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Will Enterprise Customer Opt for Microsoft Surface Tablet over iPad / Android ?

October 23rd, 2012

PC Demand continues to suffer from a shift in preference for touch-based tablets with light weight, instant on, long battery life. There is also a need for a more functional device for many users that currently use Windows and Office so notebooks are still widely used, complemented by tablets.

Microsoft’s Surface Tablet running Windows is available on sale at limited pockets. If Microsoft were to deliver some Office capabilities on the iPad, it might help sustain higher prices for tablets from Microsoft and Apple and while this could help Apple cannibalize Windows, if done in a way that minimizes this but enables the workgroup collaboration to reach across the divide and address Apple users this could be market enhancing for the adoption of the new Windows and Office platform. But How can Microsoft achieve this ? Microsoft has a Strategy to Sell Surface Tablets for Enterprise Customers.

There is likely growing cannibalization by tablets for those users that have less need for Office or the need to type longer documents that can be more cumbersome on a tablet. The general trend suggests that many users in the United States leave the notebook behind and make do with the tablet when possible, thus at a minimum Notebook still find a place on table.

Microsoft will price the Surface so the hardware component is near break-even from a gross margin perspective, with the Windows 8 operating system contributing to gross profit the same as if it had been part of an OEM device sale. Microsoft will likely choose to price its products so it does not lose money and appear to be subsidizing its hardware business with its operating system profits and will also then realize the high margin revenues for the pricing of the Windows 8 OS and Office included on the Win RT version.

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