Microsoft's Surface tablet will not kill the iPad, but might sour OEM relations

The fallout from Microsoft's announcement of its Surface tablets may have far reaching repercussions with Microsoft's hardware partners, and it may not even be worth it.

This past weekend was rife with speculation about what would go down at a hush-hush, invite-only event Microsoft held in Los Angeles yesterday. The prevailing idea was that Microsoft would unveil its very own tablet PC, perhaps with the help of Barnes & Noble, but only part of that rumor turned out to be true. Microsoft actually unveiled a new family of tablets, dubbed Surface, and it did so without the help of any third parties. Microsoft’s Surface tablets are being designed and built in-house, and will be sold directly by Microsoft.

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Microsoft announced two versions of the Surface tablet yesterday, one running Windows RT, the other Windows 8 Pro. The Windows RT device is 9.3-mm thick, has a 10.6-inch ClearType HD screen (16:9 aspect ratio), and it weighs in at 676 g. It is powered by an NVIDIA Tegra SoC and includes a 31.5 W-h battery, and integrated microSD slot, USB 2.0 port, micro HDMI output and 2x2 MIMO antennae configuration for Wi-Fi. 32GB and 64GB models will be available at launch—which should coincide with Windows 8’s availability—at prices competitive to similarly configured ARM-based tablets, which is to say pricing should be on par with the iPad.

The Windows 8 Pro-based Microsoft Surface tablet has a 10.6-inch ClearType Full HD screen, but is thicker at 13.5mm and a bit heavier at 903 g. The Windows 8 Pro version is built around an Ivy Bridge-based Intel Core i5 processor and sports a 42 W-h battery, microSDXC card slot, USB 3.0 port, a Mini DisplayPort output, and a similar 2x2 MIMO Wi-Fi antennae setup. 64GB and 128GB models will be available at launch—which will be about 90 days after the Windows RT models arrive—at prices in-line with similarly configured Intel-based Ultrabooks.

The Microsoft Surface tablet has a built in kickstand that’s less than 1mm thick.

Both Microsoft Surface tablets feature magnesium VaporMg (pronounced Vapor-Mag) chassis with built-in kickstands and both support the Touch (3mm thick) and Type (5.5mm thick) covers that were also announced. The Windows 8 Pro-based Surface tablet will support digital ink technology as well, with an optional pen accessory.

Now that you know exactly what Microsoft Surface is, let me tell you what it isn’t. Surface is not an iPad killer; to say Surface is an iPad killer is sensationalist at best and ridiculous at worst. Microsoft’s upcoming Surface tablets and the iPad are two different animals. And Apple is so dominant in the space that it’s going to take a heck of a lot more than Surface is likely to offer at launch to knock Apple from its perch atop the tablet market. The story may be different in a few years once Microsoft’s app ecosystem and Windows 8 have had some more time to mature, but Apple has little to worry about in the short term.

The Microsoft Surface Tablet with blue Touch Cover attached.

Surface is not some sort of grand entrance into the hardware business for Microsoft, either. Microsoft has been making hardware for decades, including peripherals like mice and keyboards and devices like the failed Zune media player and Kin smartphone. And we can’t forget about the highly successful Xbox and Xbox 360 game consoles and their myriad of accessories. What makes the announcement of Surface a big deal is that Microsoft will soon be competing with the very same OEMs it has enlisted to build Windows RT and Windows 8-based devices. With Windows, Microsoft has historically focused on the software alone and allowed its hardware partners to design the hardware. Surface marks a major shift in that strategy.

Microsoft suggests that Surface is but one part of the Windows 8 story and that Surface is designed to offer a premium Windows RT/8 experience to end users. That’s all well and good, but I suspect there are a number of OEMs that are none too happy with this move. If you were a major OEM working feverishly on a Windows RT/8 tablet, how would you feel knowing that the company whose operating system you’ll be paying to license will also be competing directly against you? Answer: Not good.

Early anecdotal evidence suggests my gut instincts are right. As I write this, I’m reading comments from a number of contacts at Taiwanese OEMs and other hardware manufacturers and reactions are mixed. The big winner at this point appears to be NVIDIA, whose Tegra SoC is inside the Windows RT Surface, but a few folks close to some major Taiwanese OEMs that I won’t name seem less than enthusiastic. And that’s putting it nicely.

It’s going to be interesting to see how all of this plays out in the next year or so. Microsoft has wanted in on the tablet business for quite some time and it appears to have hit a home run in the design department with Surface. But if Surface’s success means alienating some key OEM partners, that success may be bittersweet, especially if those key OEMs dump Microsoft and align themselves more closely with Google in the long term.


Copyright © 2012 IDG Communications, Inc.

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