control over all aspects of the user experience." 

No. Microsoft could lose its biggest profit source: "Microsoft makes most of its money from Windows and Office," says Ina Fried at AllThingsD, "and depends on an ecosystem of PC makers like Dell (DELL), H-P (HPQ), Acer (ASIYF), and Lenovo (LNVGY) to make those Windows-based machines." Hardware makers may not take too kindly to this sudden competition from their erstwhile ally against Apple, and Microsoft could end up isolated in the ever-shifting battle for tablet supremacy. 

It all depends on the execution: Microsoft must "draw on its success selling the Xbox gaming console if it wants a shot at" winning market share from Apple, says Aaron Ricadela, Dina Bass, and Cliff Edwards at Bloomberg Businessweek. Microsoft recently unveiled Xbox SmartGlass, a Windows-based app that connects multiple devices and enables users to have a richer multimedia experience. If Microsoft integrates its tablet with the Xbox, the company can create a constellation of gadgets that will offer consumers a genuine alternative to Apple's lineup of iPhones, iPads, and MacBooks. 

Sources: PCWorldAllThingsDBloomberg Businessweek


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5Comments
Jun 18, 2012 5:38PM
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Microsoft should announce that their Windows Phone partner Nokia is build the Microsoft Fluid entertainment tablet using WP8 and it will intergate with XBox Servers and Smart Glass.

Jun 18, 2012 10:20PM
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I'm liking it.  Really liking it.  The key is the open platform you get with Microsoft vs Apple.  Now that the Surface will bridge the gap between my Xbox, PC and mobility now, I'm 100% in!

 

I will dump my EVO phone for a Win 8 new phone when I get the Surface too. 

 

I'm TIRED of living in a crystal cage (APPLE).  It all looks pretty, but I'm still encased in their cage. 

Surface gives me full blown Office and PC software on the go in a tablet package?  SOLD.  Keyboard is a smart bonus. 

 

SmartGlass is what I'm wanting to play with.  SmartGlass + Surface + PC = WIN.   I like SmartGlass b/c you can link your devices...any brand...just load the app I think is how it works.

 

Gamers go Win 8 and Surface no question.  Bank on that.  I've been a gamer for 20 years (yes, I had a Commodore 64 with Cassette Tape attachment...you loaded your games by cassette tape...Loderunner stick figure came took like 30 minutes to load...I'm not kidding) and Microsoft gets it with this new stuff.  I know that's a niche, but I'm drinking this Kool Aid big time.  If they somehow link PC and Xbox 720 (looked up upcoming model) games so cross platform games can be played online (Please read this Microsoft) then I will be in game nirvana. 

Jun 19, 2012 8:21AM
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To me it's not a tablet. It's a new take on a windows PC.
Jun 19, 2012 1:05AM
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Microsoft's problems with devices is marketing, not the devices.  They should never have dropped the Zune but made it a Zune tablet with similar capabilities as the Windows Phone and with expanded Xbox Live Games.  Zune was better than the Ipod but coming late to the Market, And then didn't know how to corner markets where Apple was dominating shelf space with their controlling practices, Microsoft could never have gotten away with the way Apple markets which is bordering on Anti competitive.
Jun 18, 2012 8:13PM
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probably gonna fail... they didn't really say anything special about it other than its keyboards..
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