Nine months ago, back when the flattening of iPad sales had not yet become obvious and when the majority of analysts were predicting tablets to soon imminently replace notebooks, I wrote quite a bit about Microsoft (in Japanese).
In summary, I wrote;
破壊的イノベーションが成功するかしないかの最大のポイントは、既存のトップ企業が、まだ間に合ううちに反撃に出るかどうかです。間に合うかどうかというのは、新興の企業･製品が十分に既存製品を代替できるところまで進化しているかどうかにかかっています。つまりスマートフォンとTabletが十分にパソコンを代替できるかどうかです。十分に代替できるところまで来ていれば、Microsoftは反撃のしようが無くなります。しかしそうでなければ反撃が効きます。
The largest factor determining whether a disruption succeeds or not is whether the incumbents respond in time. “In time” is defined by whether the entrant product has evolved to the point where it can fully replace the incumbent. In the context of Microsoft, it is defined by whether the combination of a smartphone and a tablet can replace a PC. If the answer is yes, then Microsoft cannot retaliate. Otherwise, a counterattack will still be effective.
Tabletについては、まだまだパソコンを代替できていません。特にAndroidは7インチに偏っていて、娯楽に完全にフォーカスしています。Tablet市場がパソコンを使って仕事をする方向に向かっていません。これではなかなかパソコンは代替しないでしょう。
Tablet still cannot replace PCs. In particular, Android tablets are skewing towards 7-inches and are focusing on entertainment. The tablet market is not moving towards doing work. Hence, tablets are unlikely to replace PCs.
反撃にいったん出れば、既存のトップ企業はそうそう負けるものではありません。Microsoftの場合、まだ間に合う気がします。
Because of the vast resources they can deploy, incumbents rarely lose once they retaliate in time. In the case of Microsoft, I think they still have time.
Apple has released their sales figures for 1Q2014 and the sales of the iPad have clearly flattened. Although iPad sales volumes (~ 20 million units) are still very impressive, at this level, it does not look like they are on a trajectory to replacing PCs.
So Microsoft still has time.
In fact, the new Surface Pro 3 clearly shows that Microsoft understands this. Instead of launching a hastened response to the iPad which was the original Surface RT, they have launched a product that attacks from their dominant strength in PCs and office productivity software. They have realized that laptops are not going to be replaced by tablets any time soon, and that sales of Windows laptops will continue to surpass the sales of iPad-like productivity tablets. Hence their dominant power, although weakened, will still be a formidable asset for the foreseeable future.
So instead of starting afresh, they are playing their strengths and using their resources wisely. Instead of attacking tablets head on, their plan seems to be to embrace and to internalize tablets into their laptop products.
This clearly makes sense.
Of course, it will take time. But Microsoft has realized that it has time.
Naofumi Kagami 