If you watch TV then you’re probably under the impression based on Microsoft’s latest ad campaign that the iPad is in serious competitive danger from their Surface RT tablet. At a reasonable price it has a USB port, a microSD memory card slot, and a fancy flip up stand. However, according to Microsoft’s quarterly earning’s report things are not going so well and they have posted a $900 million dollar charge for unsold inventory.
Experts are trying to pinpoint a reason for the lack of sales, but it is likely a combination of marketing and consumer desires. One interesting point being made is that the average tablet user isn’t interested in USB ports and expansion slots because the cloud is easier to use and is proving very reliable. Even companies like Samsung are focusing on sharing files via wireless options instead of connecting wires.
“We do know we have to do better, particular in mobile devices,” Amy Hood, Microsoft’s new chief financial officer, said in a telephone interview. “That’s a big reason we made the strategic organizational changes last week.”
Microsoft’s stock fell 5% within hours of the announcement and the ramifications from this announcement will be felt for some time as leadership continues to seek solutions. Microsoft has struggled in the tablet market while Apple has held the dominate place with the iPad.
The truth is I seriously looked at the Surface when it was released because at some point I figured that there would be great tablets from other companies and I see the value in what they were trying to do. The things that keep me from switching include the number of apps I have already bought from Apple, the maturity of app development, and accessories such as my Apple TV. The ecosystem that Apple has created is going to continue to attract new customers while making hard for existing customers to ever let go.