Discusses a topical or current issue in microeconomics - Essay Example

Microsoft Corporation recently launched its latest innovation of the surface tablet at Windows 8 launch event with the aim of competing Google Inc and Apple Inc that are currently the main players in the computing market (Desai 46). Microsoft is attempting to reinvent the Windows personal computer in a new format to challenge Apple’s iPAD. It has twice the amount of storage capacity as the iPAD and costs the same price. The 32 GB Surface costs $499 while the full-sized iPAD of 16GB costs the same price.

During its launch, Panos Panay, the head of the project demonstrated the tablet features such as the ultra thin cover that doubles up as the key board. He also dropped it on the floor to demonstrate its durability (Benassy-Quere 48). The question is to whether this innovation will convince consumers in this highly challenging economic time. According to Temi Reller, the finance and marketing director of Windows, 40 million licences of Windows 8 licences were sold in the first month. However, according to NPD research, Windows PC sales have dropped despite the release of the surface tablet (Desai 48).

The sales have dropped by 21% by the 21st of October 2012 as compared to the 11th of November the previous year. The demand for windows 8 has not been commendable at all as remarked Asus CFO David Chang. In fact, Microsoft has had to reduce its order for Windows 8 down from four million to two million. During the time of Windows 7, it accounted to about 83% of PC sales. Today, only 58% of windows buyers opt for Windows 8. Despite the discrepancies, most marketers have elicited faith in the sales of these tablets.

IHS iSuppli predicts over one million sales of the surface tablets in the last quarter of this year. In fact, the firm estimates a 1.3 million sale. It is undoubtedly a tough way forward for Microsoft to gain ground in the tablet market (Neely 46). The law of demand is experienced in