A few shots were fired against Windows 8 and its tablet edition today. There is the thought
that Microsoft may have missed the best opportunity to introduce
Windows 8 for tablets, or may have missed an opportunity to grow he
interest in Windows tablets and make you lust after a juicy Windows 8
tablet. With the iPad, Amazon and Barnes&Noble, the market could be
saturated and the overall mood in the tablet market appears to agree.
Should Microsoft simply scrap the idea to run Windows 8 on tablets?
How the tablet expectations have changed. We are still talking about
an opportunity of apparently gazillions of tablets per year and an
environment where we generally believe that it is everyone’s opportunity
to lose – despite the fact that we have not seen a single successful
Android tablet yet. If there was anyone who needed a confirmation that
tablets are not about hardware, but about the platform value, that
evidence should have been provided with the Amazon tablet, which
underwhelms on specs, but is sold solely through brand and platform
perception. Not that it has been a secret, but Amazon and
Barnes&Noble have been the only major companies that followed
through with this thought and offer devices that now occupy the tablet
opportunity below in the $250 range and below.
The impact was strong enough to convince traditional PC makers that
there is no significant profit left and that a quick exit may be a good
idea. In a best case scenario, market analysts in Taiwan now believe
that non-iPads and non-Kindles may be able to capture 10 to 15% of the
tablet market. Forrester’s opinion adds to that depressed mood and
states that “Microsoft has missed the peak of consumer desire for a
product they haven’t yet released.: While 46% of consumers wanted a
Windows 8 tablet in Q1 2011, only 25% wanted one in Q3. Measuring
consumer interest in an imaginary product that lacks the perception
value of the Apple product is a stroll on thin ice and little more
indication of a potential market, so those 46% should be taken with a
grain of salt.
However, Forrester has reason to criticize Microsoft that it has not
maintained the Windows 8 momentum and Microsoft marketing has clearly
failed to keep Windows 8 tablets in our minds. The spicy part of that
failure is not so much that Microsoft did not market Windows 8 or its
port to ARM or any potentially great hardware. The failure is that we
have no idea what experience Windows 8 will offer on a tablet. Forrester
reminds us that late-comers to a market, what Windows 8 clearly is,
need differentiators to succeed. The Kindle Fire succeeds by offering
the Amazon cloud platform and most of the Android tablet experience for a
relatively low price that is backed by a strong brand. Forrester says
that Microsoft has to take a lesson from Amazon to turn the corner.
That, of course, would require that Microsoft is failing at this time.
Sure, the marketing was underwhelming, but is Microsoft really
failing? I believe that this is a questionable assumption to make.
Tablets have platform value. To understand a Windows 8 tablet, we
need to understand the Windows 8 platform and the public has not seen
this platform. We don’t know much integrated the platform will be and
how Microsoft will connect PCs, tablets, phones and its strangely
under-marketed Xbox Live platform. If Windows 8 seamlessly bridges PCs,
tablets, phones as well as its video game and entertainment service,
Microsoft has, conceivably, the most powerful platform with an very
compelling value proposition. Windows 8 could easily become the fabric
that bridges the gaps Microsoft currently has to deal with. Imagine a
tablet that accesses content on Xbox Live, imagine you can play the same
games on your tablet that you play on your PC or TV. Imagine a phone
that can access private data in the same way a PC does and a tablet does
– via Microsoft’s Skydrive cloud service. In many ways, Microsoft is
further along than Apple. However, Microsoft needs to find a way to
connect the loose ends and create a platform value that will convince
you to buy a Windows tablet and phone.
What we tend to forget about Windows 8 is the fact that it is a bet
on touchscreens and the fact that touchscreens have never worked on
vertical screens such as notebook and desktop screens. Touchscreens are
made for horizontal applications. Other than the majority of analysts,
we believe that the Windows 8 touch interface is a pretty risky strategy
for traditional PCs, but makes sense for tablets. Very few users want
to reach across a keyboard and touch the screen with one hand while
supporting it with the other. If the Metro interface works, it will work
best on tablets.
Microsoft should be thinking about some tablet marketing, but it will
be more important to create an integrated platform experience, not just
software that happens to run on a tablet. If Windows 8 will be
integrated across phones, tablets, Xbox Live, and PCs, Windows 8 tablets
have a big opportunity to make a big impact.
Wolfgang Gruener in Business on November 29