When you cover tech news for a living you learn a lot about the business decisions of major tech companies. And eventually you ask yourself “do they really know what they’re doing”? While advanced tech (and solid marketshares) keep companies like Microsoft ahead, sometimes it feels like the execs in charge are pushing in the opposite direction. In light of Microsoft’s recent fall from grace, their latest decision makes us wonder just who’s in charge of making these ridiculous decisions.
Some business decisions aren’t that difficult to make. Like, for example, how many “widgets” a billion-dollar company should produce. The natural question that follows is “how many ‘widgets’ does the market demand?” And then you produce accordingly. Seems simple enough, right?
Maybe not. When the executives at Microsoft decided to produce 3 million of their Microsoft Surface tablets, clearly no one asked the relevant questions. In fact, they couldn’t have possibly known what the demand was because no one’s tried it out yet.
That’s a frighteningly large number of tablets. And beyond that, its a number that doesn’t make sense for several reasons. In today’s tech-heavy market, product cycles are ridiculously short. In about 6 months, the next new thing is out or coming and buyers lose interest.
That’s not very long to move 3 million products. Especially when you consider the fact that Microsoft only has around 30 brick and mortar stores and an online shop that virtually no one ever visits.
If you stick hard to the six month rule, customers will have to buy a Microsoft Surface tablet every three minutes for every 10 hours of opening time at each brick and mortar store to sell 3 million in six months. If you give them a year, that’s one every 6 minutes.
That’s ridiculously optimistic, especially when you take demand into account. Microsoft hasn’t been doing so well on that front. In fact, their wavering sales just dropped them out of their long-held spot as the #1 most valued tech company. And no one seems to want anything carrying Windows OS no matter how cheap they make the phones. But that may be a window into their plans.
Maybe Someone Is Behind the Wheel After All
One of the ways that Microsoft is pushing its barely third tier OS is to make the devices that carry them super cheap. In China and Africa, for instance, Nokia Windows Smartphones can be had for next to nothing. And even here, handsets like the Nokia Lumia 900 go for bottom barrel prices. And we think the same will be true of Microsoft’s Surface tablets.
That’s great news for consumers. No matter your qualms about Windows OS, it will be hard to put up any argument at dirt cheap prices. And when things are priced to move, they generally do. Those of you who wouldn’t otherwise buy a tablet might be tempted. You might even find out that you like Windows OS which may be what Microsoft is going for.
Touché tech company, touché. Maybe the ins and outs of the business world are more varied than sarcasm can give it credit for.