) Chief Executive Steve Ballmer is hinting at additional hardware
releases in 2013 and beyond. According to
, Ballmer said that it is "absolutely clear that there is an
innovation opportunity on the scene between hardware and software
and that is a scene that must not go unexploited at all by
Ballmer also addressed whether the company's partners would
"build the lion's share of all Windows devices over the next five
"The answer is, absolutely," he said.
Ballmer's statements come at a time when Surface sales are
beginning to take off
. In addition to the Surface-style smartphone that Microsoft is
rumored to be developing, the company is also thought to be
creating its first handheld game console. Designed as a
seven-inch tablet to take on Apple's (NASDAQ:
) iPad and Sony's (NYSE:
) PS Vita, Xbox Surface could provide Microsoft with a new venue
for content distribution. As of March 2012, more consumers used
their Xbox 360 consoles for Netflix (NASDAQ:
That said, gaming has been and always will be an essential
part of the device. Without it, hundreds of thousands of
consumers would not have lined up at GameStop (NYSE:
), Best Buy (NYSE:
), Target (NYSE:
), Wal-Mart (NYSE:
) and other retailers to purchase an Xbox 360 seven years ago
when it was released. Video games inspired consumer to buy the
console over other devices (such as those that only play video).
Over time, Microsoft has successfully repositioned Xbox 360 as a
multimedia entertainment machine.
Microsoft could feasibly do the same for its seven-inch
tablet. By launching with a major video game property, such as
Halo, the Windows maker will be able to grab hold of the core
gaming market. Better still, those consumers will inevitably use
the tablet for more than gaming; they'll surf he Web, check
e-mails, download apps, watch videos, etc. And as the price of
the device comes down in the months and years after its release,
additional consumers will be likely to buy it and take advantage
of its multitude of features.
Aside from content (which will be the key to selling an Xbox
tablet), Microsoft faces one immeasurable challenge: how to sell
the device at a fair (but profitable) price. If the MSRP is too
high, Microsoft will run the risk of alienating consumers in the
same way that Sony has with its latest device. Since February,
Sony has only sold a few million PS Vita units worldwide.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.