Retailers shift their ad spending from TV, radio and print ads to digital ads.
The company will launch Surface, its tablet computer competitor to Apple's iPad.
Microsoft Corp. is looking to nab a piece of the growing tablet market with the launch of Surface. The device, available later this year, aims to appeal to consumers who like the notion of a tablet that comes with the Microsoft Office suite of software they are accustomed to on their PCs.
The first Surface tablets come in two versions: one with Windows 8 Pro and another with Windows RT, a pared down version of Windows 8 for mobile processors. Both are based on Windows 8, Microsoft's newest operating system, and offer Microsoft's touchscreen-friendly Metro user interface that features tiles consumers can swipe to the right or left to move through the main menu. It also features what it calls a kickstand, which lets consumers prop up the tablet to make viewing videos easier.
The Surface tablet is a departure for Microsoft in that it is manufacturing the hardware itself. With most of its Windows products, Microsoft partners with hardware manufacturers like Dell. This, analysts say, could cause friction with the business partners Microsoft relies on to build Windows-based PCs and smartphones and that also may be looking to launch Windows 8 tablets.
"Our take on this is mixed," says Shaw Wu, an analyst with investment banking firm Sterne Agee Group Inc. "On the positive, Microsoft is being more proactive in addressing the mobile device market where it has had little traction. The obvious issue with this is that it is competing with its customers and so we'll have to see how this plays out."
Wu notes this isn't the first time Microsoft has made its own devices. It did so with MP3 player Zune, smartphone Kin and gaming console Xbox.
Manufacturing its own tablet may be an attempt by Microsoft to showcase the features of Windows 8, just as Google Inc. did when it launched its own Nexus smartphone to showcase the benefits of the Android operating system, says David McQueen, principal analyst at Informa Telecoms & Media. By taking this approach, Microsoft needs to make sure it hits the market running, he says. "It is essential the tablet is properly marketed and shows its full potential if it has any hope of displacing Apple's iPad in certain segments."