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This week, Microsoft (NASDAQ: MSFT ) announced that it will give users a minimum $200 Microsoft Store gift card for a used iPad 2, 3 and 4. It's an odd, if not desperate, attempt to lure users away from Apple's (NASDAQ: AAPL ) iPads to Microsoft's unpopular Surface tablets -- and it won't work.
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According to Microsoft, the deal started on Sept. 5 and goes until Oct. 27, and timing is anything but accidental. The company is expected to release the new Surface 2 tablet line on Sept. 23, and this deal is aimed at both moving old inventory and trying to get customers interested in the new tablets.
With a minimum iPad trade in of $200, customers could come close to the Surface RT price of $349. Microsoft didn't specify what the maximum gift card amount would be, but it said on its website that "Microsoft Store gift-card value will be equal to trade-in value, and is subject to Microsoft's discretion and manager approval."
Maybe Microsoft failed to read up on the J.D. Power and Associates survey released at the end of April, showing that the iPad is No. 1 in customer satisfaction. Apple beat out Amazon.com and Samsung to win the top spot -- twice. In a press release by J.D. Power, the company said, "For the second consecutive study, Apple ranks highest among manufacturers of tablets in overall owner satisfaction."
Good luck, Microsoft.
Apple shipped more than 14 million iPads in the second quarter of this year alone -- with Samsung in second with 8 million -- and ranks as the world's top tablet vendor by shipments. Handing out some gift cards isn't going to change any of that.
A better plan
A good marketing campaign is one that convinces customers why one product is a better buy than another. But Microsoft's strategy as of late has been to bash the iPad in commercials and now to simply pay people not to use it. Both show Microsoft's desperation.
The company needs a better tablet product to really compete against Apple and its competitors. With a Surface 2 and Pro 2 announcement expected later this month, Microsoft will have another chance to prove it can tackle tablets head-on. Microsoft investors need to see solid Surface sales from the company and a commitment to developing a cohesive operating system across the desktop, tablet, and smartphone platforms. With its tablet OS market share at just 4.5%, Microsoft may be wise to focus more on maker better products and less on marketing gimmicks.
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