Microsoft’s Surface tablet no threat to Apple’s iPad

Gregg Keizer
22 June, 2012
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Apple has little to worry about from Microsoft’s tradition-breaking move to sell its own tablets, analysts said yesterday.

Microsoft’s new Surface, a line of 10.6-in. tablets that will run the company’s impending operating systems — the tablet-centric Windows RT and the more traditional Windows 8 — pose little threat to Apple’s iPad market dominance, those experts said.

The Microsoft Surface tablet, unveiled Tuesday morning, comes with a built-in “kickstand.”

According to IDC, the iPad will account for 63 percent of all tablets shipped in 2012.

“I don’t think Surface is a big hurt on the iPad,” said Technology Business Research’s Ezra Gottheil. “[The Surface] will have some legs in the enterprise — it will be a lot easier of a sell there with compatibility through Office, it’s probably more manageable and it comes from a vendor that IT is more comfortable with. But it won’t be a major impact on the iPad.”

Others agreed.

“Microsoft’s tablet-related products may have a place in certain parts of the enterprise world that require Windows-based solutions [but] we found little in yesterday’s presentation that would convince us that a consumer would prefer Surface over an iPad,” Topeka Capital Markets’s Brian White, said in a note to clients.

Tuesday, Microsoft stepped over a line it had never crossed in its 37-year history: It said it had designed and would sell, what is essentially a computer, in the process eliminating the middleman — OEM partners like Dell, Hewlett-Packard, Lenovo and others — from the Windows food chain.

Radical though that was — one analyst said it was the boldest move he’d ever seen by a technology company — it won’t be enough to unseat Apple from the top tablet spot.

“While we believe Surface will appeal to users looking for a Windows tablet capable of running Windows-based productivity software, we do not see it altering competitive dynamics in the tablet market,” said analyst with ISI Group, Brian Marshall, in an email Tuesday.

The Surface will probably be too pricy; starts out behind the iPad in critical component specs, especially the display; and most importantly, is a copy-cat that may lack sufficiently-compelling reasons for bypassing the original.

“This absolutely begs the question,” said Gottheil. “If the Surface is going head-to-head with the iPad, why not just buy an iPad?”

Much depends on what prices Microsoft puts on the Surface, something the company declined to disclose. Instead, it made vague references to competitive pricing, which many suspect hinted at numbers too high to entice customers, consumers especially, from opting for an iPad, a true notebook or a cheaper Android tablet.

Microsoft said the consumer-oriented Windows RT Surface would be “competitive with a comparable ARM tablet,” while the heavier Windows 8 Pro model would be priced similarly to “an Intel ultrabook-class PC.”

But that leaves enough room for a broad price range.

Microsoft on Tuesday unveiled a product aimed directly at Apple’s iPad, releasing a tablet called Surface. The new tablet will be available in two versions: One with the Windows 8 Pro operating system and one based on Windows RT.

Microsoft CEO Steve Ballmer kicked off the press conference, a traditional Jobs’ chore — and one Apple’s current CEO Tim Cook replicated at this month’s Worldwide Developers Conference — then handed the bulk of the event over to a succession of executives before wrapping it up.

“There’s not anything wrong in learning from successful competitors,” said Gottheil. “Even companies far outside the tech world have learned from Apple. You tell a story, show some passion and pay attention to the details of how you tell the story. [Apple's] formula is so good that even the charismatic-inhibited, like [Tim] Cook, can do it.”

And apparently so can the usually-emotive Ballmer, who was uncharacteristically low-key — another trait of Apple’s product announcements.

But Gottheil rejected the idea fronted by others that the Surface unveiling was a forerunner of a totally revamped Microsoft, one which would duplicate every aspect of Apple, not just its launch template. Those pundits have speculated that Microsoft will mimic Apple’s obsessiveness about control and will want to rule all parts of its ecosystem, from the hardware to the software to content to the cloud.

“I see [the Surface] as priming the pump,” said Gottheil. “Microsoft wants to establish the viability of the Windows tablet and get a foothold. But it doesn’t want to be in an Apple situation where it does everything. It likes the OEM model and it doesn’t want to kill off the very important licensing business.”

Microsoft has not committed to a ship date for either the Windows RT or Windows 8 Pro Surface tablets, but has promised that the former would debut around the same time as the next Windows’ release — most expect that in September or October — and said the latter would follow 90 days later.


One Comment

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  1. Consumer says:

    I’m a consumer.
    I have the iPad third generation and I’m dying to get my hands on the surface. I don’t care what the anaylyst say, I’m a consumer and I want one of these. There are many of my friends at school who have no interest in tech who are interested by these. Don’t jump to conclusions with articles like these, please.

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