Microsoft and Toshiba partner on new pocket media player

http://www.twice.com/article/CA6366785.html

Hypothetical question: Imagine that you are an immense powerhouse of a software company, named Microsoft (remember, this is a hypothetical exercise). You also market hardware products, but past performances (*cough* WebTV, *cough* XBOX360) have repeatedly demonstrated that your core competencies don't lie in getting hardware onto store shelves in a manner that could be identified as a coherent strategy. At the same time, your fiercest rival (let's call them Apple), has virtually created an entire product category, and totally owns the marketplace for handheld media players. iPod is a fifty-foot long great white shark in the digital ocean, and every other portable player builder such as Creative Labs, iRiver, Sony et al are the little shoals of fish that follow behind, nibbling on the scraps of market share that iPod hasn't gobbled up.

Before this metaphor gets totally out of control, ask yourself what you, Microsoft, has in place to cash in on the action: nothing. You've missed the boat, so what are you going to do? Reinventing the wheel is going to divert resources that would be better spent doing something that the market is demanding, like delivering Vista, on time better late than never. And besides, you'll be even later to the party than you already are. So what to do?

The smart answer: partner up with a big japanese manufacturer that has a solid handle on building, sourcing parts and working with subcontractors, and managing distribution channels. Despite being a 1st tier CE company, I've never understood why Toshiba doesn't get more respect or market share. In a decade of selling electronics, I've always been pleased with the performance and value of Toshiba products, but in brand image and recognition, they always seem to be a customer's 2nd or 3rd choice. And quite often, I had to sell people on Toshiba. Regardless, the two brands that never caused me grief with clients have been Toshiba and Hitachi.

Toshiba's image problem notwithstanding, they do a lot of things right: they supplement their enormous manufacturing capacity with shrewd alliances for subcontracts and agreements to license proven technology from other companies. Their quality assurance process is 1st tier. But most importantly, their supply chain, from suppliers to factories to distribution channel to resellers is highly evolved and efficient. Don't forget that Toshiba succeeded in getting the first HD-DVD player out on store shelves before anyone else. However, the success of their portable media players has been modest, at best. So the upside for them to partnering with Microsoft is the enhancement to their brand that attaches to being partnered with the big MS. Make no mistake, attempting to carve market share away from iPod is a daunting task, and is going to be an uphill struggle, no matter who tries it. That said, a strategic partnership between Microsoft and Toshiba that leverages their respective strengths has enormous upside for both of them.

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