There has been a lot of speculation lately on the potential impact of Microsoft’s investment in the Nook following its being spun off of the main body of Barnes & Noble. The sentiment seems to center around the idea that nobody can hope to compete with the iPad at the same price right now, so the Nook may offer Microsoft a chance to put out a nearly in-house budget tablet to improve market exposure.
The main comparison that people are jumping on right now is Google’s new Nexus 7 tablet. This is undoubtedly the most advanced Android device in the price range by a fair margin. It boasts the most recent update to the operating system, Android 4.1 – Jelly Bean, as well as some powerful hardware. Users get to enjoy a 1280 x 800 IPS display, quad-core processor, and much more for only $199. The Kindle Fire, currently the Android tablet market leader, will be lucky to recover from this introduction even with an update reportedly on the way from Amazon.
The proper way to successfully compete at the level they want to is probably not for Microsoft to come out with their own low-end tablet. There are a couple reasons for this.
The most obvious is the need for hardware partners. The announcement of the Surface tablet took all of these partners by surprise and earned them a lot of ill will. While Microsoft generally relies on these partners to get their software products to customers, they were already making smaller margins than was once the case sue to declining PC sales. Microsoft’s entry into the hardware arena adds insult to injury by setting a high standard with a tablet that will be hard to match and that will almost certainly shut down a number of potential tablet plans.
There is also the matter of customer perception. Windows 8 is not intended to be perceived as the cheaper alternative to iOS and it is being priced accordingly. The emphasis on Metro apps offers a chance to cash in on consumer purchasing by offering Microsoft a cut of every sale, but in the end what they care about is making sure that Windows once again becomes the go-to system for literally every device people care to use. The last thing they can afford is to be considered in the budget niche when it is already so common to see reviewers compare Metro to iOS as an instance of Microsoft playing catch-up.
We know that there will be Windows RT devices in the 7” range. Several companies have already indicated at least an eventual interest in creating one. Given Microsoft’s steep licensing fee for the operating system alone, however, nobody is going to be bringing prices down to the $200 mark. A Nook tablet could do it, since Microsoft wouldn’t be paying a license fee, but it would be going off message. If anything, I would expect to see the previously-hinted-at Windows 8 eReader coming out of that relationship at some point in the next year or so. Definitely not a full feature tablet PC.