Microsoft Enters Tablet Wars
For a few years now, Microsoft, currently the third largest company in the world in terms of market capitalization, has been overshadowed by competitor Apple. With the hysteria surrounding Apple’s astounding successes, Microsoft has seemingly gone forgotten in the public eye. But are they ready for a rebound into becoming a pivotal game-changer once again?
A recent step by the company indicates that Microsoft is ready to become a power player once again.
Joining Tablet Wars
According to the New York Times, Microsoft executives have recently become concerned that hardware companies they do business with, like Hewlett-Packard, are not doing enough to compete with Apple. Microsoft backed tablet devices launched in 2002 which failed due to excite customers. However, after witnessing the successes of competitor Apple’s iPad, they now understand the tablet concept can be successful.
Last week, Microsoft unveiled its new Surface tablet. It is the first piece of computer hardware the company will sell in its four-decade history.
As the New York Times explains, companies struggling to compete with Apple partially have Microsoft to blame. Due to the high licensing fees to offer the Windows platform on their devices, brands like Hewlett-Packard have been under pressure to make parts as cheaply as possible which has limited their ability to take risks on new innovations. Now the same company whose hefty software price rags have stifled their creativity has become a direct competitor.
Related: What affiliates can learn from Steve Jobs.
No Sure Thing
Microsoft’s big gamble to become a direct manufacturer of computer hardware in order to compete with the world’s largest company is far from a sure thing. Shares of their stock (MSFT) are up about 2% ahead of the overall market since the company announced the news. Investors seem to be mildly encouraged at Microsoft’s Surface gamble, but still a long way from convinced it will help them track down Apple.
Hewlett-Packard cannot be happy about the latest ambitions of their main software supplier; their stock (HPQ) is down 8% relative to the NASDAQ index since Microsoft’s Surface announcement. The situation has caused more tension between the two technology powerhouses as Hewlett-Packard blames Microsoft’s Windows 7 software as a big reason their efforts to create touch-screen hardware have failed.
Microsoft has refused to address these shortcomings in Windows 7 while remaining focused on the release of their next operating system, Windows 8.
If Microsoft’s objective is to reach Apple’s height in terms of relevancy, they’ve got their work cut out for them. Currently, Microsoft is valued at less than half of Apple ($250 billion vs. $534 billion). This is a big contrast from three years ago when it was Apple staring up at Microsoft valued at more than double themselves.
Some industry commentators speculate that Microsoft’s tablet ambitions may be a temporary effort to inspire creativity in their competitors. These commentators view Microsoft as unlikely to ever amount to more than a software giant.
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