re: 6 Things Microsoft Must Do In 2013
Microsoft has a lot of issues. The biggest one is company understanding of the consumer market is, and has always been, poor. The reason why the XBox 360 has done seemingly well is because the PS3 was delayed by 10 months due to issues with the new, at the time, Blu Ray player. Then, the cost was higher than it was expected to be, so the 360 had somewhere to slip in.
But it was heavily discounted to below cost. The fact is that Microsoft has lost over $9 billion on the Entertainment Division since the first XBox came out. That includes profits from game licensing, etc., music and movie income, and all the rest. This is hardly a successful division. Sales are now down by more than half of the peak.
Other than that, they've had failures in all their other consumer products. The Zune, the Kin, Win Mobile, and others have all been failures. Now, the Surface, and Win Phone have been failing so far.
To say that some love Win 8, and others "not so much", is an understatement. "Hate it" would be closer to the truth. Apple has forced their hand here, and it's difficult to see what the future will be for Windows.
As far as losing money on Surface at a $399 price point, well, who knows if they are not losing money at $499? They lost money on the Zune, the XBox, and other products, such as Bing. Even if they're making some money on Surface (other than losses because of poor sales), lowering the price will force Win 8 tablets into a poor situation. As we all should know, you can't raise prices once they are low, as people expect computing prices to go down, not up. This is why Ultrabook sales were only 25% of what was hoped for in 2012. Windows products of any type can't compete at higher price brackets. That's a dilemma. So while $499 may be too high to be really competitive with the iPad, any lower will squeeze any possibility of profits out of the Win 8 tablet category altogether.
Microsoft really does have major problems, and they won't be going away with a simple fix. There may be no fix.