In partnership with

The week the world changed

Oct 30 2012 07:33
*Arthur Goldstuck

LAST Thursday, the world changed – once again.

Microsoft’s launch of Windows 8 was the obvious, expected and long-planned main event. Not quite as expected or planned, Microsoft’s nemesis, Apple, announced its first disappointing financial results in many years.

The irony of this turning of the tables was that, just two days earlier, Apple had made its own biggest product announcement in its history. It had launched the new iPad mini 7.9” tablet, along with a fourth generation iPad, and new versions of its iconic iMac computer, MacBook Pro laptop and Mac mini computer.

Such an extensive upgrade of its range, the launch of a new format and the arrival of the iPad 4 barely six months after the previous version represented a show of force by Apple.

Coming – not coincidentally – two days before the launch of Windows 8, it sent a message that Apple was able to go large any time it wanted, and that it had not lost its touch for producing deeply desirable products.

At the same time, however, it revealed chinks in its armour. Crucially, the new 7.9” iPad mini represented the first major new product from Apple in more than a decade that did not lead the market. It was a response to the massive inroads made into its tablet market share by 7” tablets, in particular Amazon’s Kindle Fire.

Before he passed away, former Apple CEO Steve Jobs had insisted Apple would never make a device in that format. But, just sometimes, market forces speak louder than single-minded vision.

The bigger surprise, however, was the pricing of the iPad mini. Given the $249 tag on the Kindle Fire and other competitors, it was assumed the mini would cost the same – and clean up the market. Instead, it was launched at $330 – prompting an instant decline in the Apple share price.

Then, on Thursday night, Apple announced quarterly financial results that disappointed the market – a rare occurrence.

Coming as it did even as Microsoft was unveiling a vast range of machines running Windows 8, it marked the beginning of a new era in computing.

At the South African launch in Johannesburg, one large wall was lined with device after device running Windows 8 in different formats: large and small computers, large and small laptops, tablets, and hybrid devices that can double as a laptop and a tablet.

One device in particular attracted special attention: the Samsung Windows Ativ 10.1” tablet. Aside from being the first Windows tablet from the brand that had presented Apple with its only serious competition in the 10” tablet format, Samsung had previously been the main producer of tablets running Google’s Android operating system.

The device itself was only half the story. It came with a startling announcement: in South Africa, it would initially only be sold by Standard Bank to its customers, at a 16% discount to its R8 000 price tag.

Microsoft also announced that Standard’s banking app – which had appeared on smartphones and tablets a full year after FNB’s entry into the apps space – would be the first South African banking app on Windows 8.

If the app was the first step in catching up, the Samsung Ativ represents the second phase in Standard Bank’s efforts. FNB has sold more than 100 000 devices – tablets and smartphones – through offering attractive discounts only to customers.

As a customer acquisition exercise among up-and-coming wage earners, it was groundbreaking.

The exclusive deal with Samsung, for the first time, gives Standard Bank a small edge in what will initially be a small niche of the market. It is believed to have pre-ordered 5 000 of the devices.

The further significance of the device is that it is in effect a stand-in for the Surface, Microsoft’s own tablet that represents its first direct entry into the computer hardware market.

The Surface is only sold through Microsoft branded stores, of which close to 50 have been rolled out in North America. Neither the stores nor the devices are expected in South Africa within in the next year.

While the Surface was conspicuous by its absence at the launch, close to 45 other devices were on display.

“That is the kind of choice we are giving,” said Mteto Nyati, country head of Micsosoft South Africa in an interview.

“You will have the same operating system but, if you want something completely different from a hardware perspective, you will have something completely different.”

In a rare comment on the competition, Nyati acknowledged that the timing and nature of the Apple event was significant.

“In the past they would never have considered a Microsoft launch and then make a decision around that on timing their own event.

"What we are beginning to see is that Microsoft is becoming more relevant in the consumer space, our products are now much more competitive, and we have carved a new space.”

Of course, Apple is not going away. Its devices remain iconic and market leaders. The Core Group in South Africa has negotiated pricing that allows it to sell the devices at near-equivalents of US prices. That tends to leave the rival products overpriced.

Clearly, Microsoft and its partners will need to pay careful attention to pricing. Meanwhile, they are meeting users’ need for products that can be used for both work and play, in the office and on the road.

Windows 8 is Microsoft’s comeback, and the its timing could not have been better.

*Arthur Goldstuck is managing director of World Wide Worx and editor-in-chief of Follow him on Twitter or Pinterest on @art2gee.

arthur goldstuck



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Comments have been closed for this article.

Company Snapshot

We're talking about: STEINHOFF

Steinhoff International, once the darling of fund managers, risks falling out of the JSE top 100.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

If SARB keeps interest rates the same this afternoon, how will this affect your personal finances?

Previous results · Suggest a vote