Microsoft (NASDAQ: MSFT ) has made serious strategic miscalculations during the
past five years. The plan to date: Show up to the party fashionably late, then
make a grand entrance while the rest of the technology industry stands and
applauds. That was how the company approached the current smartphone market.
Apple s (NASDAQ: AAPL ) iPhone grew into the market tidal wave it is now from
2008 to 2010 while Google (NASDAQ: GOOG ) spread its Android operating system
through an industry of manufacturers ready to release their own Internet-ready,
touchscreen devices. At the same time, Research In Motion (NASDAQ: RIMM ) and
Nokia (NYSE: NOK ) started to watch their mobile empires decline. Microsoft,
watching its own Windows Mobile 6 flounder in this smartphone ecosystem, sat
back and waited. Then Windows Phone 7 devices hit the market at the end of 2010
and no one cared. The company wasnt fashionably late just late. The question
for investors now: Is Microsoft repeating history with its tablet plans? A
Thursday report in the Korea Economic Daily cited an industry source that
claimed Microsoft finally is ready to reveal its plans for the tablet market at
the companys BUILD Developers Conference sometime between Sept. 13 and 16.
Windows 8 the next iteration of the companys ever-present operating system
designed to operate smoothly on both home PCs and mobile devices alike will be
the centerpiece of the companys tablet initiative. The manufacturer Microsoft is
bringing as its first date to the tablet party is none other than Samsung (PINK:
SSNLF ), which was, as canny investors might recall, the first company to
release a major Google Android tablet to retail in 2010. Of course, Samsungs
tablet business has been struggling with more than just the popularity of Apples
iPad. Apple has targeted Samsungs entire mobile business with lawsuits around
the world, claiming that both Galaxy smartphones and tablets infringe on patents
held by the Cupertino, Calif.-based company. So far, Apple has moved to block
Samsung from selling its current tablets in not just the United States but
Australia, Japan and most western European countries. Microsoft then represents
a marvelous opportunity for Samsung to realign its prospects in the tablet
market teaming with a $217 billion technology company that controls its own
library of precious technology patents (hopefully enough to hold off more
infringement) should provide a more stable presence in the tablet market. How
does teaming with Samsung help Microsoft, though? When Samsung released the
original Galaxy Tab at the end of 2010, it reportedly sold around 2 million
tablets a fraction of Apples iPad sales, but not a terrible showing. Early this
year, word came out that many of those Galaxy Tabs were being returned , and
retailers couldnt unload purchased stock. Now with the Galaxy Tab 10.1 Samsungs
second major entry into the market being blocked from sale in many places, its
hard to gauge what kind of power the brand will give Microsofts tablet efforts.
The burden of pulling consumers away from Apples iPad then falls to Steve
Ballmers International House of Windows. Without knowing just what Windows 8
will be able to do to differentiate itself from other mobile offerings, its
tough to say whether it can find an audience through features alone. Solid apps
and decent technology havent helped Hewlett-Packard (NYSE: HPQ ), RIM or
Motorola (NYSE: MMI ) find success in the tablet market. In fact, at this point,
low prices seem to be the only way to really find tablet buyers not interested
in an iPad . Unless Microsoft and Samsungs fancy new device can significantly
undercut the iPad while matching or surpassing its feature set, being late to
the party will be the least of Microsofts worries. As of this writing, Anthony
John Agnello did not own a position in any of the stocks named here. Follow him
on Twitter at
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