July 31, 2013
The Microsoft Tablet Disaster was so easy to Predict
Well, that was quick. Nine months ago, Microsoft made a big deal about getting into the Tablet business. And now nine months later, Microsoft is writing off $900 Million worth of Tablets that have been occupying a warehouse. Not only the major write off, but now that the outlook and confusion of what’s next for Microsoft looms, the stock price dropped 10%, losing $30 Billion in market value. Ouch.
I hate being right!!! I just hate it. The reason I hate it, is because it seems like the obvious should be obvious to everyone. This tablet launch just had disaster screaming all over it. Sometimes the answers are so obvious, yet people are blinded by not asking the right question. They just go ahead with wrong answers. For Microsoft, they missed a bunch of right questions?
Q: What business are we in?
A: We do software really well. Especially when we are in a monopolistic position. We kinda suck at hardware. Did you see what we did on Zune? That wasn’t pretty.
Q: Do we have a leap-frog technology? Is the Microsoft Surface product better, different or cheaper?
A: Not really different. It’s like a really nice iPad with a very bad and cheap plastic lid. And better? Well it is better than a tablet, which people use for fun. But it’s nowhere near a Macbook Air which people use for work. So we’re better than one and worse than the other. We’re a bit confused but we hope the consumer gets it. And we are going to charge a significant premium, because we are Microsoft and we always do. So I guess it’s not really better, cheaper or different. But, we have lots of resources and stores of our own. Well, not a lot of stores, and they aren’t very crowded. But we hope this does well?
Q: Will it be pretty easy to communicate the point of difference?
A: Not really easy. We are going to do ads with geeky people dancing and closing the lid. A lot. People might think they are laptops. But we’ll press the screen so they know it’s like their iPad, only it has a lid. We won’t try to out-cool Apple. We’ll try to be cool, as in “the coolest kid in the Science club” kind of cool.
Q: Apple is already on their 4th tablet and likely has 3 years of incremental innovation in the pipeline? Samsung Galaxy is an amazing product and they are killing it on cool innovation. Do we have any R&D innovation beyond the initial launch?
A: No. Is that a problem?
Q: If we are so good at software, and the world has moved to Apps, which is sort of like software, why don’t we take all our energy and expertise in the software business and start applying that to Apps?
A: Wow, that’s a good question, but we’ve already ordered the plastic lids for the Tablets. Why don’t we do both. But truth be told, we kinda suck at Apps.
These questions would have allowed us to look at the vision, promise, strategy, story, freshness and culture that would showcase how ill prepared Microsoft was for the Surface launch. Here’s an example of how a brand like Special K uses the promise, story, freshness, and culture to help guide their brand.
Answering these 5 questions also helps to map out the Microsoft Brand Strategy Road Map. It might also highlight how wrong the surface is to the overall Microsoft brand. Here’s an example of what the Brand Strategy Road Map looks like.
Predicting Disaster Was Pretty Easy
In the spirit of predicting this disaster, I wrote a story last June on the how the Microsoft Surface would be a disaster. Like I said, I hate being right. Click on the story below:
At the time, the response i got back was 50/50, with half of the people criticizing the Microsoft Surface launch and the other half criticizing me for criticizing the Surface launch. I always figure 50/50 is a good ratio to stir the pot. But, I was starting to think I might be going overboard on being an Apple lover. Here’s a summary of my view.
Getting into the Tablet Business Feels like Zune
Getting into hardware is a big gamble and not something that fits with Microsoft’s strengths. To be a success, you either have to be better, different or cheaper and this feels like none of those. Just like the Zune, it feels as though they are late and aren’t really offering anything that’s a game-changer to the category. Like most categories at the stage where tablets are, until someone really shakes it up, the next few years are likely all about constant small innovation, new news each year with Apple leading the way on the high-end and Samsung’s cost innovation will likely squeeze Microsoft right out of the category. The analysts are so excited by the launch that the MSFT stock price is down 1.3%.
The Best Strategic Answers Start with the Best Strategic Questions
To read more on How to Write a Brand Plan, read the presentation below:
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