Photo: Screenshot Of Microsoft’s Surface Launch Video
Now that Microsoft is building and selling its own tablet, the Surface, most people think it’s copying Apple.While that’s an easy story line to follow, it actually looks like Microsoft is copying Google and its “Nexus” game plan.
Every year Google works with one of its smartphone partners to release a “Nexus” phone. The Nexus phone is designed to be a top of the line smartphone that showcases everything Google’s Android software can do.
The Nexus One was the first of these models. It was released in 2010. After Google set the bar with the Nexus phone, its partners quickly started making really good Android phones.
At the time, there were concerns that Google was going to be competing with its partners. Wouldn’t this infuriate them? Wouldn’t this hurt Android?
Since then Android has become the world’s biggest smartphone operating system, and its partners have had no problems selling smartphones.
Microsoft’s Surface could follow the same path. It all depends on how committed Microsoft is to building its own tablets. We don’t know if Microsoft is really all-in.
When we watched the Surface launch presentation, there was a vibe from CEO Steve Ballmer that he wasn’t totally on board with this plan. In interviews afterwards, he told reporters Microsoft was “priming the pump” for its partners, not trying to displace them.
Maybe that’s just nice spin from a CEO who doesn’t want to infuriate his partners.
However, BII analyst Matt Rosoff, who has covered Microsoft for years, doesn’t believe it’s really trying to become a PC maker. He thinks Microsoft is trying to kick its partners in the butt to get them to make tablets.
The theory is that PC makers like HP, DELL, Asus, et al tried making tablets. They couldn’t sell many, and the tablets they could sell didn’t make any money. So, they said, “We’re out of here!” and focused on making laptops, and desktops, which sell decently and make money.
Microsoft knows this short term gain is going to lead to long term pain. So, it decided to build its own tablet to defend its empire and hopefully inspire its partners.
This wake up call is supposed to get HP and Acer building Microsoft tablets, just like the Nexus phone got Android partners to build better smartphones.
If Microsoft was really trying to compete with its partners and go all-in with a tablet, why is it only selling the tablet at its 20 stores and online? Is that really the smartest plan? And if Microsoft is really all-in, and competing with its partners, why is it saying that it will be priced “comparable” to other ARM tablets (think: $600)?
If Microsoft was 100% committed to building tablets and becoming Apple it would sell the Surface everywhere and price it aggressively (think $400 or less).
Steve Ballmer knows Microsoft has had struggled to make money with hardware. He knows that his partners are still important. He also knows the iPad is changing the future of computing.
He just doesn’t seem to know exactly how to solve this puzzle.
Copying Apple probably isn’t the answer for Microsoft. In this case, copying Google might be the answer.