Microsoft Not Worried About Tablet Market

| Analysis

Microsoft investors are increasingly worried about Microsoft’s slow-motion response to the tablet market, one that appears to be eating into PC sales. But a Microsoft Executive says the company isn’t worried, according to Reuters on Friday.

Jean-Philippe Courtois, president of Microsoft International told Reuters, “Devices are going to go and come.” He said that his company is making progress in the tablet product area, and reiterated that a major Microsoft focus is cloud computing. “This is a deep transformation of the scenario in IT over the last decade,” he said.

Mr. Courtois’ remarks came a day after Microsoft stock fell amidst flat revenues and investor worries that Microsoft is mired in legacy desktop OSes and not meeting the challenge of mobile devices. J.P. Morgan, according to CNBC, noted that concerns about tablets “hang over Microsoft like a dark cloud.”

A raft of new tablets are set to hit the market soon, and none of those products are tied to Microsoft Windows. Hewlett Packard is expected to announce a WebOS-based tablet on February 9th, RIM is ramping up production of the QNX-OS-based PlayBook, and other tablets slated to ship are using the Android OS. The Samsung Galaxy Tab, an Android-based tablet, has sold 2 million units in just three months. Few analysts think that Microsoft’s Windows 7 or even Windows 8, scheduled for 2012, targeted at low power processors, is in the running.

Apple is expected to sell over 40 million iPads in 2011, and sales have already dramatically cut into netbook sales. By the end of 2011, the tablet market may just pass Microsoft by.

Steve Ballmer, who was expected to demonstrate something related to tablets at his CES keynote, declined and instead said that the company is focusing on Xbox, Windows Phone 7 and improvements to Windows 7. But tablets? Microsoft isn’t worried at all.

That has Paul Thurrott in a panic.

Comments

Tiger

Funny, if you go back to the main headline page and read the story immediately below this, and then ponder, “What are they thinking in Redmond?”, you will quickly realize…they’re not.

Nemo

Well, Microsoft isn’t worried, because ?Devices are going to go and come.?  Well, so do companies.  And the hope that Minority Report-like Kinect will save the day is a thin reed to build Microsoft’s future on.

BurmaYank

It seems to me that MS’s only hope at this point to avoid watching the last train to mobile computing of the future, leaving MS standing there on the platform*, is to develop a fully equivalent MS Office suite for the Android pad (or for the Blackberry pad - or even, heaven forfend, the iPad).

*(That platform being left behind by the mobile computing express, of course, is the Windows platform.)

mhikl

When has a company ever come out and said “We’re scared as hell and you should sell”.

Microsoft is not out of the picture and they might come back with a great tablet but at the rate the corporate community and plebs have been succumbing to Apple’s IOS contraptions, will M$‘s two greatest sources of income have been eroded to the point that the question is moot?

History has a habit of evolving; catching up might not be good enough.

geoduck

You really should have used a picture of Alfred E Neuman for this story with the classic caption What Me Worry?

John Martellaro

geoduck: Great idea!  But I’d get into copyright trouble if I did that.

rlo

I remember MS making this same comment about browsers and the internet way back calling it a “fad”.

b9bot

That’s what I like about Balmer, when in doubt just ignore the whole thing.  LOL!!!!!!!

Constable Odo

Unless Microsoft can compress that bloated Windows 7 desktop into the size of a cellphone OS, there is never going to be a viable Windows tablet.  All that damn code with backwards compatibility to the 1960’s is just begging to be dumped.  What is it with those stubborn Windows fanbois that just have to have a full version of Windows 7 on a skinny little tablet.  They think they’re going to be able to accomplish so much more than the next guy running a tablet with a lightweight OS.

If Microsoft is so sure that Windows netbooks are the future, they should just build netvertibles with Windows 7 and let the fanbois buy them by the millions.  Those Windows fanbois are always pointing out how much more useful a netbook with a keyboard is over a tablet.  Go with it.

wab95

Caesar to Senate: “Barbarians at the gate? Meh. Civilisations will go and come. Anybody seen my fiddle anywhere?”

MS has put itself in this pickle by directly contrasting itself competitively to Apple, thus raising expectations that anything Apple does, they will do; but since they enjoy greater desktop OS marketshare, what they do will surpass Apple’s efforts. This is simplistic thinking. It is also suicidal thinking for a company that lacks Apple’s skill set.

MS could relieve itself of this pressure by being more proactive in defining its own agenda and disassociating itself from direct competition with the likes of Apple; specifically, ceasing the frenetic and abortive responses to all things Apple. MS does not need to enter the tablet OS market for sustainable profitability, any more than they need to enter hardware manufacturing. These unmet expectations will continue to shake investor confidence and sink their stock and future prospects through the floor. MS could make good with IT enterprise solutions for dominant tablet platforms, for example, while they take time for deliberate development of their own OS, if they choose to do so.

That said, the reverberations of the iPad (and iOS) revolution are industry-wide. I think they can have a cathartic effect on MS, if the company uses this as an opportunity for a rethink (something that Tiger ominously suggests they are not doing, period). I anticipate changes in either strategy and focus, leadership or both in near term.

Ross Edwards

And the hope that Minority Report-like Kinect will save the day is a thin reed to build Microsoft?s future on.

To be fair, the Kinect is pretty damned awesome.  And I’m as much an Apple fanboy as you’ll find anywhere, so this isn’t partisanship talking.  But it’s a tool for doing certain things and those aren’t the only things we do with our digital devices.  I won’t be trading in the iMac anytime soon.

As I read through the other comments, I am reminded of something we all need to keep in mind: Apple’s PRODUCT that they are delivering isn’t the Mac, or the iPhone, or the iPad, or any of that.  The PRODUCT is “the OSX/iOS USER EXPERIENCE.”  Apple just happens to design/make the devices that deliver that experience, because they believe that control of that conduit is essential to making that PRODUCT work for users the way it is designed to.  This is part of why Apple doesn’t give a lick whether you transfer your media between your devices or any of that.  That’s part of what DRM was designed for, but managing such activity isn’t part of the OSX/iOS user experience, so Apple makes sure it’s transparent and (effectively) unlimited from the user’s point of view.

Microsoft, meanwhile, has a different PRODUCT, and it is NOT “the Win7/Office USER EXPERIENCE.”  Microsoft’s PRODUCT is the WORK OUTPUT that is produced by enterprises (or, to a lesser extent, home users) through their platform.  Like Apple’s disinterest in what specific device they’re delivering their product on, as long as they control it, Microsoft doesn’t really care which parts of their software you need to accomplish your work, as long as they control it.  If you get an enterprise license, you don’t have to beg, borrow, or steal for a product key or a copy of an install DVD or whatever.  MS simply doesn’t care.  Your enterprise is paying them a subscription and out the other end of that apparatus comes Work Stuff.  As long as your money keeps going to Redmond, your employees will continue to be able to use MS’s vast software apparatus to excrete deliverables.  Kind of a vivid way to put it, I know, but it’s essential to conveying the concept.

MS doesn’t care about devices, and they don’t care about lightweight OSes.  They’ll scribble down any code they have to, no matter how inelegant, as long as the result is: they get paid by people who need a turn-key digital work ecosystem.  Apple doesn’t care about content, as long as they get paid by people who want their user experience and are willing to buy their devices to interface with it.  In this respect, the two companies’ bailiwicks overlap, but they no longer directly compete.

Discussion is, as always, welcomed.

wab95

Microsoft, meanwhile, has a different PRODUCT, and it is NOT ?the Win7/Office USER EXPERIENCE.?? Microsoft?s PRODUCT is the WORK OUTPUT that is produced by enterprises (or, to a lesser extent, home users) through their platform

Ross,
You make good points here. My understanding, however, is that things are a bit more complicated with respect to competition between Apple and Microsoft, which I base this less on pundit projection than on observed company behaviour.

In brief, and forgive my not having time to add links here, Apple launches the iPod, then an online music store. MS launches Zune, and a music service, both of which flounder. Apple launches Tiger, replete with new features, MS comes out w/Vista touting many OS X-Tiger-like features, and Vista falls flat. Apple launches the iPhone, MS acknowledges that they wish they had done that, then years later, launch a revamped phone OS; the phone is still struggling for traction, let alone mindshare. Apple launches the iPad, MS at CES 2010 proclaims they are going ballistic on tablets, then abort their own tablet in gestation, and to date, fail to produce anything other than a power point presentation.

One cannot make this stuff up. The pattern is consistent, even if the narrative above is incomplete (which it is). I listened to an interview on BBC in late 2009 in which the interviewer (I forget whom) was speaking to Bill Gates about his foundation work, and at the end, couldn’t restrain himself from bringing up Gates’ own prediction years before that one day we would all be carrying wallet sized computers with us everywhere, and today we are, and it is called the iPhone; and proceeded to upbraid Bill for letting the side down and ceding the day to Apple.

My point is that this is both company behaviour and popular conception. Social psychologists have long recognised that, whether something is true or not, if it is a popularly held belief, and a critical mass act on it, it has real social consequence. Observing the Microsoft pursuit of Apple’s output cited above, which has an almost Roadrunner vs Coyote-esque farcical air about it, sharpens that perception in the public eye, and the public can therefore be forgiven for believing that this is the focus of one or both companies.

I, for one, do not think the dialectic is necessary or real, despite MS’s statements and actions to the contrary. MS is not Apple, and the comparison does a disservice to MS’s contribution to the tech world. MS is better than that, and as a consumer of both Apple and MS products/services, I feel it in MS’s better interests to realise this. 

I maintain that what they need is a sober, even if painful, self assessment in order to regain their bearings, and use their current skill set to carve out future progress. I believe that to be not only in MS’s best interests, but Apple’s, the rest of the tech industry, and us, the consumers. And I maintain that this is conditional upon new leadership, whether de facto or titular; and that such change is more likely than not, and sooner rather than later.

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