Microsoft

Why Surface could harm Microsoft's tablet success

Microsoft may have actually reduced its chances of success in consumer tablets with its plans to launch the Windows 8 tablet, Microsoft Surface.

Hardware manufacturers angry at Microsoft's decision to launch its own tablet could scupper the software giant's aspirations to break into the consumer tablet OS market.

Acer CEO and chairman JT Wang yesterday criticised Microsoft for producing Microsoft Surface, a Microsoft-branded Windows 8 tablet that will launch in October and compete against slates produced by Acer and other OEMs.

Wang suggested that Acer, the world's fourth largest computer manufacturer by shipments, may move away from Microsoft and ship its devices with an alternative OS and software if Microsoft goes into the hardware business - adding that "other brands" may also react negatively.

If Acer and other OEMs were to drop Microsoft software, it could damage Microsoft's plans to break into the tablet market with its touchscreen-centric Windows 8 OS, according to Tim Coulling, research lead for the PC market at analyst house Canalys.

OEMs could hamper Microsoft's tablet ambitions by deciding not to sell slates running Windows RT, a version of Windows 8 designed to run on Arm chips, Coulling said.

"A lot of OEMs who've been waiting for Windows could continue with Android tablets," he said, adding that the rapid sales and positive critical response to the recently released Google Nexus 7 had boosted perceptions that Android tablets may be ready to capture greater market share.

Microsoft "needs Windows RT to be a success", said Coulling, as - with desktop PC sales declining - it currently provides the only viable platform for Redmond to break into the growing consumer tablet market, which so far it has failed to do.

"If the market share in the tablet space doesn't pick up [for Microsoft] and Windows 8 doesn't kickstart it for them...the amount of licences they sell is going to decrease as people swap to other devices, the iPad or Android, then Microsoft will be shut out. It's a whole load of future devices which Microsoft wouldn't have a foothold in."

Windows RT already doesn't look that attractive a tablet OS for hardware manufacturers, Coulling said, given licensing costs will probably make it hard for third-party RT tablets to compete on price with the Apple iPad, the market leader.

"It's perfectly clear when looking at what products have been successful against the iPad that you need a substantial price difference with it," he said.

"From what I've heard, the amount of money that Microsoft want to charge for RT's licence with Office, they're not going to be able to make a competitively priced product."

He suggested that Microsoft could sweeten OEMs attitude to Windows RT by reducing the licence costs, possibly by removing Microsoft Office.

Microsoft could be in a better position to make a success of a Windows RT tablet, because it won't have to license the software, Coulling said, but added it may struggle to carry out logistics and support as effectively as OEMs.

However Richard Edwards, principal analyst with analyst Ovum, said he doesn't believe that OEMs have strong enough tablet sales to risk turning their back on Windows RT.

"The opportunity for them to make money by selling Windows 8 devices is huge and obvious.

"For the likes of Acer, HTC, Samsung or any of those to say they're not going to build Windows 8 tablets is probably a little bit of sabre-rattling. At the end of the day if it takes off, given the huge marketing push that Microsoft is able to give, then they would be missing out on an opportunity."

He added that Android still doesn't have the traction as a tablet OS to make OEMs comfortable with adopting it as their sole tablet OS of choice.

The issue of what hardware Windows 8 will run on is secondary to the larger challenge of getting consumers to accept Windows 8, Edwards said.

"It needs to get over this huge hurdle of acceptance. Within 12 months Microsoft's Windows Store needs to be bulging at the seams with applications from traditional developers, as well those we've grown to know and love through iOS and Android.

"People like myself who are enthusiasts will only consider in investing in a new bit of hardware for Windows 8 if Windows 8 was going to deliver all of those apps that we've started using on our iPads."

About

Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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