A few days ago I was listening to HyperCritical #31, and John Siracusa posited a very interesting question about HP's splitting off of its PC division from the point of Microsoft. Considering the number of PC hardware manufacturers posting losses and flooding the market with a number of super-budget devices in a bid to lower their production costs as well as maintain some semblance of profitability, this could make some sense. Hewlett Packard is undoubtedly Microsoft's largest customer and if they aren't interested in the slim margins anymore, why should anyone else be?
The sheer thought nearly blew my mind.
Siracusa argues that with manufacturers continuing on their march towards consolidation, Microsoft begins to lose its position of power in the market place. The last time Microsoft saw this happening to a market they were desperate to be in -- namely with MP3 players -- they created the Zune. Although late to the game, the Zune was a solid piece of equipment that later went on to become Windows Phone 7.
So what if Microsoft did this again, but earlier? Rather than tacking on PC design and manufacturing to their existing hardware division, though, they would instead buy HP's PC division and produce a premium line of hardware. They would set the standard for all Windows-based machines.
Excluding Vista, an operating system I have little experience with, Windows has gone from being a crash-prone platform full of holes into something that is solid enough to be honestly trusted. Aside from the occasional driver issue, I've seldom had problems with Windows 7. Since SP1, the platform has become even better. What hasn't improved, though, is the hardware available. If Microsoft were to use HP's technical know-how to design, manufacture, and sell machines that rival Apple's own premium offerings, then we might see a fundamental shift in the market towards more reliable and higher quality machines.
Naturally there would be legal hurdles galore, and companies like Dell, Samsung, Acer, and others would begin dipping their toes into selling Ubuntu-equipped machines again as a means of passive-aggressive resistance to competing with Microsoft's brand of higher quality equipment ... but let's ignore that for the time being and just imagine what might be.
Microsoft already has a retail presence, and could easily add their own computers to their stores. In addition to this, HP's existing distribution network would ensure that hardware could quickly be shipped anywhere around the world. Major retailers in every nation also already have deals with Microsoft and would likely invoke greater brand trust than any other.
Sony? Too expensive. Panasonic? Fujitsu? Expensive, and cheap. Samsung? Nice, but not nice enough. Lenovo? Too ugly. Acer, Dell, Gateway? Too cheap. Microsoft? Ah ... let me see.
It would be a very risky play, but with the greatest risk comes the greatest reward ... or the greatest loss.
HP manufactures servers, workstations, desktops, notebooks, and tablets. Heck, they still have a phone division, too! All of these areas are spaces where Microsoft has, or wants to have, a strong foothold. They wouldn't need to have as varied a product line as Hewlett Packard or the competition, either. Just two or three models in each category with a simple design, excellent driver support, and a 'Premium Windows Experience'. All of these things would come with a premium price tag, and people demanding the best would be more than happy to pay the price. As for the other manufacturers, they could either offer better models to go head-to-head with the might of Microsoft, or they could stick to their low-end market and feed off the people who think a computer is a computer is a computer.
Windows has been hurting for a long time, as cheap machines running Windows are generally seen -- and rightly so -- as a cheaper and semi-reliable alternative to the shiny Apple computers, but this doesn't need to be the case. With their own product line, Microsoft could position Windows as something other than the budget OS.
