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« News Update Only, Blogs Coming Soon | Main | What Happens Now to Nokia Lumia and Windows Phone, After Microsoft Throws Nokia Under the Bus? (Updated) »

June 25, 2012

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KPOM

I think Microsoft is trying its hand at Apple's game by integrating the hardware and software experience. The issue appears to be that OEMs weren't interested in Windows RT, particularly not at $85/license. Microsoft can't afford for Windows 8 and Windows RT to fail. They have staked too much of their future on Metro, and can see the writing on the wall that the consumer market is where the growth is. Therefore, although it's a risky move alienating OEMs, they don't have much choice. OEMs were part of the reason XP stuck around for so long, and left to their own devices, they could settle on Windows 7 (which is stable enough to be the "next XP").

Surface Pro appears to be a Microsoft-branded "Ultrabook" with an interesting keyboard. That model appears geared toward enterprises, particularly since it won't be out until after Christmas. The base Surface will be the cheaper device, and will ship with a special version of Office. That appears to be Microsoft's focus right now.

If Microsoft is able to make the Surface (and Surface Pro) successful, OEMs will go along begrudgingly. After all, Android has yet to make a dent in the tablet market, even though it is dominating the smartphone market, so where else would OEMs go? The stark contrast between the Samsung Galaxy SIII (which will sell 10 million in July),and Galaxy Tab (which is virtually nonexistent in sales charts) is stunning.

bob

i don't know why everybody says that xbox is a win, when it's a second place after wii sales figure:
http://en.wikipedia.org/wiki/Console_wars#Worldwide_sales_figures_6
.... and wii as sold twice more than xbox!
if someone lost a race after making twice the time to complete, nobody will say "look! he win!!!".
i fact, nobody will look after hil ...

Felipe

@bob
Not only that, but Xbox360 is Microsoft's second attempt, the first one was a total failure. The Xbox project is just now returning any profit to Microsoft. The only reason Xbox360 even succeeded is because Sony made a gamble on Bluray, making its console way too expensive.
I'd argue Apple and Google are way smarter and with deeper pockets than Sony and Nintendo. (they also have better developer support for tablets/smartphones)

cke

You make good points why Microsoft seemed compelled to do their own Windows tablet. Nokia and the other manufacturers were simply not stepping up to the task. Reports are also out that at least HP was angry at the poor performance and slow improvement of MSFTs touch version of their software. HP eventually went out on their own and bought Palm to address it (it failed and was shut down). Without their own hardware, MSFT would likely miss the tablet category entirely.

However, in typical MSFT fashion, they larded up the tablet with all their legacy features - a full capability laptop. This is a mistake. A high productivity laptop, which is the segment that MSFT dominates, is a "lean-forward" product. It is best consumed sitting at a table top with a good keyboard, a properly angled display, and a mouse at the ready. Except for thinness, this describes an Ultrabook - not a tablet. By contrast, the tablet experience sought is a "lean-backward" one not one of content creation, but one of content consumption. The valued tablet aspects are how well it performs while lying in bed or on a couch, or sitting on a public bench. The job the tablet is hired to solve is very different than what a high-productivity computing device is hired to solve.

The MSFT Surface misses with its high-productivity solution in a tablet formfactor for which the market seeks a high-convenience content-consumption solution. I believe MSFT will fail in its Surface product, but neverless gain benefits by spurring its hardware partners to hurry suitable Ultrabook designs to market.

notthatbob

If M$ is following Apple's lead, ie, branded stores, online and brick n mortar, then they need M$ branded products. Maybe they will announce real laptops/desktops next.
Poor Nokia...was once great company, w. world dominant position in mobile. Then they danced with M$, now they will be bankrupt by 2013. Elop is sending out resumes now, I would guess.

Poifan

HP tried the Palm Tablet, PC Makers Lenovo, Acer, Samsung,etc. are all making Android tablets. This is simply a warning shot from MS to the usual suspects to bring your best design work to Windows or MS will go direct. Initially they are only going to sell Surface tablets in MS Stores and few countries. If the usual suspects don't deliver more than half-assed products, MS will ramp up production, advertising, as well as sales channels.

khim

@Tomi T Ahonen: And why were Microsoft's current equipment partners so hesitant to release tablets running any variant of Windows recent or new, but happy to do so on other platforms, especially Android?

The answer is obvious to anyone who've observed tablets for decade of their existence. Yes, it may suprise you but tablet market is DECADE OLD MARKET - and Microsoft was there from the beginning: http://en.wikipedia.org/wiki/Windows_XP_editions#Tablet_PC_Edition

Yet iPad turned this old, tired and permanently underperforming market upside down. Why? As usual Apple found the key (and as usual it was not the only one to find it but the first one to popularize it heavily).

Remember? Touchscreen phones were total flops till Apple showed that touch-screen is not the problem - stylus is! Because you can not operate touch-screen phone using one hand (and we often want to do simple tasks with phone using just one hand) if it requires stylus.

Similarly tablets were total flops as long as Windows was used - for similar reason. You often want to use tablet while using one hand to hold it and another to operate it (it's too big to operate using just one hand as a phone, but two hands are common way to use it). And if your "tablet" weight two kilos and has 14"-15" screen... it's just not feasible. Plus tablet is not a workhorse (at least not at first), people are not going to spend $2000 on it. IOW (as Apple showed): tablet must be LIGHT and CHEAP. This is not possible with Windows. Windows RT promises "light", but "cheap" is probably not in the range of possibilities (if often-mentioned $85 price for Windows RT is even remotely close to reality).

HCE

I'll disagree a little with Tomi. I completely agree that Microsoft's OEM partners will increasingly run into Android's arms but the PC business is not going to change. Don't get me wrong, they would if they could. However, the PC OEMs do not have an alternative to Windows. Apple is not going to license OS X and Linux is simply not good enough as a desktop OS for the average user. For a techies, sure but not for the average non-technical user (and I'm saying this as a Linux fan who uses Linux as his primary OS at work). I'm sure you could get Linux to the point where it could be usable for the non-technical user but that would require a concerted effort by a bunch of major OEMs and that is not going to happen.

Not that Android comes with any guarantees either. Now that Google has an in-house OEM, everyone else is worried about the day when Google starts obviously favoring Motorola over all others. They are not likely to do it right away because Motorola is weak but if it regains something like its former strength, Google's partners had better watch their back. Samsung seems to be trying to create an alternative for itself by developing Tizen but the others will all be up a creek without a paddle. What is their alternative then - only Microsoft.

- HCE

khim

@HCE: What is their alternative then - only Microsoft.

Nope. With Microsoft you have no way to control your destiny. If you want to see alternative - look on the Kindle Fire.

Open source software (including Android) ALWAYS have built-in feasible competitor: fork of the very same project. Sure you'll need to spend sizable resources if you want to create something credible, but this is requirement anyway (if you don't promote your creation then you'll be lost in a sea of OEMs no matter what OS you are using).

This is why Google can not favor Motorola too much: other members of OHA can always rebel and go away without Google. If they feel that creation of their own fork is not feasible - they'll accept Motorola as an inevitable cost of using Android, if Motorola will get too many preferences - they can always go away with what they have and continue from that point.

Olavi Petri

If Xbox was making money for a while, then it was only a passing thing:

http://www.edge-online.com/news/microsofts-xbox-division-loses-229-million
http://www.bizjournals.com/seattle/stories/2003/06/02/story7.html

The (new) Surface could be kept on life support for years like has been done with the Xbox, but that would only undercut Microsoft's supposed allies. The best thing that Microsoft could do at this point would be simply to go away.

The form factor on the new Surface looks like the worst aspects of a tablet and a notebook. However, there is no point in discussing the vaporware because there is no ship date nor a price. Usually when Microsoft promotes vaporware it means that they would like to distract from something good happening in the market.

Lasko

http://www.gizmodo.com.au/2012/06/this-is-googles-new-nexus-tablet-the-nexus-7/

Tuffy

On one hand, Microsoft's tablet brings a bundled keyboard and the promise of Office, which differentiates it from the iPad and pushes it at the business crowd. On the other hand, they're releasing two versions running incompatible versions of Windows with different CPUs. I believe that sort of fragmentation will hurt the platform out-of-the-gate and slow adoption.

notzed

Totally naff form factors. 25cm is too small for a laptop, and too big for a tablet (that isn't an ipad). Getting it wrong twice in one day is some achievement. No wonder none of their 'partners' wanted to make them.

There's a reason the kindle fire was a hit beyond the price and marketing: 18cm tablets are just more usable devices for most people. You don't need two hands to hold it at a decent angle, and it's small and light enough to be more robust and fit in a coat pocket or handbag. (and they're cheap cheap to make).

As for the flaptop thing, what is that useful for? A laptop is great because once you have enough room for a full-sized keyboard, you have enough room for a decent-sized screen which forms a hard shell cover for it when not being used. It self-supports the screen and you can use it without a table - i.e. on a lap. A soft keyboard or flimsy sit-together contraption needs a table, and gives you a tiny screen as a bonus. Both inconvenient and useless.

Fabio Correa

HP bailed already. This analysis makes some very interesting points:

http://semiaccurate.com/2012/06/29/hp-said-to-dump-microsoft-over-surface/

tablet pc

but will suffer over time, being more a Zune than an Xbox. In the longer run, I think the Surface tablet line will be seen as a perennial drain on Microsoft profits,

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Microsoft Surface Tablet PC with Windows 8 RT OS is very convenient operate. Microsoft is always pays attention to Technology, so many people will believe in the Tablet PC they released.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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