Tom Warren from The Verge gets it just right about Windows 8

In a new post on The Verge, writer Tom Warren hits the nail right on the head when discussing some of the challenges Microsoft will face when dealing with OEMS as they set prices for Windows 8.

In the post titled Microsoft’s ‘riskiest’ Windows 8 bet: hardware manufacturers, Mr. Warren says the following:

Microsoft is clearly positioning Windows RT as the choice for iPad competitors.

and

What we’ve seen so far suggests that neither OEMs nor Microsoft have anything that can compete with the iPad on wow factor or affordability just yet. Instead, there may be a mix of tablets, ultrabooks, and hybrids (a throwback to 2002) running Microsoft’s new operating system — offering what OEMs and Microsoft would call an alternative to the iPad.

Apple’s scale affords discount prices on bulk components, while its deft management of its largely Chinese supply chain keeps operational costs to a minimum. Lacking these advantages, Microsoft’s partners seem unable to match Apple in terms of price and quality — foregoing one fundamental for the other. In this way, Microsoft’s breadth of OEMs are a disadvantage, as they compete against each other for razor-thin profit margins.

and

If OEMs flood the market with cheap x86 Windows 8 tablets, then, like netbooks, this may increase market share — but at what cost to the end user experience of Windows 8? Ballmer was right that Windows 8 is risky, in more ways than one.

I have written about OEM’s and the problems that potentially lie ahead for Microsoft before.

Last November in a post titled Microsoft will need to police OEM’s when Windows 8 is released, I wrote the following:

….I think for Windows 8, Microsoft needs to go a step further.

Since they don’t make all the hardware that will be released during the initial rollout of Windows 8, they need to influence vendors to make Windows 8 really shine on their debut hardware.

In order to make this rollout super successful, I believe that Microsoft should be firmer with OEM’s than they have been in the past. Large OEM’s should be encouraged to make sure that Windows 8 runs on superior hardware at least for the first 6 months of the rollout.

and

I know that Microsoft are doing their best to make sure that Windows 8 is able to run onWindows 7 requirements and I’m sure that give or take that will be true. However, there will be a lot of pressure on Windows 8 devices to be slick and glitch free for the first few months.

We need OEM’s to make sure they don’t screw up perception.

To me this is really simple.

In order to make sure that the public have a good impression about Windows 8 and Windows RT upon release, Microsoft need to address both performance and pricing.

Pricing

In 2013, as they are prone to do, Apple may release an upgraded iteration of their iPad or a smaller version of the device. This will drive pricing for those devices (older versions) to the $250 to $299 range.

Let’s get serious – that will be the standard.

Very few people in a tough economy will walk into a store (or look on Craigslist) and bypass an Apple Tablet at $300 for a Windows 8 Tablet at $500. It-Wont-Happen.

Performance

Likewise, these savvy consumers expect devices to be at least as fast as iPads and as cheap.  This is the ultimate unfair dilemma for OEM’s who are dealing with razor thin margins already.

What should Microsoft do? Think outside the box.

They should do the following:

  1. Take a 1 year licensing loss on all Windows RT tablets for the first year. Yeah, do the Xbox dance and make it a loss leader.
  2. Make the Windows RT performance requirements higher for OEM’s. Yeah they’ll bitch and moan about how much money they’re losing so Microsoft should
  3. Subsidize premium Windows RT partners for 6 months. Walk the walk and give them money. Show them how important this is.

It’s not rocket science.

You can’t claim on one hand to be changing the industry and changing the face of computing with this radically new OS and then play by the same old myopic simple P&L rules.

Windows RT needs to blow the iPad away at the $250 to $500 range. It needs to be stunningly fast and affordable.

There is simply no compelling reason to buy this tablet (as a consumer) otherwise.

My gut tells me with Windows 8, Microsoft won’t get a second chance to make a first impression.

What do you think?

Please Leave Your Comments Below...

  • ecm2

    Have they not learned this lesson from the ill-fated HP Touchpad (WebOS)?

  • 1stkorean

    If windows 8/RT turns into another Windows Vista and goes belly up…Ballmer is finished and Microsoft will do such irreparable damage they might not fully recover.  Furthermore if W8 fails it will push the Android OS higher than what it is now.

    • http://www.windows8update.com/ Onuora Amobi

      It would be bad for 2013 and the PC industry for sure…

      • 1stkorean

        I agree and this global economy cannot afford that.

      • http://pulse.yahoo.com/_5WJGC7242GFDP2QXANKF5WTMEA Rex

        I think you are reading too much into it.  Sales of PCs will be affected primarily by the economy and PC pricing, not due to the popularity of the OS.  A difference this time around is that manufactures are on the windows 8 bandwagon.  In Vistas day they were anxious from the outset and pushed to continue selling XP.  This actually had a profound instant effect on the perception of Vista to the consumer.  Right now, the average joe does not know about the Windows 8 controversy.  If Windows 8 works and Manufactures provide it at reasonable prices, people will buy it if they want a computer.  If the majority then take it home, the tutorial does its job and people accept Windows 8, most of this hoopla is over nothing.  I dont take anyones predictions of how it will do seriously.  Two key elements are missing at this point which will define the acceptance or refusal of the consumer.  That is marketing and the tutorial. 

    • http://pulse.yahoo.com/_5WJGC7242GFDP2QXANKF5WTMEA Rex

      I dont think it matters if Windows 8 is compared to Vista and here is why.  Windows 8 will never sell in the numbers that Windows 7 is.  This is a simple fact that no one should dispute.  Yet put this with the controversy and it will be compared to Vista no doubt about it.  Apple will market it this way as well, (it is the smart thing to do).  But this is not the way to measure Windows success or failure.  Windows 8 should be measured in its connection to how Windows Phone and Windows 8 mobile devices sell.  I am specifically not saying the word tablet because of the misconeptions that brings.  For example, is a convertible device with touch screen and Atom processor a tablet, or are only ARM devices tablets?  Yet the sale of the previous would just as likely  equate to someone not buying an iPad as someone buying the ARM tablet which is the direct competition of the iPad.  I would say if Windows PCs sell as much as Vista, Windows 8 Phone hits 10% market share, Windows 8 and RT mobile devices hit 40% market share, Windows 8 will be doing fine.  I consider these numbers to be important because these are the minimum numbers neccessary for MS to be considered relevant in each genre.  This is my expectations, and I doubt I will be disappointed.

    • hafenbrack

      Vista sold over 300 million copies (around as many iPhones have sold to date, but in less time) so how can it be said to have gone belly up. While it wasn’t as succesful as Win7 or XP it certainly was not a total failiure.

  • techblogger

    My question is more basic. Is the op an OEM? No disrespect but nothing in this analysis seems even remotely like anything I’ve seen, read or discussed in meetings where OEM’s were present. So im saying that to say this, much of what this sounds like is marketing and not from a market point of view either. But a speculation based on operating system bias rather than any of the things I know OEMs wrestle with. Again, no disrespect intended.

    • http://www.windows8update.com/ Onuora Amobi

      No disrespect taken.

      Could you spell out some of the concerns that OEM’s have that are not covered here?

  • Rikikrik

    What a load of crap. W8 tablets cannot be compared with Ipads, because W8 will offer more functionalities for enterprises and consumers alike. The usability and functionality factor is not taken into account when comparing a W8 tablet with the Ipad. The Ipad is mostly an entertainment device, while the W8 tablet will also be a real productivity device. For enterprises this is what counts mostly. Ease of integration with already excisting Windows applications, synching across devices and platforms, security, quality, the hybrid character (PC and tablet in one) of W8 devices and reliability are why enterprises and businesses are prepared to pay a higher premium for W8 tablets than for an Ipad. Don’t compare a Volkswagen (which means a car of the people=Ipad) with a Porsche  (W8 tabelt/PC). Microsoft itself does not make a distinction between tablet and PC anymore, so it is not a fair comparison. Price is and will not be the factor that determines whether you buy a W8 tabelt or an Ipad. As a consumer I myself have refrained from buying an Ipad because an PC/tablet combination is prefered by me and cheaper than buying an Ipad and PC apart. The price factor in this case does not apply and supports the W8 strategy of Microsoft. Fast performance is another crappy argument which is mentioned here. With Intell chips operating W8 their is no doubt about the speeds of W8 which will be phenominal. W8 is also not an isolated product (like the Ipad), it’s a seemless integrated product with Xbox, PC, Tablet, TV, WP etc and a lot of services (Cloud, Office 365, Lync, Skype, Sharepoint CRM, Skydrive, Windows Azure Servers, business applications etc) for enterprises and businesses. This is the difference between an Ipad and a W8 tablet/PC, W8 is a win win for people and enterprises wanting an integrated PC/tablet.

    • http://www.windows8update.com/ Onuora Amobi

      On the other hand I am sick of PC lovers talking about how people want to spend money on a tablet that is a PC as well.

      The truth is the iPad has sold more than any other slate in the category.

      That is proof of what people want.

      Any other theory about what people are looking for is admirable but is basically an untested theory.

      If Windows 8 Tablets are flying off the shelves, you will be proven right. If they don’t, there will be no more excuses.

      When you look at empirical evidence, you look at what already exists and why that works.

      Time will tell…

  • Rikikrik

    Another argument against pricing being an important factor compared with the Ipad. Windows 7 has already sold more that 600 million licenses in a few years, while there are 1.3 billion Windows users world wide. Businesses which have not already stepped over to W7 will opt for W8. That leaves about 700 million users. W7 and W8 will coexist for a few years, but that’s not such a problem at all for Microsoft. Vendors like Acer, Fijutsu, Dell, HP, Samsung, Lenovo, Huwaei and others will be pushing W8 PC/tablets hard. Compettition will bring down prices real fast. This also is why I do not see how pricing can be a problem. I would advise T. Warren to come with a better argumentation. 

  • Michael

    I have not had a need for a tablet before. But now I am seriously considering buying an iPad just to tell MS how much this new OS sucks!

    • The_Norseman

      So in your expert opinion, not having even tried it on a tablet, you’ve already condemned it.  Very objective of you.

      • Michael

        Not at all against a metro tablet, the problem is they have ruined the desktop with it as well.

        Metro Tablet – Yes/ Metro Desktop – No, no, no!

        But the real issue for me is what they are doing in other areas in order to capitalise on this Re-Imagination (they are really re-imagining how to tap into your wallet). For example, forcing apps to be installed thru the MS Store.

        • The_Norseman

          They’re just doing what Apple and Google are already doing with the app store.  You can still install non-metro apps the same way as always.  The desktop hasn’t really been ruined.  The only difference really is that the start menu is now the metro gui and the charms bar on the right side.  I can still do everything I was able to do with the classic start menu.  Once you figure out the navigation and wrap your head around metro being the start menu, it becomes quite natural doing various tasks with both metro apps and desktop apps both with a mouse/keyboard and touchscreen.     

          • Michael

            But you can’t install Metro apps outside of the store….. not even your own apps that you want to share with your friends and not the world – Its called monopoly!

            The desktop is ruined not due to the loss of the classic start menu, but because of all the dumbed down icons and flat scroll-bars that are meant for a metro interface – they look totally out of place on the classic desktop.

          • The_Norseman

            Your options then are Android, Apple or Linux, all of which have their own advantages and drawbacks.  In my case, there are more advantages than disadvantages to using Win 8.  And it’s not like Win 7 is going away, right away.  Win 7 SP1 has mainstream support until 2015 and extended support until 2020.  End of sales hasn’t been set yet, probably will depend on how well Win 8 does.

          • Michael

            Hmmm, it seams you totally miss the point.

            MS is doing a backflip on all its past concepts…

          • The_Norseman

            Not missing the point at all.  You’re talking about ideology, I’m talking about business decisions.  They are after all in business to make money. The industry is changing and they need to change with it or eventually become irrelevant.  They’ve looked around and see what’s working and what isn’t and are going with what’s working.  IE, Apple’s extremely successful and profitable app store business model.  

            This business model has also doubled as a way to keep malware and poorly written apps  from getting onto Apple devices.  It’s been shown that Apple OS’s aren’t necessarily any more secure than the most recent Windows versions, but it’s a lot more difficult to get bad apps onto them in the first place because of the vetting that Apple does before they’re made available.To be sure, this is a drastic change for MS and they may or may not succeed but they have to do something.  Continuing on the path they have been has no longer been working for them.  Mobile devices, touch screens, integration between multiple devices, better security and cloud computing is where the industry is going.

          • Michael

            But you don’t have to force people to buy software made by other people to stay in business. If the OS is good it will sell itself.

            Their success should be a result of innovation, remaining loyal to your current customer base, and staying true to past principles.

            If MS can succeed only by milking other software developers – either those who make a business out of programming, or those (And especially those) who code for fun then they have already failed.

          • The_Norseman

            How are they forcing anyone to do anything?  By keeping the desktop and all the essentials of the desktop while trying to also move forward, they are remaining loyal.  But they’re also dealing with the reality of a changing industry.  Those who don’t like the changes are free to stay with Win 7 or move to another platform altogether.  

  • The_Norseman

    So 67,000,000 iPads as of April 2012 and somewhere around 50 million android tablets. 1.3 billion Windows machines. My opinion, a good number of those 1.3 billion who weren’t interested in using current tablets because they aren’t compatible with what they use on their desktops will become interested once Win 8 and all the various iterations of tablets, hybrids and convertibles start coming out. I’ve been playing with Win 8 Preview Release on an Acer Iconia W500 tablet which comes with a keyboard dock and while I really didn’t like it at first, as I’ve gotten to know my way around, I’m really starting to appreciate it. Being a convertible, I can test it as a desktop and as a tablet so I’ve got a pretty good idea how it works on both platforms. Of course only time will tell how well it’s going to do but I think it has a pretty good chance of succeeding.

  • Ben

    Well i am afraid i just cannot take anymore of this seemingly one sided view on MS, i am unsubscribing due to the opinionated reviews i mostly read here.

    • The_Norseman

      What are you talking about?  This is an opinion piece and I see opinions both pro and con here.  Could the problem be you don’t like those opinions you don’t agree with?

    • http://www.windows8update.com/ Onuora Amobi

      So saying Microsoft should do something specific to be successful is one sided?

  • http://reflectionspn.wordpress.com/ Pratyush Nalam

    Perfectly said