Microsoft Heading Towards Increasing the Profit Margin with Surface Tablet
Taking cue from the success mantra of Apple, Microsoft has also turned onto the business of manufacturing its own hardware components and eying towards making lucrative profit. It has been found that Apple’s success of generating profit is hugely dependent on the factor that it is using its own hardware and software for developing its devices. The company is charging heavy on the hardware components of the devices, rather than pressing more for the software.
The executive director of Strategy Analytics’ Global Wireless practice, Neil Mawston is of the view that Microsoft is unable to make enough money through mobile advertising, servicing of mobiles and even licensing the software. This has forced it to follow the path of Apple.
Accordingly, if reports are to be believed, with the introduction of the newest gadget of Surface by Microsoft, the company is able to make of profit of around 50 per cent with the sale of each device. Surface is the first device of Microsoft, which has the software and the hardware manufactured solely by Microsoft.
A senior analyst of IHS made a review of Microsoft’s surface and had concluded that the impressive device is generating more profit than that of Apple’s iPad, in terms sales per unit. He even adds that the Surface RT tablet by Microsoft, which comes without the Touch Cover, is able to generate more profit (in terms of ratio) than even the low-end iPad device. Microsoft is even planning to introduce its own range of first smartphones in either 2013 or 2014.