Microsoft’s Move into Tablet Market May Be Too Late, According to Leading Financial

According to George Leong, contributor to Profit Confidential and financial expert, Microsoft needs to grow its mobile business on its own, but this will not be easy, due to the strong brand awareness surrounding Apple. Leong contends that the future for Microsoft will lie with its new “Surface” tablet; however, Leong notes that, unless the tablet is truly amazing, Microsoft’s move into the tablet market might be too late.

“For Microsoft, this will be its first venture into hardware sales, so it will be interesting to monitor,” notes Leong. Citing research firm IDC, Leong reports that “Microsoft is planning an initial production run of over three million units. This amount is small, considering Apple sold about 17 million ‘iPad’ units in its fiscal third quarter.”

In the article “Microsoft Betting on its New “Surface” Tablet,” Leong notes that even Microsoft’s $300-million investment for a 17% stake in a new division of troubled Barnes & Noble, Inc. is sinking fast: “It was a gamble, but a bad one,” says Leong.

There was speculation Microsoft would buy Nokia, but, based on Leong’s stock analysis, it is doubtful that this will happen due to the sinking strength of the Nokia brand.

“…the key will be the pricing, assuming everything else is equal,” argues Leong.

The Profit Confidential contributor also notes that Research In Motion tried to sell a cheaper “PlayBook” tablet, but it failed. He claims, however, that the PlayBook was not a great product, with no clear advantage, except price, over the iPad, which Leong reports is the tablet leader with 70% market share.

Leong states that the Surface will face stiff competition, and could give Microsoft a foot in the door of the tablet market.

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Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.