Microsoft's Surface tablet is a measured gamble to enter the cutthroat tablet business, but the company could be alienating longtime hardware partners that are also expected to announce Windows 8 devices starting later this year.
 
The Surface tablet models come with a 10.6-inch display and will be distributed directly to customers, via Microsoft stores and the company's online store. Microsoft's goal is to offer a package of hardware and software built around Windows so the company can effectively compete with Apple, which offers the iPad and iPhone devices running on the iOS platform, analysts said.
 
Microsoft is offering two tablets, the Surface with Windows RT for ARM processors, and the Surface Pro with Windows 8 Pro for x86 Intel processors. The Surface tablet with Windows RT is lighter and comes with Office 15, which includes widely used productivity applications such as Word and Excel. Microsoft's new tablets will come with a kickstand and a thin cover that doubles as a keyboard and trackpad.
 
The creation of its own tablet is a sign that Microsoft has lost faith in PC manufacturers to develop devices that can take advantage of the Windows OS, analysts said. Apple has dominated the tablet market, and Microsoft had to take hardware development into its own hands as PC makers were not generating enough excitement to drive interest in Windows 8. Companies like Dell, Hewlett-Packard, Acer, Asus and Lenovo are expected to come out with tablets running the upcoming Windows 8 and RT operating systems.
 
If the Surface tablets become successful, Microsoft could potentially be stealing future revenues from its partners who view the tablet segment as profitable, said Roger Kay, principal analyst at Endpoint Technologies Associates.
 
"I have to believe that [the partners] are fairly discontent about it," Kay said. "The tablet is the heart and soul of Windows 8, and it looks like Microsoft has reserved it."
 
Microsoft has licensed Windows to hardware makers for PCs since the 1980s, but that business model may be getting antiquated, Kay said. Microsoft may be seeking a new business model around tablets, but at the same time the PC market is not going anywhere and Microsoft wants to retain its Windows licensing business, Kay said. Microsoft may be experimenting with a new tablet business model, but the software company will have to strike the right balance in maintaining a relationship with the PC makers on tablets and PCs.
 
Shaw Wu, a financial analyst at Sterne Agee, agreed, saying Microsoft's tablets could eat into the sales of devices from Windows partners. The full impact of Microsoft's tablets on PC makers has yet to be determined, Wu said in a research note sent on Tuesday.
 
The Surface is crucial for Microsoft to establish a presence in the tablet market and to compete with Apple, said David Daoud, research director for personal computing at IDC. Microsoft's move to tablets came likely because PC makers failed to take the lead in making tablets good enough to compete with Apple, Daoud said.
 
"[Device makers] have been lagging in terms of creativity," Daoud said.

Apple's iPad dominates the market while competitors have stopped making certain tablet models or are trying to catch up. Hewlett-Packard last year discontinued the TouchPad, while Dell has discontinued Streak consumer tablets, and both companies are now planning to re-enter the consumer tablet market with devices based on Windows 8. Tablets with the Android OS offered by companies like Samsung, Asus, Acer and Lenovo have not sold as well as the iPad.

Microsoft had to take the lead in development as device makers were not willing to spend on research and development, Daoud said. Device makers are making razor-thin margins on consumer PCs and tablets, and have limited spending on innovation in tablets. Ultimately Microsoft's lead with the Surface tablets could inspire device makers to release the next-generation Windows hardware and get a better understanding of the software and hardware ecosystem, Daoud said.
 
"The move is somewhat predictable. What is unpredictable is Microsoft taking the lead on the hardware side," Daoud said.
 
At the start, Surface tablets will only be available through Microsoft Stores and online, which limits adoption potential, said Sarah Rotman Epps, an analyst at Forrester Research, in a blog entry. But a larger struggle for buyers revolves around distinguishing the Windows 8 and Windows RT tablets, she added.
 
"Selling x86-based tablets in the same retail channels as Windows RT tablets will confuse consumers and sow discontent if consumers buy x86 and think they're getting something like the iPad. Microsoft and its partners need to articulate a compelling strategy for how they will manage consumer expectations in the channel," Rotman Epps wrote.
 
But with or without the help of device makers, Microsoft is now gearing up to battle Apple.
 
"They have to do something, they can't just sit there and let Apple take over the world," IDC's Daoud said.


Published by Resellernews, written By Agam Shah, New York | Wednesday, 20 June 2012
Link to article:  http://reseller.co.nz/reseller.nsf/inews/microsoft-could-be-alienating-hardware-partners-with-new-tablets?opendocument&utm_source=chbeat&utm_medium=email&utm_campaign=chbeat

Microsoft left a lot of unanswered questions after following Apple into the tablet hardware business Monday with its new Windows 8-based Surface PCs/tablets. The software maker introduced the new family of devices during an event in Los Angeles.
 
Microsoft said the new Surface tablets are meant as companion hardware for Windows 8--the most dramatic overhaul of the OS since Windows 95. Company CEO Steve Ballmer said: "We wanted to give Windows 8 its own companion hardware innovation." Windows 8 is expected to be available in autumn.
 
The Surface brand was originally used for a tabletop touchscreen computer Microsoft launched in 2007.
 
Early impressions are positive
 
Looking at the spec sheet, the new devices sound promising and early impressions are generally positive. The new tablets will come with a 10.6-inch display, a kickstand for tabletop viewing, and a super-thin keyboard case that attaches to the device with magnets.
 
Surface will come in two flavors: Surface with Windows RT and Surface Pro with Windows 8 Pro. Windows RT is the version of Windows 8 designed for ARM processors; it includes the new touch-friendly Metro-style interface, as well as a limited version of the traditional Windows desktop for running Internet Explorer and Microsoft Office.
 
Surface tablets with Windows RT will include a micros slot, USB 2.0, and a Micro HD port. The devices will weigh about 1.5 pounds and be about 0.36-inches thick. Microsoft did not say which processor the Windows RT device would have, but did say the tablets will come with your choice of 32GB or 64GB of storage.
 
The Surface Pro tablets will be Intel-based with access to the Metro UI as well as to the fully functional Windows desktop and will come in 64GB and 128GB versions. The tablet will have a microSDXC card slot, USB 3.0, and Mini Display Port. The Surface Pro will weigh just under two pounds and be about half-an-inch thick.
 
That's what we do know about Surface, but there are also a few interesting questions left to answer.
 
How much will it cost?
 
Microsoft was short on details when it came to pricing the new Surface tablets. The company said the Windows RT version of Surface would cost about the same as comparable slates. Surface Pro, meanwhile, would be priced similar to comparable competitive Ultrabook PCs. This is based on US pricing, where Ultrabooks cost less than US$1000.
 
Let's assume that comparable tablets for the Windows RT version mean the market leader, Apple's iPad. So the entry-level Surface models should cost about $900 for the 32GB version and $1000 for the 64GB model.
 
How much Surface Pro devices will cost is another issue entirely since Microsoft wants to compete with Ultrabook PCs. When Intel introduced the new class of portable laptops, they were supposed to be priced under US$1,000. But that dream is only now becoming a reality with second-generation Ultrabooks.
 
When will it arrive?
 
The Windows RT version of Surface is due to come out during the general release of Windows 8, which is expected around October. The Surface Pro is scheduled for release about three months later, meaning in early 2013. Microsoft did not offer any specifics beyond these general time lines.
 
Will Microsoft ever give up on the digital pen?
 
Microsoft couldn't resist giving a nod to its legacy tablets (convertible notebooks) by including digital pen functionality with the Surface Pro. But haven't consumers already spoken and said, "Thanks, but no thanks" to digital pen input technology by adopting the finger-driven iPad in droves?
 
What about 3G/LTE connectivity?
 
Microsoft didn't say whether the new Surface devices would include mobile data. Perhaps the company didn't want to discuss that issue while it works on developing carrier partnerships for its new tablets. Wi-Fi only devices are great, but many people -- especially those looking at the Surface Pro for work -- will want the option of a higher-priced device that comes with 3G connectivity.
 
Will the Surface fulfill the promise of Apple's iPad?
 
When technology critics speculate about the future of the iPad, many wonder if it could one day replace the home PC for many users. In some ways it has already done that for users who just want a computer that can do casual Web browsing, e-mail, social networking, and video streaming. There are also some professionals using the iPad instead of a laptop at work, including programmers, journalists, and small business owners.
 
But while the iPad is becoming a popular choice for the road, many people are still holding on to their laptops. That could change with Surface and similar devices since they offer a familiarity the iPad doesn't necessarily have.
 
This is especially true with the Surface Pro: It's a full Windows PC that is still a relatively sleek tablet with a slim travel keyboard designed with touch typists in mind. That means you can take all the programs you use right now and stick them on something the size of a tablet. Even the entry-level version of Surface running Windows RT offers the more familiar desktop interface (albeit with limited functionality) for people who want a basic desktop.
 
Something missing
 
Based on what Microsoft has said, however, the one thing Surface may be missing is the consumer-friendly entry-level price point. Tablets priced above the entry-level iPad have failed to gain much traction.
 
Perhaps Microsoft will cost less than the iPad with the 32GB version, but we won't know for sure until Windows RT Surface tablets hit store shelves.
 
Microsoft is off to a good start with Surface, but we'll have to wait a few months yet to find out if the company's promises will meet consumer expectations.


Published by NZ PC World, written Ian Paul | Wednesday, June 20 2012
Link to article:  http://pcworld.co.nz/pcworld/pcw.nsf/news/microsoft-surface-tablet-5-questions?opendocument&utm_source=update&utm_medium=email&utm_campaign=update