Microsoft's new tactic: pay people not to use iPads

Microsoft will give users a minimum US$200 Microsoft Store gift card for a used iPad 2, 3 and 4

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last week, Microsoft  (NASDAQ: MSFT )  announced that it will give users a minimum US$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.

We pay you

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 US$200, customers could come close to the Surface RT price of US$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.

The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

A version of this article, written by Chris Neiger, originally appeared on fool.com.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »