Microsoft, the VW family sedan of IT, wants to be tech's new Rolls-Royce

Race to the bottom

Part of Microsoft's problem is that it tied itself so closely with a PC market where lower prices came to be expected. Once the lowest margin was hit, OEMs went for netbooks, which cannibalized the once-very-profitable laptop sector.

The vast majority of these systems ran Windows (although Google's Chromebooks are now making serious inroads into the space) and Microsoft became seen as a cheap OS vendor. But for those willing to spend money, Apple was the way to go.

Ultimately this didn't harm Microsoft too much. It still made money selling Windows and Office standalone software, and Redmond was still the de facto choice for business. But, in these cloudier times, that became a problem.

One-time Microsoft CEO Steve Ballmer never really got this, which is why a lot of people at Microsoft breathed a huge sigh of relief when he left. His replacement, Satya Nadella, certainly does, however, and this new focus on the high end comes straight from the top of the management tree.

Can Microsoft crack the high-end market? Possibly, if it plays the long game. Apple inspires such love among its users that the firm will be as persistent as herpes in the sector, and the same is true for Alienware, but Microsoft can certainly cream off some of the funds going into top-end kit, at least in the PC business.

Surface Pro is selling very well, particularly to the executive classes, and Surface Book will do the same, albeit in lower volume because of the higher price point. The new laptop might not match Apple hardware in style, but in terms of engineering it makes the best of Apple's kit look dated.

Microsoft is adept at playing the long game, and has the deep coffers to hang in there and chip away at high-end competitors' market share. It took the customary three iterations before it got Surface Pro right, but the Surface Book looks great right off the bat – although we'll reserve judgement until proper testing has been done.

In the smartphone sector, however, Microsoft has serious problems. It can build all the high-end kit it likes, but unless there are a decent number of apps available, no one's going to buy them. Redmond reckons that universal apps running on Windows 10 and the Phone OS will solve this problem, but this hack has his doubts. ®