Microsoft: First Branded Tablets; Next, Their Own Smartphone?
Microsoft's move into the tablet hardware business may be just the first step in a radical repositioning of the company's approach to the device market. — As you know by now, Microsoft on Monday held a launch event in Hollywood …
Context & Ripple Effects
The Surface launch caps a fast-building arc: six days ago an insider told The Wrap that Microsoft was manufacturing a tablet to rival the iPad, and Monday's Hollywood event confirmed it — the company's first branded computers. Business Week framed the move as a rebuke to the PC industry that has licensed Windows for decades, and the story traveled unusually far, picked up by Reuters, Bloomberg, Gizmodo and The Verge among others.
The open question Forbes raises is whether tablets are step one. Microsoft put Windows Phone 8 on official display this week ahead of licensee launches, with its phone efforts moving into the spotlight at Wednesday's event — so any Microsoft-branded handset would land directly on top of partners it just briefed.
First-order effects
- Microsoft's OEM partners — the PC makers who license Windows — now compete against their own supplier in hardware, after years of Microsoft staying out of devices.
- Windows Phone 8 licensees learned this week that the platform owner may become their direct competitor with a branded smartphone, per the rumored next step.
Second-order effects
- Hardware partners facing channel conflict have reason to hedge toward Android or other platforms, weakening the Windows ecosystem Microsoft depends on.
- A first-party Microsoft tablet resets tablet pricing and positioning expectations against the iPad, forcing rivals to justify their premiums or margins.
Third-order effects
- If the pattern holds, Microsoft is restructuring from a licensing business into a vertically integrated device company on the Apple model — a shift that would redefine what 'Windows PC' means for the entire industry.
- The leaked internal document on future Xbox plans, which Microsoft moved quickly to take down from Dropbox and Scribd, shows how much of this repositioning is being planned behind closed doors before partners hear about it.
The trend: Platform owners are crossing from licensing software to building their own hardware, with Microsoft's Surface marking the moment the PC industry's supplier became a competitor.