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Google and Microsoft tablets signal a key shift in strategy

Google nexus tablet now a reality

As we have mentioned earlier at, Google, Apple and Microsoft have widely diverging grand strategies regarding their products. To put in to most basic terms, Google is all about internet connections, Microsoft is all about the operating software and Apple is all about hardware devices. Given the recent announcement of Microsoft’s Surface tablet and the anticipated upcoming Google’s announcement of the Nexus tablet, some industry observers that these players move to controlling to a higher degree the roll out of their own particular tablet indicate a significant in their strategies. To review, Microsoft’s long standing strategy is all about the operating system. Regardless of the device that you’re using or the content that you want to view, you have to go through Microsoft operating system, and that is Windows. Windows 8, the software giant’s upcoming ‘Magnum Opus’ is more ambitious than any of Microsoft’s previous implementation of operating systems. Why? Its centralized kernel can handle all sorts of input devices, from the ATM that you use to the tablet that you use at the café, to your laptop that you schlep around and the desktop that you use at home or at the office. All these devices all plugged-in to Windows 8 are a grand vision. Similarly, Google’s vision is all about the internet – putting all applications, all operating systems on to the internet into a format that it can control. That’s why it’s giving away operating systems.

Case in Point: The Android OS for Smartphones

That’s why the shift towards controlling the design of a tablet and not necessarily its manufacture, is a crucial change in the strategy in both tech giant’s strategies. The common denominator is that both are obviously inspired or, depending on how you see it, spooked by Apple’s success with the iPad. It all boils down to one key element, control. By controlling all aspects of the device, Apple is able to really infuse the iPad with a high degree of control and there’s a certain level of predictability that comes from that control. Microsoft devices, as it stands now, don’t leave Microsoft with much control. Hardware manufacturer can slap on all sorts of software on to the boxes or device they sell. With Google, the same situation applies. HTC’s handsets are quite different other manufacturer’s handsets although they both use the same Android operating system. Looking for a higher level of control in order to replicate the success of the iPad, both of these tech-giants have decided to move to the next level and possibly outside their comfort zone in order to get that control. That’s why we’re now looking at the Microsoft Surface and the Google Nexus. The only question left is, ‘Is this shift permanent? Or is this just an experimental phase for these tech players?’ The consequences are pretty scary for their hardware vendors. Microsoft has always played at the sidelines of its hardware partners. They take care of manufacturing the hardware and Microsoft supplies the software. It’s always been a convenient and heavily profitable partnership. Now that Microsoft has suited up to be a hardware player, this can only send shivers down the spine of its hardware partners.

As we have reported earlier, PC sales have been stagnant or declining. Hardware manufacturers are under a lot pressure because putting a Windows OS on their devices increases their price point. Considering the competitive pricing pressures from up and coming players or more established competitors, this has always been a key area of concern for hardware manufacturers looking to stay competitive and boost their bottom-line. Now, with the news of Microsoft rolling out its new tablet, it would not be unreasonable for these hardware manufacturers to see red flags. The same goes for Google’s smartphone and hardware partners. Many of their partners, in particular, Samsung, not only produce smartphones but also tablets. Now that Google is planning to roll out its own branded tablet, this might raise similar issues as Microsoft and its hardware partners. The next few quarters would really be interesting to see whether if this control strategy will be pursued further by these companies or if it is just one of experimental direction.

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