Microsoft’s right call on tablets

There hasn’t been this much fuss about tablets since Moses walked up a mountainside. On Monday Microsoft took the wraps off Surface, a product line it hopes will help it win market share from Apple’s iPad, which remains king of the tablets. If it’s priced right, a tablet war is in the offing. By Duncan McLeod.

Added by Duncan McLeod on 20 June 2012.
Saved under Duncan McLeod, Opinion, Top
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It had all the hallmarks of an Apple keynote. No one knew exactly what Microsoft would be announcing in Los Angeles, but the excitement among gadget junkies about a potentially game-changing product from the US software giant was palpable.

What Microsoft CEO Steve Ballmer announced in the end was a new line of tablets called Surface that will run the upcoming Windows 8 Pro and Windows RT operating systems. Ballmer was drawing a line in the sand in the company’s protracted war with Apple. The subtext was clear: Microsoft has had enough of the iPad’s dominance and is prepared to do something it hasn’t done before — build its own hardware running Windows, potentially risking the ire of its partners in the PC industry — in an effort to eat into Apple’s market share.

On paper, the new Surface tablets look promising. The entry-level version, which uses Arm-based processors, runs Windows RT, which is Microsoft’s tablet-specific operating system powered only by Microsoft’s new interactive, tile-driven Metro interface. It won’t run legacy Windows apps, only those developed specifically for Metro, meaning it’s aimed directly at the iPad.

The second, more powerful — and possibly more interesting — Surface tablet is more like a traditional PC. It will be powered by Windows 8 Pro, offering both the traditional Windows desktop and Metro interface, and will be able to run applications designed for Windows 7 and earlier versions of the operating system. If it’s priced correctly, the tablet could prove popular in businesses.

Surface for Windows RT weighs 676g, marginally heavier than the 660g third-generation iPad, and has a 720p resolution display. It has 32GB or 64GB of storage, a microSD port, a USB 2.0 port and a 31,5Wh battery. The Pro version weighs noticeably more at 903g, but comes with a more powerful Intel Core i5 chip, 1 080p screen, a 42Wh battery (similar to the new iPad), a speedier USB 3.0 port, up to 128GB of built-in storage and Mini DisplayPort for hooking the tablet up to a monitor or TV.

Both tablets come with a magnetic cover that integrates keyboard and trackpad and both feature Wi-Fi for Internet access. It’s not yet clear if the devices will support mobile broadband networks.

The move is a brave one for Microsoft, which risks alienating its hardware partners, such as Lenovo, Samsung, Acer, Hewlett-Packard and Dell. The software maker is promising these “original equipment manufacturers” cost and feature parity on both Windows 8 and Windows RT and Ballmer says the firms were briefed about its plans ahead of Monday night’s announcement.

Still, outside PC peripherals and the Xbox gaming console, Microsoft’s ventures into the hardware market haven’t exactly flourished. Its last big attempt to tackle Apple head-on at its own game — by developing the Zune MP3 player to take on the iPod — failed. It’s tempting to suggest it’s again coming to the market too late, taking on a product in the iPad that has established its dominance. But that’s the wrong call. Tablets are not yet ubiquitous and business customers are more likely to embrace Windows-powered tablets simply because they’ll play nicely with their IT systems and allow more granular control.

And with Microsoft pushing Metro across all its consumer-facing products it’s building a powerful proposition that plays to its strengths in enterprise IT. If it prices the Surface tablets right, then Apple has a fight on its hands.  — (c) 2012 NewsCentral Media

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  • http://twitter.com/henlaub Hendrik Laubscher

    Duncan, is it just me but is Microsoft slowly getting its ducks in a row? The mere fact that Microsoft did not have pricing nor availability on the Surface tablets is a concern. Why talk about something and not have information available on it?

    One other thing that could be interesting to follow is whether the devices have the Microsoft office software available on launch.. if so I can see enterprise buying boatloads and not buying iPads. I agree with @fb98e72795fe0860fc92f9631d90ee11:disqus and this seems to be make Nokia’s long term survival questionable. Why just build tablets and not cellphones? Ballmer is slowly making Microsoft a contender..

  • mcleodd

     Hi Hendrik,

    There’s been a distinct shift in focus at Microsoft. I think the company is in a very strong position, though most people haven’t realised it yet (the Apple reality distortion field is strong).

    The company is best positioned to take the consumer’s living room with Xbox and its push to run the Metro UI across its consumer-facing platforms is smart. Apple seems to be on the back foot now, with no real innovation since the untimely passing of Steve Jobs.

    It’s going to be an interesting year ahead. Microsoft’s big weakness right now is Windows Phone, and its future there is far from guaranteed in the face of the iOS and (especially) Android onslaught.

    But Microsoft has definitely turned the corner, even if most consumers haven’t realised it yet. Redmond is fighting back from a position of weakness. And that’s when the company performs best.

    The big question is what role Nokia will play in all of this. I wouldn’t rule out Microsoft buying Nokia. Microsoft can’t afford Nokia to fail. If it’s heading that way, I reckon Microsoft will buy the Finnish company. At $10bn market cap, it’s a steal (not much more than it paid for Skype)

    My bet is MSFT at $40/share in 12 months from now.

    Cheers,
    Duncan

  • Greg Mahlknecht

    How did this become about Nokia?  They rose to power making great phones, they’ve never pinned any of their fortunes on anything in the PC space.  Nokia’s fortunes are very much tied to being the premium WinPhone manufacturer, something which they seem to be doing well.  The Lumia brand is already a big name in the mobile world, and I think they’ll do well with that momentum when WP8 comes out, and will shake things up with their 41mp camera WP8 device, which is the first phone (their Symbian version doesn’t count :) ) which can actually replace a compact camera, something I’ve been hearing being promised since the first 320×200 crappy cameraphone came out god knows how long ago.

  • Greg Mahlknecht

    > I wouldn’t rule out Microsoft buying Nokia. Microsoft can’t afford Nokia to fail.

    MS needs 2 things from Nokia right now – their content assets (mainly mapping) and WP7(8) phones.  Both those divisions of Nokia are doing very well, although it’s not something you read about much in the press.  

    Elop expected Symbian to wind down over 18-24 months, sell a billion devices, and transition smoothly over to Windows Phone.  Nobody predicted Symbian would fall off a cliff and decline as fast as it did.  That’s where Nokia’s woes are coming from, and where the 10,000 jobs were recently cut from.   I think once Symbian is purged from Nokia it’ll be a much smaller, but strong cellphone maker, and rebuild itself into a major player.

    The runaway success of Samsung’s Galaxy S3 (over twice the number of preorders of the iPhone 4S is crazy, nobody would have dreamed anyone but Apple would beat those 4S figures!) proves that a market is never unassailable.  You just need the right product at the right time.  Nokia is the company that invented the cellphone as a cool accessory.  They have what it takes.  It’s all down to timing and a bit of luck.  I hope they can get back on track.

  • capeleopard

    A tablet that runs Office should be a big hit with business. And I’ll be first in the queue.

  • http://twitter.com/ixhd Cliff Hazell

    Remember those are pre-orders from the Carriers, not Real Customers ™.

    I would also put money on Microsoft buying Nokia, Very interested to see how this pans out.

  • Teklemon

    Thanks for the comments, appreciated.
     I really wish I could share your optimistic outlook on Nokia, I had the same , but seeing that MS also wants to make their own tablets, it puts right against other HW vendors, including their alley Nokia. How can MS be successful if they only make tablets when tablets, smartphones and even ultra/net/not/books are also part of the “eco-system”? And from the nokia side how can they survive as a leader when all their compatitors are making tablets and phones and offers seamless experience over the two platforms? Will it be easy for MS to align Nokia products and their own tablet products to offer the same kind of experience? Wont it make more closer to Apple if MS buys Nokia and has a full Windows based ecosystem?
    Nokias revival will be (the only chance I see)
    - sell Windows phone line to MS
    - Adopt Android, and make tablets and phones.
    - Once Samsung and Nokia are on the level field (both using Android), Nokia can easily catch up with Samsung thanks to their superior design and quality.

  • Greg Mahlknecht

    For a popular product, it’s the same thing.  The GS3 preorders are  already sold out at some carriers and they are ordering more.   The carriers don’t order the phones because they want to build forts out of the boxes they come in, they get them because customers are demanding them.  Samsung doesn’t sell directly to the public like Apple, so that’s the only stat they can quote.

    Which brings up a point – the Apple preorders will include the carrier preorders, too, I assume – note that Apple always quotes “phones sold”, not “phones activated” (like Google does with Android) - so their figures will also include those in the supply chain, so Apple’s “phones sold” will include those sitting on the shelf in your local Vodacom shop.

    But as I said – unless it’s a slow moving product, it’s an irrelevant distinction.

  • http://twitter.com/nowires Lars P. Reichelt

    @duncanmcleod @cliffhazell:disqus 
    No, Duncan is right it had all the hallmarks of the Apple iPad presentation…. almost down to the dot. See here: http://www.readwriteweb.com/archives/video-surface-vs-ipad-microsofts-getting-rusty-at-stealing-from-apple.php
    Joking aside, Microsoft is feeling the heat and they are very worried that through the BYOD trend Apple is building a beachhead into their most profitable domain: Windows and MS Office are the main drivers of revenue for MS and they are being attacked in a major way. 

    Therefore Microsoft resorts to the old IBM tactics of FUD (fear, uncertainty and doubt) by sort of launching Surface: Software still in beta, pricing unclear, OEM partners not defined (if ever), distribution very limited, actual launch date unclear. 

    So, yes it is good for competition that MS enters the fray, but I am not sure how far they will get. 

    What I am pretty certain about is that Nokia is on its last breath: Lack of traction with consumers and operators (2 days ago T-Mobile announced that they will not stock Lumia until WP 8 is out), very limited number of apps, no upgrade path to WP8 for current Lumias (see yesterday’s WP 8 presentation by MS), Nokia is massively hemorrhaging cash and talent. Time is running out – fast.

  • Greg Mahlknecht

    >It’s not clear why there are two different sizes and architectures.

    Really?  You didn’t get it?  The ARM one (cheap one) is to take on iPad/Android tablets, and the Intel (expensive) one is an attempt to carve out a new marketspace that everyone’s talked about for years, but nobody’s got right – a single device to replace the tablet, laptop and desktop.  Whether this device is up to the task is yet to be seen, but it’s by far and away the best attempt so far. 

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