Steve Ballmer sheds light on Microsoft Surface Pricing and Microsoft's long term positioning

Seattle times where he talked about Microsoft, Windows 8 and their new upcoming tablet device – the Microsoft Surface. Some of the quotes from that interview: Regarding the Microsoft Surface

Q: The iPad has the largest share of the tablet market, but its soft spot, it seems to me, is the price.With the Surface, are you planning to compete with the iPad on price or on features? A: We haven’t announced pricing. I think we have a very competitive product from the features perspective. … I think most people would tell you that the iPad is not a superexpensive device. … (When) people offer cheaper, they do less. They look less good, they’re chintzier, they’re cheaper. If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle (Kindle Fire, $199) to do their homework? The answer is no; you never would. It’s just not a good enough product. It doesn’t mean you might not read a book on it…. If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800. That’s the sweet spot.

It seems like the Microsoft Surface may be a $400 to $500 device. Not quite sure what to make of that at this point. I think that price may fly depending on whether that comes with the keyboard case or not. Once again, he’s predicting a big number of PC’s sold over the next calendar year.

People talk about: “How healthy is the PC market?” There’s going to be close to 400 million PCs sold in the next year, which makes it a big market. And whether it’s 405 (million) or 395 (million), it’s a big market, and Windows 8 will propel that volume. It also brings us into this world of much more mobile computing and more mobile form factors. I think it’s going to be hard to tell what’s a tablet and what is a PC.

I think the most interesting quote though was how he plans to redefine Microsoft as a company going forward. Regarding the positioning of Microsoft

Q: Where do you see Microsoft’s position in five years, 10 years? A: First of all, I’d say: pre-eminent technology company. I think that in a back-looking view, people would say we were a software company. That’s kind of how we were born. I think when you look forward, our core capability will be software, (but) you’ll probably think of us more as a devices-and-services company. Which is a little different. Software powers devices and software powers these cloud services, but it’s a different form of delivery…. Doesn’t mean we have to make every device. I don’t want you to leap to that conclusion. We’ll have partners who make devices with our software in it and our services built in. … We’re going to be a leader at that.

There you have it folks. Microsoft will be a devices and service company going forward. I think that is visionary and makes perfect sense. Windows 8 is clearly the first step towards re-positioning Microsoft for the future. Just a few more days…]]>