If you want something done right, you better do it yourself.
That seems to be a key lesson for both Microsoft and Google, which in the past couple of weeks have unveiled devices that bind their respective operating systems with top-shelf hardware.
First Microsoft whipped the curtain back from Surface, a pair of tablets loaded with either Windows 8 or Windows RT (the latter a version of Windows designed to run on devices with ARM processors). Both devices feature 10.6-inch touchscreens, a kickstand, and a screen cover that doubles as a keyboard. Windows 8 and Windows RT will both rely heavily on cloud apps from third party developers, as well as baked-in cloud features such as SkyDrive: a radical change in many ways from previous versions of Windows, which emphasized programs stored on local drives (to be fair, the Windows franchise as a whole also predates widespread adoption of the cloud by several years).
Within hours of the announcement, analysts openly wondered how companies such as Dell and Hewlett-Packard would react to Microsoft’s decision to start building at least some of its hardware in-house.
“The effort around Surface will change Microsoft… into a vertically integrated company that is more similar to Apple than ever,” Rob Enderle, principal analyst for the Enderle Group, wrote in a June 27 research note. “This means that failure will also be more catastrophic, potentially taking out Windows, Office and IE in one shot, putting the firm on a RIM-like path of life support.”
A little over a week later, on June 27, Google used its Google I/O conference as a platform to unveil the Nexus 7, a 7-inch tablet with a Tegra-3 chipset (quad-core CPU and twelve-core GPU), built-in Chrome browser, front-facing camera, and Android 4.1 (“Jelly Bean”) operating system.
The Nexus 7 is built by Asus, perhaps an odd choice considering how Google’s Motorola acquisition effectively bought it a hardware arm (Google executives continue to insist they bought Motorola more for its patents and intellectual property). As with the Nexus smartphones that came before it, the Nexus 7 is clearly meant by Google to be a flagship device—one that could allow the company to place a more definitive stamp on an Android market dominated (at least in terms of mind-share) by other companies.
When released in mid-July, the Nexus 7 will not only face Apple’s iPad, but also the plethora of other Android devices of varying quality. The $199 price-point is clearly meant to compete with Amazon’s Kindle Fire, which runs a heavily modified version of Android.
“The company wants to create a content platform strategy that ties together all of its ragtag content and app experiences into a single customer relationship,” Forrester analyst James McQuivey wrote in a June 27 corporate blog posting about the Nexus 7. “It’s Amazon’s strategy with the Kindle Fire, and it’s actually the same strategy Apple has used to ensure that its iPad is not only popular but essential for many consumers.”
In other words, rather than give outside manufacturers wide latitude, Microsoft and Google have decided to take the production of their biggest stratagems more in-house. For Microsoft, faced with the potential alienation of its longtime hardware partners, the bet is a particularly big one. But Google faces a significant challenge as well.