Microsoft has no ?Plan B? for Surface

SEATTLE | Wed Feb 13, 2013 4:56pm EST

SEATTLE (Reuters) - Microsoft Corp has not made much of a dent in Apple Inc's and Google Inc's domination of mobile computing, but a top executive hinted on Wednesday that it will not stop trying and does not have an alternative strategy.

"We're very focused on continuing the success we have with PCs and taking that to tablets and phones," Microsoft's Chief Financial Officer Peter Klein said at the annual Goldman Sachs Technology and Internet Conference in San Francisco, which was webcast.

Given Microsoft's lack of success so far, he was asked if there was an alternative strategy or 'Plan B' in reserve.

"It's less 'Plan B' than how you execute on the current plan," said Klein. "We aim to evolve this generation of Windows to make sure we have the right set of experiences at the right price points for all customers."

Microsoft now has two versions of its own brand Surface tablet for sale and released its newest Windows phone software last year. But the company has not made big inroads into either market.

Gartner estimates that Microsoft sold fewer than 900,000 Surface tablets in the fourth quarter, which is a fraction of the 23 million iPads sold by Apple. Microsoft has not released its own figures but has not disputed Gartner's.

Windows phones now account for 3 percent of the global smartphone market, Gartner says, which is almost double their share a year ago but way behind Google's Android with 70 percent and Apple with 21 percent.

To grab more share, Klein said Microsoft was working with hardware makers to make sure Windows software is available on devices ranging from phones to tablets to larger all-in-one PCs.

"It's probably more nuanced than just you lower prices or raise prices," said Klein. "It's less a Plan B and more, how do you tweak your plan, how do you bring these things to market to make sure you have the right offerings at the right price points?"

Klein did not say whether Microsoft itself was planning to move into the growing small tablet market, following the success of Apple's iPad mini, Google's Nexus 7 and Amazon.com Inc's Kindle Fire tablet.

Along with its partners, Klein said only that Microsoft was "well set-up to deliver the most versatile set of experiences across form factors".

Regarding Microsoft's $2 billion loan to Michael Dell and private equity firm Silver Lake to take PC maker Dell Inc private, announced last week, Klein suggested it was simply part of its efforts to support the "ecosystem" of PC makers.

"We have a long history of participating and supporting the ecosystem and that takes different forms. Oftentimes it takes the form of co-marketing, sometimes in helping with development," said Klein. "In a very dynamic industry, our ability to support the ecosystem - particularly the ecosystem that is innovating on our devices and platforms - is a good thing and something we will continue to do."

(Reporting By Bill Rigby; Editing by Kenneth Barry)

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