Microsoft is pursuing a strategy of Windows 7 tablets in a bid to counter the Apple iPad. But one analyst suggests that could result in cannibalization of the traditional Windows 7 PC market.
If Microsoft pursues its strategy of Windows 7-equipped tablets, one analyst
suggests the company could risk cannibalizing the traditional Windows 7 PC
market.
During Microsoft's July 29 Financial Analyst Meeting, Microsoft CEO
Steve Ballmer acknowledged that the Apple iPad had a substantial head-start in
the tablet market, but also suggested that Microsoft had its own plans for the
space.
"Apple has done an interesting job of putting together a synthesis and
putting a product out," Ballmer told the assembled analysts, according to
a transcript provided by Microsoft. "They sold certainly more than I'd
like them to sell, let me just be clear about that."
According to Ballmer, the pieces exist for Microsoft to make a substantial
foray into the tablet space. "We have a lot of IP, we have a lot of good
software in this area, we've done a lot of work on ink and touch and everything
else-we have got to make things happen. Just like we had to make things happen
on netbooks, we've got to make things happen with Windows 7 on Slates."
By
deciding to install Windows 7 on tablets, Microsoft draws a philosophical
line in the sand with other tablet players, who seem to be choosing smartphone
operating systems for their own devices: Apple loaded the iPad with a modified
version of the iPhone operating system,
and
other hardware manufacturers are considering either Google Android or the
Palm WebOS-both originally built for smartphones. According to one analyst,
Microsoft's choice to go with its operating system intended for desktops and
notebooks, as opposed to its upcoming Windows Phone 7 OS, could have been the
result of internal maneuvering.
"It is clear that they understand both the threat and opportunity
presented by tablet," Al Hilwa, an analyst with IDC,
wrote in a July 30 e-mail to eWEEK. "It looks like there was a big battle
internally and the Windows folks won over the Windows Phone 7 people, who
probably were deemed as having their work cut out for them shipping a basic
Windows Phone 7 on time."
But choosing Windows 7 for tablets, Hilwa added, could have an unintended
consequence.
"I think we will see a world of many form factors competing, but if the
machine looks and smells too much like Windows, it will mostly cannibalize
Windows PCs," he wrote. "To hit the iPad market they need a content
consumption strategy that is iTunes-like, an application development model that
leverages the phone system to get critical mass, and devices that are more like
phones in their simplicity than PCs."
But streamlining doesn't seem to be on Microsoft's tablet agenda.
"We think about these devices, and I don't think there really is one
size fits all," Ballmer said. "Some people are going to want a device
that is screen and keyboard that spins around for inking purposes. Some people
are going to want things very light or very cheap or very expensive or very
powerful. All of those things are going to be important, and we've got a push
right now."
Other executives have suggested that tablets have the potential to cannibalize
the PC market.
"If it turns out that the iPad cannibalizes PCs that, I think, is
fantastic for us because there is a lot of PCs to cannibalize,"
Apple
COO Tim Cook said during a July 20 earnings call. "It's still a big
market."
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