An invitation to an event in Los Angeles on Monday evening sent out by the software giant at the last minute on Thursday to a broad range of journalists – but lacking even venue details – has led to widespread expectation that Steve Ballmer’s company is now ready to take on Apple’s dominance in the tablet market.
It would be a dramatic break from Microsoft’s usual moves in computer hardware, where it develops the software and licenses that to hardware makers to ensure the broadest possible market.
That strategy has led to Windows having a 95% share of the PC market, comfortably earning the Redmond-based company billions in licensing fees every quarter.
But some analysts feel that Microsoft is now ready to act, having fallen behind both Apple and Google in the fast-growing tablet market – which is already one-eighth as large as the PC market and forecast by the researchers Gartner to be 40% as big by 2016.
Just as importantly, the fastest growth in tablet sales is in western countries, where PC sales are slowing, leading to lower sales in the Windows division in four of the past six quarters.
A Microsoft-branded tablet would be a risk but one the company may feel is necessary. It has been developing its own technologies for tablets, and Windows 8, to be released this year, is designed to be used on a tablet as well as a desktop PC.
“If Microsoft wants to control the entire user experience and the entire quality of their products, they have to build their own hardware,” Michael Cherry, an analyst at Directions on Microsoft, a Redmond-based market research firm, told the Bloomberg news service.
Michael Gartenberg, of Gartner, said: “The idea would be to make sure Microsoft’s vision for such a device is translated exactly into the consumer experience without a third-party interpretation.”
Microsoft has already reportedly banned Taiwan’s HTC from making a Windows 8 tablet because it did not agree with HTC’s plans to modify the main screen.
The location of Monday’s event, near Hollywood, hints that Microsoft is also ready to announce a content deal using its new SmartGlass app, announced at the E3 games conference earlier in June.
Microsoft sees SmartGlass as a way to bridge the gap between the TV and the smartphone or tablet. SmartGlass would let users control the content on their TV set, via their games console, on a tablet in their lap.
Microsoft has already demonstrated this with the hit series Game Of Thrones, where while a TV episode was playing, a tablet could show details of the world of Westeros in which the action takes place.
Other speculation is that the tablet will include an ebook store using Barnes & Noble’s technology, following a $300-million deal made at the end of April.
The timing of the launch would also spike Google’s guns.
The search giant is expected to unveil an own-brand tablet at its Google I/O event on June 27 – the same day that Microsoft has planned for a worldwide unveiling of its new Windows 8 software that will be available by the end of the year.
By showing off a tablet with content deals before that, Microsoft would pile expectation on Google that it might struggle to match.
Microsoft’s forays into own-branded products have had mixed success. The Zune music player in 2006 – developed on Ballmer’s order – failed to dent the iPod’s success, while the Xbox games console cost billions to develop and market, and generates only modest profits compared to Windows and the Office suite.
Microsoft has declined to comment formally on the content of the announcement. The invitation says: “This will be a major Microsoft announcement – you will not want to miss it.”
Although Microsoft introduced the tablet form factor in 2001, it languished with low sales until Steve Jobs unveiled the iPad in January 2010 – since when Apple has dominated the sector, with more than 60% of the market on its own, and the remainder shared between dozens of other companies.
Worldwide, tablet shipments will hit 107.4-million this year, up from an earlier projection of 106.1-million, said the researchers IDC.
That could grow to 142.8-million in 2013 and 222.1-million by 2016, the company said.
Before the announcement, IDC is predicting that the iPad will account for 62.5% of global shipments this year, up from 58.2% last year. Apple’s share could rise even further if it introduces a smaller, less expensive tablet, IDC said.
While the tablet market often looks promising, it has also been the downfall of a number of companies, with HP spending roughly $2-billion on its TouchPad, which was withdrawn from sale just over a month after launching in mid-2011.
RIM, maker of the BlackBerry smartphone, has written off nearly half a billion dollars on unsold stock of its PlayBook device, and is expected to make further writedowns for the fiscal quarter to the end of May. – © Guardian News and Media 2012