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Monday, November 20, 2017
 

The real reason the new iPad spells disaster for Microsoft. (It’s not the retina display either)

Microsoft has a competitor coming for the iPad, but it is too little, too late. The battle for the heart and soul of the tablet market is lost already and Microsoft is just spinning its wheels now.

It’s not the new iPad (3rd generation) that is putting the dagger into MSFT. It’s the strategy that Apple is taking by keeping the iPad 2 on the market at a reduced price. Microsoft used to beat Apple at the pricing game, those days are over now.

There is zero chance that we will see a product that can compete with the iPad 2 on specs and price now and Microsoft used to blow Apple out of the water on pricing. To compete, they are going to have to come up with a tablet at a $199.00 price point and that is not going to happen. Who in their right mind will spend more to but a Microsoft tablet with no ecosystem at a price point higher than an iPad?

They can no longer argue that the iPad is a toy as Windows 8 is… well a toy, especially on ARM where they may be able to sell at around $450.00 or $50.00 higher than an iPad 2 with a ecosystem that is mature.

Microsoft has one choice and it is the tact that it looks like Google is going to take to get their Play stores out in the world and that is to take the Amazon route and try to undercut on price. History says this is how Microsoft has done that, but these are not overpriced Apple computers where you get twice the performance on MSFT at half the price. Suddenly the situation is completely reversed and the price/performance is all in the favor of Apple.

So is Microsoft going to try to subsidize a tablet in the $250.00 price range? That’s what it will take to make a dent now that you can buy an iPad2 for $399.00 ($349.00 refurbished). We don’t see that happening. In fact it may get worse than that if Apple continues to drop the price of the iPad over the next several years.

The iPad 2 is going to put a serious hurt on Microsoft and since they have abandoned the enterprise with Windows 8, it may be time to run far away from Microsoft stock. Who is left as a customer for Microsoft in 2 years?

 

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