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Tablets point to strategy changes

A Microsoft rendering shows Surface, a tablet meant to compete directly with Apple’s iPad.

Associated Press

A Microsoft rendering shows Surface, a tablet meant to compete directly with Apple’s iPad.

Google and Microsoft are shifting long-standing strategies as they chase the success of Apple's bestselling iPad. Both companies have made their names by providing the software that powers devices made by others but are now following Apple's lead and releasing their own hardware.

Google jumped into the fray Wednesday with its Nexus 7 tablet. Made by Asus, the tablet bears the Google brand name and is made specifically to showcase Google's content. This approach has worked fairly well for Google's Nexus smartphones, which are aimed at Google's most dedicated users. At $199, the new 7-inch tablet will also compete with Amazon's Kindle Fire tablet.

Microsoft announced last week that it was releasing its own Surface tablet, a 10.6-inch device designed to compete with iPad and other high-end laptop replacement tablets — a rare hardware push from a company whose focus on software is in its very name.

The moves give the companies more control over products, providing a straightforward way to get their software and entertainment offerings into the hands of consumers.

"Apple showed everyone that the best end-to-end product is one that you design yourself," Motley Fool technology analyst Joe Magyer said.

Google and Microsoft's hardware partners should be watching the product announcements with a wary eye, analysts said.

"I'm worried if I'm Nokia or other critical Microsoft partners on mobile, because it shows Microsoft is willing to go it alone," Magyer said, adding that the same is true for top Google Android partners such as Samsung.

Technology watchers should expect more hardware products from Google, said BGC analyst Colin Gillis.

"This is Google's first toe in the water for tablets under their own flagship moniker, and there's going to be more to come," he said.

Analysts say it's clear that while hardware is a key piece of Google's strategy, its endgame is to hook users into buying its apps, video, music and e-books, looking to emulate Apple's success with its App Store and iTunes store.

"The real competition is not about the devices in the long run, but about Google Play versus iTunes," Forrester analyst James McQuivey said.

Tablets point to strategy changes 06/28/12 [Last modified: Thursday, June 28, 2012 9:46pm]
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