Apple and Microsoft have been rivals for over three decades, dating back to the early days of Steve Jobs and Bill Gates. Microsoft positioned itself at the top of Silicon Valley right through until the early 2000s, when Apple emerged from near bankruptcy and went on to become the world’s most valuable company thanks to its success in iPod, iPhone, iPad and Mac. Since then, Microsoft has somewhat faltered and went through a rather dismal few years. All fingers are pointed at Windows Vista.
In the past year, however, Microsoft has reemerged as a true competitor with Apple by sharing similar business tactics that the Cupertino-based corporation uses. Microsoft took a radical departure away from its manufacturing vendors and released its own Microsoft Surface tablet, giving it full control over both the hardware and software experience. Sounds like Apple. Better yet, the Surface has a high profit margin of 43% on the $499 base model. Again, sounds like Apple. And it’s working for Microsoft.
“The Surface represents a key element in Microsoft’s strategy to transform itself from a software maker into a devices and services provider,” said IHS analyst Andrew Rassweiler. “Key to this strategy is offering hardware products that generate high profits on their own, similar to what Apple has achieved with its iPad line. From a hardware perspective Microsoft has succeeded with the Surface, offering an impressive tablet that is more profitable, on a percentage basis, than even the lucrative iPad based on current retail pricing.”
It is an exciting time for Microsoft with the recent launches of Microsoft Surface, Windows Phone 8 and Windows 8. Microsoft might even take the integrated hardware and software concept one step further by releasing its own-brand smartphone in the near future. Microsoft already has a mobile platform in Windows Phone 8, so now it just needs its own hardware. A third competitor in the mobile landscape will be positive for consumers, since longtime leaders Apple and Google are going to be forced to innovate even stronger to thwart off Microsoft.