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Microsoft on target this time

Refer to http://www.infoworld.com/d/the-industry-standard/microsoft-surface-fuels-fear-and-loathing-in-pc-land-199671

Microsoft is moving forward with it’s Surface series of tablets, which will change with the way businesses are already changing: in other words, I feel that Microsoft is getting back in touch with reality and adapting. However, most other manufacturers are refusing to change, which is likely to kill them. This is the same hubris that nearly killed Microsoft: “Our product is fine, those customers just don’t do what they are supposed to do.” Wrong. The customer may not always be right, but the customer IS ALWAYS the customer. The Market is ALWAYS right, and you ignore it at your own peril.

The customer  IS ALWAYS the customer. The market is ALWAYS right. Ignore it at your own peril.

Rumors about Microsoft Surface pricing are so high at $1,000 that there is much room for PC manufacturers to produce a very salable device that will SRP at $250 or $150 and maybe high end at $400. These are traditional prices. PCs traditionally sold at $1,200 for the latest and greatest, $800 for the commodity PCs, and $350 for obsolete inventory being purged. It is highly likely, if Microsoft wants to leave room for PC manufacturers to adapt and keep a piece of the market, that the awesome multi-core Surface tablet that doubles as a full PC replacement will be priced at $1,200. The next lower version with the cheaper chip set will likely be priced at $450 or $800. I am guessing, based upon the prices consumers / businesses have willingly paid for computer technology since 1981. Yeah, I’m that old. If the Microsoft Surface is built as well as my Microsoft Windows 7 Phone, it will have Gorilla glass, a visually and tactically excellent design, and spunky, quick, response to user input. It will compare aggressively with any Apple product and maybe capture significant iPad market share.

But it will not be mainstream commodity retail product: it will be high end product only those with the money can possibly hope to own.

I would love to equip my new mobile device teaching lab with Microsoft Surface, and have a resell agreement with Microsoft to sell their tabs after class to my students who wish they could own the tab they have just learned to love. There is no way my public charity, http://alt-fw.org, can begin to hope they can possibly ever have Surface tablets: a dozen tablets at $1,200 each is unattainable for an all-volunteer Public Charity that brings in $200 – $400 a year max. This will be true of a lot of businesses which will be changing their technology away from dedicated PCs to flexible multi-use devices. Ubuntu Linux already has such a configuration available for use with Android tablets, and others will follow: there is lots of market share available at $250-$400, and multi-use devices brought to the market 3Q2012 will do well if they just work simply and reliably — Surface priced at $1,200 will be in a totally different class and won’t hurt the $400 market at all.

Microsoft Surface priced at $1,200 will be in a totally different class and won’t hurt the $400 market at all.

But PC makers are simply not adapting: they are spending their time crying that the customer is wrong instead of building their own multi-use mobile devices. That is a lethal mistake: the old single-use boat anchor heavy PC is passe: multi-use, flexible, mobile devices which can also dock and replace a full desktop PC are the future. Pay attention to which PC makers adapt and have a product for Black Friday this year, and which ones merely sit around and whine that the customers don’t really know what they are doing, because the customers do know what they are doing: they are spending their money as they see fit.

–Kubulai