Owning the household eco-system

I have just finished reading an article from PandoDaily.com about Microsoft's struggling Surface RT tablet and how a price drop has caused Walmart to sell out of it.  The thrust of the article is to warn Microsoft not take this surge in demand to indicate that the RT has potential and should be continued despite the rocky start.  The argument here is that at the reduced US$349 price, they cannot be making much (if any) profit on each device, and that Microsoft NEEDS to make margins on this hardware because there is no money to be made from it's anaemic eco-system.

As I intimated in the article comments, this could be a rather short-sighted view.  The RT doesn't necessarily need to make much profit in and of itself if it's part of a larger 'own the home' strategy.

Apple have a clear strategy of trying to make every 'screen' in your house an Apple device.  They are very careful to ensure that all their devices (Mac, iPhone, iPad, iPod, Apple TV) integrate with each other seamlessly.  This encourages consumers to take advantage of this synergy by making each of their computer, tablet, phone and media streaming devices an Apple one.  Google is also taking steps in this direction - Android phone and tablets can easily share between each other, the Chrome browser adds desktop integration, and the recently launched Chromecast dongle adds sharing to the big screen. (Off-topic - I really want a Chromecast - Google please release it in NZ ASAP!)

Microsoft don't seem to have a clear strategy along these same lines, despite having the individual pieces.  The have PC, phone, tablet and entertainment devices (ie. Xbox) but there doesn't feel like there's a big advantage to going all-Microsoft.  The tight integration among devices doesn't seem to be there.  However, that's not to say this can't be fixed, and the recent corporate restructure should make that easier.

Which brings me back to the Surface RT.  This device if it is positioned and priced correctly, could be a key part of this 'own the home' strategy by taking the position of the 'browsing' screen away from iPad or Android tablets.  The Surface Pro is obviously intended as a replacement for both the tablet and PC but for those households which already have a PC and don't want replace it, a cheaper option is warranted and the RT fills that spot.  If Microsoft is serious about owning the home, then they need to persevere with the RT, despite its disastrous start.