Microsoft cuts Surface tablet prices by $150 as it struggles to gain market share from Apple’s iPad and other devices. The Windows-based tablet hasn’t been well received by consumers and Microsoft is hoping this price cut will help to spur sales. The problem probably isn’t price, but rather, an inferior platform. As reported by Bloomberg.com:
“Surface, Microsoft’s first-ever computer, has been largely shunned by consumers and corporate customers since its debut in October, selling just 900,000 units in each of its first two quarters on the market, according to researcher IDC. Chief Executive Officer Steve Ballmer is pushing into hardware to bolster sales as demand for Windows software ebbs amid a global personal-computer slump.”
And those sales give the Windows maker only a meager share of the tablet market, even though it puts them at number five in terms of overall market share. It’s still not enough for the tech giant especially since, for the first time, they’re truly depending on mobile users to help build out their ecosystem. According to usatoday.com:
” That gave Microsoft a slim 1.8 percent share of the 49.2 million tablets shipped worldwide. Apple remained the leader with 39.6 percent and was followed by Samsung Electronics Co., AsusTek Computer Inc. and Amazon.com Inc. Microsoft was No. 5. For the first time in IDC’s quarterly report, Microsoft crept into the top five manufacturers, displacing Barnes & Noble Inc., which makes the Nook. Second-quarter figures are not yet out.”
Now of course the fact that Microsoft is faltering in the mobile arena should come as no surprise, since they’ve largely ignored the category for years. While Apple was busy creating the post-pc era, Microsoft didn’t even bother to make much of an attempt to focus on that space because they we’re doing so well with ordinary PC’s. Of course that wouldn’t work forever as mobile is definitely where the consumer is moving. But now Microsoft is late to the party and they’re trying to play catch up.
The Surface is also Microsoft’s first attempt to build hardware for its software like Apple typically does, and it’s probably the wrong strategy for them. If they are serious about becoming a major player in the mobile market, they should abandon the hardware and focus solely on the software. If they were to find a great hardware partner, like they do with Nokia for phones, they’d have a better shot at making waves in the mobile arena. Maybe they can even lure Samsung away from Google, as those two are bound to be at odds with Google beginning to get more into hardware as well.
As for the price-cutting strategy, it’s only a signal to customers that your device isn’t worth it in the first place. Sure they may push some marginal units, but nothing game-changing. Just ask Blackberry who had to do the same thing with their Playbook tablet.