Stated in the article, “Rather than creating a premium device to rival Apple and Samsung in the developed world, Microsoft plans to rely on partners to mine emerging markets with budget smartphones.” Microsoft’s CEO stated that the company as a whole wants to stray away from being strictly a software company to a entity that will focus on devices and services more this the mind set of it yielding more market share. Alternatively, it seems Microsoft is afraid to enter an extremely profitable and competitive market. This market is the smartphone market. Numerous companies have tried to take a piece of this plentiful pie but failed miserably. Microsoft will only take this risk if it’s partners jump off the cliff first. “Microsoft recognizes that the cost of creating a premium handset to compete at the high-end of the smartphone market against Apple’s iPhone and the Samsung Galaxy S3 is an enormously expensive and risky proposition.” Moreover, the company feels that investing in a market like this isn’t the best use of the company’s resources so instead Microsoft looks to gain this lost ground in, equally as risky, emerging markets. In markets like these they will be focuses on partners like Nokia to establish this.
Some make think that Microsoft surface may have stumbled but the company intends to build devices when its numerous partners aren’t trying to produce gadgets that resonate with the consumers. Markets like that smartphone market in the U.S are extremely developed markets. Some may think this is a perfect chance for Microsoft to take a dive in but the task of displacing Apple and Google with a Microsoft-made product is near impossible. The game with competing with Google and Apple is one Microsoft just doesn’t want to play.
I thought Microsoft’s plan was an extremely thought out and strategic one. Microsoft will be under the radar in the technology game for just a little bit but then will capitalize on the right technology or gadget at the right time. Competing with companies like Google or Apple is near impossible in an already established market. The only way to win this innovation battle is let them win this “fight” and focus on the “war” or the next mind blowing thing. With Microsoft taking all the focus off this market they can truly succeed in a new market and get there before Google and Apple. At the end of the day, it started with Microsoft. Lastly, I feel the quality of Microsoft’s products are on the line if the company attempts to come out with a smart phone because customers are extremely picky about products like these
Questions to consider
1. Is Microsoft making the right choice by taking a safe route and losing market share?
2. How much market share could Microsoft actually capture come Apple and Google?
3. Are there any emerging markets that Microsoft has missed or do you know of any they could capitalize on in the future?
4. How is Microsoft managing its quality?
February 2013 Smart Phone Market Share
Google’s Android: 51.7%
Apple’s iOS: 38.9%