He says it's doomed to failure. He might be on to something.
Blogger and gadfly Robert Scoble has posted some interesting comments on why he thinks his former employer Microsoft will fail in the tablet space. While Scoble’s opinions have become somewhat polarizing to some folks, he does make some valid points.His comments come in an audio recording posted to FlipZu, and they are centered around two points: one, Amazon and Barnes & Noble are fighting it out on the low end and Apple owns the high-end; and two, Microsoft’s vision for tablets doesn’t jive with how people actually use them.Microsoft can’t do that. It makes the software that hardware OEMs install, and those OEMs don’t have something to make up for possibly losing money on the hardware sale.First, he says that upcoming tablets running Windows 8 are being squeezed between low-cost tablets from Amazon and the $500 iPad with its well-established ecosystem.On the low end, Amazon and Barnes & Noble can sell tablets as a loss-leader to get users to buy more digital content. Microsoft can’t compete there because it simply sells the operating system and its hardware partners won’t be willing to match Amazon’s price because they have no services on which to make money.”OEMs don’t have an ecosystem to subsidize a loss,” he said. “Whether Barnes & Noble can be successful, time will tell. What is Microsoft going to do to subsidize a tablet to compete with Barnes & Noble? If Microsoft can’t come in under $250 they are going to really struggle.”On the high end, by the time Windows 8 tablets come out in late 2012, the iPad 3 will be out and Apple will have a massive head start and be firmly entrenched. Of course, Microsoft knows a thing or two about digging out entrenched players, but still, this will be tough.The second argument is he feels Microsoft is caught up with trying to replicate the PC experience on a tablet when that is not how people use it. “The reason we don’t have a Windows tablet today is we don’t want to look Outlook and Office on a tablet system. It doesn’t feel good,” he said. “On a tablet, it’s not about work like that. It just needs to display the work I did on my home computer.” He argues that Microsoft and its partners won’t have time to redesign applications to work with the new Windows 8 interface and developers won’t like what they see under the hood from Metro.On the first point, I mostly agree. There is a major competitive argument for owning the whole ecosystem; hardware, software and apps and even there, it’s no guarantee of success, as HP found out. Amazon and B&N are going to undercut the hell out of each other and make up for it with software. In this case, that would be books and apps, and in Amazon’s case, services, too.But there could be an argument to be had for challenging Apple on the high end. Let’s not forget the survey that found strong interest in a Windows tablet. The tablet market is still new and in its early stages. We can’t declare it over just yet. Clearly there are people interested in a tablet who don’t want either Apple or Android, and that is Microsoft’s opportunity.I understand what Scoble is saying on price, but price is not everything. You get what you pay for, and if Amazon and B&N get into a race to the bottom, those tablets might not be anything to write home about.My main problem with Windows 8 remains that Microsoft appears to be making a tablet OS and will up-port it to the PC. There are things I really want that I’m not seeing, like SSD support where the basic OS is on the C: drive and apps and documents are stored on the larger D: drive.So, what do you say on Scoble’s comments?
On the first subject, he points out that both Amazon and B&N are in a fierce price war with the hardware and can afford to use it as a loss leader to make up for it with content sales. This is an age-old strategy. Nintendo used it for years, since it was the publisher of all of its game cartridges.
