The winners and losers are already being sorted out following the decision by Microsoft Corp. (Nasdaq: MSFT) to launch its own tablet PC. Many industry observers say the software giant's OEM customers will be the direct losers. Others say Microsoft itself may regret its move, which is likely to irritate its PC partners.
Whatever the case might be, the decision obviously has strong implications for the electronics component procurement and manufacturing segments. After seeing rivals like Hewlett-Packard Co. (NYSE: HPQ), BlackBerry (Nasdaq: RIMM; Toronto: RIM), High Tech Computer Corp. (HTC) (Taiwan: 2498), and even Samsung Electronics Co. Ltd. (Korea: SEC) fail to make a dent in Apple Inc.'s domination of the tablet market, component vendors are bound to hope a new competitor would be more successful in taking on the world's most valuable consumer electronics company.
If Microsoft's Surface tablet succeeds, it may erode some of Apple's marketshare. However, my personal opinion is that it may actually help expand the total addressable market, making devotees out of folks who may want to buy a tablet but don't like the iPad, don't want to pay the premium Apple demands for the device, or are dissatisfied with the slate of alternatives.
Enterprise users may also benefit from Microsoft's entry into the tablet market. Many CIOs are finding that the days of companies dictating what platforms employees can use are coming to an end. In many cases, employees (especially senior executives) have fostered the bring-your-own-device phenomenon. They tell their companies the devices they would like to use (and have already purchased) and then request access to corporate IT systems. That's how the iPhone sneaked into enterprise messaging. Top-level executives simply showed up with the smartphone and asked CIOs to hook them up with the internal messaging system.
Surface users may find it easier to gain enterprise acceptance. I suspect, in fact, that companies could purchase the device for employees if it can be loaded with Microsoft Office applications. Many of us may dump our notebook PCs if the Surface can be easily hooked up to a bigger screen and keyboard in the office and taken on the road with a portable and ultra-light keyboard. In a press release, Microsoft discussed the keyboard that will come with the device.
The 3 mm Touch Cover represents a step forward in human-computer interface. Using a unique pressure-sensitive technology, Touch Cover senses keystrokes as gestures, enabling you to touch type significantly faster than with an on-screen keyboard... Touch Cover clicks into Surface via a built-in magnetic connector, forming a natural spine like you find on a book, and works as a protective cover. You can also click in a 5 mm-thin Type Cover that adds moving keys for a more traditional typing feel.
I already want one. If Microsoft wins customer acceptance for the Surface, many companies in its ecosystem will be the direct beneficiaries. These will include whichever company is selected to assemble the device. Microsoft is unlikely to manufacture the Surface itself, so it will be using a contract manufacturer. In addition, component suppliers and logistics services providers will see increased patronage from Microsoft. Already, Intel Corp. (Nasdaq: INTC) is expected to play a role. So will the IP licensing company ARM Ltd. (Nasdaq: ARMHY; London: ARM), which Microsoft said will provide the engine for one of the two variants of the Surface.
Logistics services companies can also expect to gain some business from shipping and delivering the Surface. Microsoft has indicated it would sell the device only online or through its own branded stores. This means freight companies will be pressed into service delivering the Surface to homes and businesses.
On Wednesday at 10:00 a.m. EDT, EBN will host a live chat on Microsoft's foray into the PC hardware market with Rick Merritt, an industry veteran and EE Times electronic systems analyst. Rick will answer questions on the potential impact of the Microsoft Surface on the electronics supply chain. He will also discuss the likely winners and losers and whether this move is even in Microsoft's best interest. Click here to join us.
It'll be a first--sorta--if Msoft works the bugs out of the product before the launch. OK, I'm still bitter about Vista. I'm game if the product is good enough...
That's good to hear. I hope MSFT can solidify itself as a competitor with Apple in all realms. It will bring back the fever rush that existed when the two giants were battling it out in the mid-90s. I hope it works out for them...
It's good reporting suggests both Microsoft and HP failed to get competitive Windows Anything tablets to market working more or less together and frustrated MS execs decided to go it alone.
They suggest if OEMs pick up the Surface design, or the pace of their own innovations, Msoft may staep aside. But that's a big if.
lbacker, I like your assessment. First, the company indeed announced two products, an upright laptop and a tablet. Second, the product is not here yet so we are free to speculate and whip up opinion and speculation, helping to drive interest ahead of actual debut.
This strategy worked for Apple and it's being effectively used by Microsoft. Finally, many of us who don't already have a tablet PC but are looking will hold off until the Surface hits the market. That will put a damper on competing devices (maybe not the iPad). I didn't want to say this before but I will admit I am waiting until I see the Surface to buy a PC slate.
We are all drooling for more details about surface. With the lack of facts many of us are trying to fill in the lines.
Perhaps this is the way it was planned. The Microsft event may have been a trial balloon. If so it was successful. What better way to ping your potential users to find out where the issues are?
It was early enough to allow reaction time for final polishing of the design, setting the prices, and developing marketting plans.
Most of the flack has been directed against the RT version. The laptop user response to the MP-08 version has been positive.
This will be a hit with the workers needing a light compact MS Office platform.
The facebook, electronic book, and social networking market will require lots of work.
This is really two, very different products. An ultralight laptop and a tablet. Apple is already established in the tablet market.
Sales over the internet is the way to go. Brick and mortar Stores for electronic devices are disappearing. Direct sales by Microsoft and use of EBAY and AMAZON should work nicely. I would limit physical store sales to the big box retailers: Sams, Costco, Walmart, and Target, etc.
Feedback has been mostly positive, with attached wish lists. Microsoft would be wise to listen and polish the real debut.
They need an out of the gate winner. They have the money, the talent, and the time to make it work. I hope this is an XP and not a Milenium or Vista.
I am delaying buying any tablet or slate until I see how this one turns out.
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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