Although I'm sure some executives at Microsoft wake up each morning, Microsoft has to do something with that product line. They either have to reposition it, or they have to kill it off.
The current plan of Microsoft's executives is to distort reality enough to create a thing called a "productivity tablet". And then, surely, they will be selling them hand over fist.
Logically, this doesn't sound silly. If you want to go up against the iPad (or Android, now that Android tablets seem good and seem to be selling), an obvious "weak spot" in the tablet's armour is that you can't use them for "proper work".
If you go through most of the stuff I've written about post-PC in the past couple of years, one theme comes out -- smartphones and tablets are about life, and not about work. PCs are primarily about work. The failure of Surface and Windows tablets in general within the Consumerland market can be attributed to this single misstep.
Hence "productivity tablet". It's proclaimation from Microsoft that the iPad is no good for work, but that Surface and Windows tablets are.
Of course, it won't work, because Microsoft essentially does not understand marketing.
Engineers struggle with marketing, and from my own experience and from what other engineers tell me the struggle comes from the fact that marketing is illogical. To an engineer, a comfortable scenario is one where you take a system in known state A, apply input B, and then see the system change to known state B. That's repeatable and dependable.
Marketing isn't like that at all. Marketing goes all emotional and fleshy the moment that people get involved. Unfortunately, people are involved from the very inception of a marketing plan. Why should sales double just because you've introduced a pink phone? Or why should customers suddenly one day just stop responding to your kitteh filled TV ads?
There are rules in marketing. Having a simple message that you repeat again and again consistently seems to win. Doing that seems to smooth out the meaty illogicality of individual behaviour. They key is to keep doing that until you find yourself in a position where you "own" an idea.
Take Nokia. Their position on Lumia (and on other phones) has been to own the idea of the "camera". The coverage of the new Lumia 1020 is all about the camera. Even my ZDNet colleague Mary Jo Foley did a write-up of how.
Of course, a smartphone is more than a camera. But by positioning Lumia as being about "taking photos", it overshadows other devices in the market. This is a "unique selling point", or USP. And ownership of a valuable USP is what all marketeers aspire to.
And they key is to create one strategy that highlights the value of the idea through a single message, and keep repeating and repeating it, consistently. Which, in fairness, Microsoft does do. They just have a knack for picking the wrong message.
Yes, it's in some ways vaguely stupid to position something as powerful as a high-end Lumia as a "camera with extra bits", but it's easy for normal people to grasp. This is why it's important for Microsoft to have Nokia involved. Nokia knows how to sell to consumers. Microsoft doesn't have Clue One.
It's no accident that Lumia gets respect in its market, whereas Windows doesn't in its.
(Incidentally, if Lumia is "all about the camera", how cross must they be that Instagram isn't on Windows Phone?)
Conversely, take the upcoming Moto X. That's supposedly going to be. I'm sorry? Sensors? My dad is supposed to rock up to a smartphone retail and go all goey over sensors, when a smartphone on the next stand is "all about the camera"?
A "taking photos" USP hits with consumers because it's a) universally understandable, and b) emotionally important from a social anthropology perspective -- people like to record their lives.
Specifically, as a USP, "taking photos" hits a need.
Just like "cheap food that tastes nice" is a good USP for McDonalds. Or "apparel for sporty people" is a good USP for Nike.
"Productivity tablets" isn't a bad USP for a tiny market filled with technologists. It's the world's most hopeless USP for the majority of normal, non-technologist customers. You can gauge that using a thought experiment -- how many more iPads would Apple have sold if Office had been available on it from the day of iPad v1 release? Whatever percentage you come up with at this point -- if you came up with anything more than 1%, I've got some bad news for you.
The actual chink in the armour of the iPad is that it's actually very difficult to understand what the value of owning one is before you've actually parted from your money. Still today, years into the iPad and competing tablets being available, I still fail to explain to tablet non-owners why they should go out and become tablet owners.
Of course, I'm not a rock star marketeer, so I have no idea how you position that.
But I do know that explaining to a barista, or someone who works in a factory, or someone who does charity work with disenfranchised youth that "hey guys, when you get home, you can fire up Office on your tablet!" is a lousy USP for the majority of the population.