|Report: Microsoft To Reduce Price Of Windows 8 RT Tablets|
Microsoft is taking far too long to make these decisions, imho.
Every day i'm bombarded by messages for cheapo Android-based, entry-level tablet computers. I'm seeing them well under $100. Although, i'm sure they are not on a par with the iPad and the Microsoft offering, the cheapo products are getting adopted as a first tablet computer.
If it's a users' first tablet computer, most beginners will be satisfied with a low-end device.
When users realise it has inadequate power, they will upgrade.
OTOH, many won't need the added power of an iPad or Windows tablet if they are just checking e-mail and posting to social networks.
I'm no expert, but it seems simple to me, Microsoft need a low-end product to get adopted by first time users.
|Microsoft Corp. (MSFT) is cutting the price of its Windows software for small tablets, seeking to shore up foundering efforts to combat Apple Inc. (AAPL) (AAPL) in the mobile-computing market, people with knowledge of the matter said. |
Microsoft is using the changes to try and get more manufacturers to adopt Windows RT, a version of its flagship software for tablets, said the people, who asked not to be identified because pricing is confidential. The price cuts affect Windows RT for small-sized tablets. Report: Microsoft To Reduce Price Of Windows 8 RT Tablets [bloomberg.com]
That's true. Microsoft has taken way too long to formulate an effective pricing strategy. They should vary the price of Windows by country, making it cheaper in developing countries which have weaker currencies and keeping it higher in the developed world. This is the model book publishers use, selling their titles for much less in Asia than in North America and Europe. If MS goes this way, the increase in compliance will more than make up for the price reduction. There is a strong disincentive to move to a different operating system once you're used to one. After legitimate users are locked in, their lifetime value to MS would be very high. MS tablets can have a mass market in India if prices are brought down to an affordable level. Most China made tablets aren't known to be very reliable. Microsoft has strong brand recognition and trust in Indian metros. Emerging markets deserve more attention than Microsoft wants to give them.
The Surface came in at too high a price-point, and Windows RT, although an interesting idea, simply didn't have any killer apps to offset the lack of the ability for the user to install software. It's not surprising that they need to drop the prices to fan interest.
Reducing prices is the poor man's choice.
One simply ought not to launch products that cannot hold their own at your intended pricepoint.
Reducing prices to even get a sale momentum going is simply silly.
But they're used to high price points on the OS, and that's something their competitors do not have at all (one doesn't pay directly for iOS nor android). And they're already messing big time with their PC hardware partners by selling the slate hardware themselves.
Making profit on the hardware and giving the software away for "free". isn;t an option to Microsoft in the long run as their PC partners will rebel against them.
In the end I think what made Microsoft big in the PC era, is what will make them negligible in the tablet era: their agreements with the many hardware makers out there.
Clearly making an tablet OS that's going to cost 100USD isn't an option. Nor is making tablets in low volume an option.