The tablet craze is building a thriving market, but it is extremely hard for newcomers to break in at this point. As it stands now, Apple is crushing the competition with its iPad products and, according to the latest estimates from research firm Canaccord Genuity, it could have more than 75% of the market share by the end of the year. With this sort of distance to make up, it’s no wonder Microsoft decided to go back to the drawing board with its tablet strategy.

The Little Tablet that Wasn’t

After years of speculation, the rumored Microsoft tablet only known by codename “Courier” is no more. CNET recently published a two-part series detailing the inside story of what really led to the cancellation, but a Gizmodo article from last year reported that the project was actually cancelled in April of 2010. Regardless of when the news broke, the backstory of how Microsoft’s would-be iPad competitor came not to be is pretty interesting – and surprising, considering the effort that went into it.

Courier was being designed to be a tablet device with dual touchscreens that could be folded to face each other like the front and back covers of a book. Leaked video and images of the mysterious tablet revealed what was indeed a visually impressive gadget. Microsoft envisioned Courier to be both a personal notebook and organizer that helped users keep up with contacts, appointments and tasks. Some of the features discussed for the device included its paint editing program Paint, a web browser, photo editor and even an e-reader.

A specialized version of Windows Embedded Compact, an operating system Microsoft developed to serve as the embedded platform for devices such as its Windows Mobile 7 and Zune HD, was said to be the key to taking Courier from design concept to official tablet device. A September 2009 article published by talked about how running this particular OS on the device would come at the sacrifice of some native Windows applications. The CNET story highlighted that an email app would also be excluded, which, according to its sources, is the main reason Microsoft chairman Bill Gates decided to pull the plug on the project.

Business Takeaways

Microsoft reportedly had a team of more than 130 working on the Courier project before Gates called for its dismissal. One can only hope that the software giant learned something from this experiment. It certainly left us with some business lessons we can all learn from.

Targeting Matters – According to J Allard, head of the Courier team and a key figure in the Xbox project, the main focus of Courier was content creation, which is why the team felt email capabilities were not a necessity. This made the device more of a niche product that would only appeal to a select audience, unlike the content consuming-focused iPad that obviously appealed to the masses.

Strategy Is Key – There were several factors that led to the termination of Courier, but ultimately the project was axed because it didn’t completely match up with Microsoft’s existing plan, mainly Windows and its applications. This points to signs of a failed strategy from the beginning.

Procrastination Kills – We were hearing about Courier before the first Apple iPad was even announced. At the very least Microsoft could have debuted the device around the time the iPad launched and established itself as a competitor in the market. It looks like a bit of procrastination prevented the project from ever making it out of the prototype phase. A less charitable hypothesis is that 130 designers could not decide how to focus the product’s services or intent.

Although it poured a lot of resources into the project, Courier was not a make or break deal for Microsoft. However, its blunder could be detrimental for a business that is not blessed with such resources, so keep a close eye on the big boys and try to learn from their mistakes.