We’ve heard a lot lately about companies piling into the e-reader business. One company that’s not: Microsoft (NSDQ: MSFT). Entertainment and Devices division president Robbie Bach was asked about the e-reader market Thursday, and suggested that Microsoft wasn’t interested in making its own e-readers: “From a first-party perspective, so for Microsoft producing a device, we’re actually pretty selective about which ones we want to get into, in part because we know what it takes to scale hardware businesses like that,” he said. “You know, if and when we do devices, we’re going to pick areas where we know there’s big scale.” Following up, Chief Research Officer Craig Mundie said it’s not clear there is even a need for specialized e-readers, considering that PCs could eventually offer many of the same functions.
Executives, however, seemed to leave open the possibility that Microsoft could provide operating system software for e-readers, saying that the company’s family of Windows Embedded operating systems for specialized devices was “growing.” Microsoft already offers Microsoft Reader, software that makes it easy for users to read e-books on Windows-based devices. Microsoft, however, doesn’t host its own e-book marketplace and instead links to third-parties from its Microsoft Reader site.
The company has had mixed success in the hardware market. Its Xbox video game console has been a hit, but the Zune music player is another story. MarketWatch ran a story earlier this week that pointed out that sales for the non-gaming business of entertainment and devices, which includes Zune, fell 42 percent last quarter. Microsoft is fighting on: A new Zune is coming out this fall.
The Zune also may provide an example for how Microsoft could eventually enter the e-reader market with its own device. The iPod was already a break-out hit when Microsoft released the Zune in 2006. Perhaps Microsoft will wait until a competitor — possibly Amazon (NSDQ: AMZN) — proves that there is sufficient scale to make a go of its own.