For the first time ever, Microsoft will offer a computer of its own creation
Nick Wingfield
For decades, Microsoft has made the software that runs a majority of the world?s personal computers, leaving a gang of outside hardware companies to design the machines. Apple, its rival, makes it all. Microsoft is about to concede that Apple may be onto something. On Monday, Microsoft is expected to introduce a tablet computer of its own design that runs a new version of its Windows operating system, according to people with knowledge of Microsoft?s plans who declined to be identified discussing confidential matters. It is the first time in the company?s 37-year history that it will offer a computer of its own creation. The device is aimed squarely at Apple?s blockbuster iPad, which has begun to threaten Microsoft?s hegemony in the computer business.
Microsoft?s move is another example of how Apple has demonstrated that the most effective way to create easy-to-use consumer gadgets is by building the whole package ? upending the longstanding practice in the technology industry of companies? devoting their energies to either hardware or software. Google, too, has made a big concession to Apple?s approach, signaling with its acquisition of Motorola Mobility last year that it will also design its own devices.
For Microsoft, the decision to make its own tablet would once have been almost unthinkable. Microsoft swallowed the PC market in the 1980s and 1990s by letting any hardware maker pay licensing fees to put Windows on its machines. That business was so lucrative for Microsoft that there was no reason for the company to make its own PCs and compete for computer sales with its own partners. The stunning success of Apple, now the most highly valued company in the world, has shown its rivals that they can no longer rely entirely on the business models that were so successful during an earlier era of the tech industry. With the iPad, Apple coupled hardware and software together in an elegant package, producing longer battery life, a more responsive touch screen and other features competitors have not been able to match. ?If it?s true that Microsoft is going to produce its own tablet, it?s a major turning point for the company and shows just how breathtakingly the landscape has changed in a just a few years,? said Brad Silverberg, a venture capitalist in Seattle and former Microsoft executive, who said he had no knowledge of the company?s plans. ?The stakes are enormous.?
In the smartphone business, Google initially followed Microsoft?s playbook by making its Android operating system available to any hardware maker who wanted it, a move that helped turn Android into the top operating system for smartphones. The search company?s hardware partners were far less successful, though, in selling Android tablets to the public, which were often criticised for being inferior to the iPad. Last year though, Google announced plans to pay $12.5 billion to acquire Motorola Mobility, a maker of Android smartphones and tablets. That deal, which was completed last month, was seen as a big shift in strategy for Google that will help it create better Android smartphones and tablets.
Microsoft and Google are not entirely embracing Apple?s approach. Even as they design their own devices, they both will continue to make their software available to hardware companies.