The Lowdown on Microsoft’s Surface Tablet

Microsoft will initially build 300,000 Surface ARM-powered Windows RT and Ivy-powered Windows 8 Pro tablets, ramping up to between 3 million and 4 million units within the 2013 fiscal year, sources tell analysts. {complink 3426|Microsoft Corp.} will end its fiscal year June 30, and the company plans to announce fourth-quarter and full-year results July 19.

Pegatron Corp., which has plants in Taiwan, the Czech Republic, Mexico, and China, will build the RT model with 32GB or 64GB of storage. {complink 2125|Foxconn Electronics Inc.}, also known as Hon Hai Precision Industry Co. Ltd., will build the Windows 8 Pro model with 64GB or 128GB of storage.

Rhoda Alexander, IHS director of tablets and monitor research, told us that people have said the production targets are too aggressive.

The tablets will initially support WiFi access, rather than cellular. Studies have shown consumers are more likely to access the Internet from their home or office through a WiFi connection. Sources tell Alexander that Young Fast will manufacture the touch panels for the Surface, and Samsung will make the touch screen glass.

The build cycle for the two products will run about three months apart. Most of the companies manufacturing for the Surface also build {complink 379|Apple Inc.} products, such as the iPad and iPhone.

I can't help but wonder if success will push Microsoft to purchase or build its own manufacturing plants, as Hewlett-Packard has done, and whether it would make sense to bring production into the United States? Alexander estimates iPad shipments for the first quarter of 2012 at 11.8 million units. For Microsoft, reaching distribution levels substantial enough to compete with Apple will depend on price and partners.

“Unlike mini-notes which used a similar 10.1″ screen size, the Surface for Windows 8 Pro is less likely to have performance issues given its Intel Ivy Bridge processor instead of an Atom part,” Richard Shim, an NPD Group analyst, wrote in a DisplaySearch blog post last week. “Its detachable design is expected to join a short list of emerging form factors that are expected to come out toward the end of the year with the expected launch of Windows 8.”

One major hurdle: Windows 8 doesn't have a firm official launch date.

As much as Microsoft wants a piece of the tablet market, some analysts say the Redmond, Wash., company has hit a fork in the road. ABI Research says Windows will account for only 1.3 percent of tablet shipments in 2012, and the fragmented operating system strategy of Windows RT and Windows 8 could set the company back in terms of gaining marketshare.

Aside from the tablet market, Microsoft will attempt to take a bigger slice of the smartphone market. The same day Microsoft released information on its smartphone running Windows Phone 8, Nokia, HTC, Huawei, and Samsung committed to delivering the device this year. It will run on Snapdragon S4 chips from Qualcomm.

Microsoft has adopted a four-screen strategy designed to link content across smartphones, TVs, PCs, and tablets through a common operating system and cloud platform. This would enable the company to target ads across devices based on the Microsoft Live user log-in ID.

But hurdles remain. Microsoft's success with hardware has been limited to the Xbox 360. The Zune music player is failing, and Verizon stopped selling the Kin-branded mobile phone after about two months.

Will consumers and professionals give up their iPads for a Windows OS tablet? Or, rather than simultaneously shoving smartphones and tablets at a market becoming more enamored with Apple products, would it make more sense for Microsoft to release one and then the other? Let us know what you think.

20 comments on “The Lowdown on Microsoft’s Surface Tablet

  1. Cryptoman
    June 25, 2012

    I applaud the decision of having WiFi only versions to start with. That will reduce the cost of the tablet significantly which will encourage the users to give the new Windows tablet a shot (including myself). Another important point is how long will the battery of the new tablet last with an Ivy processor onboard. Atom processor was power efficient but I am not sure if Ivy processor has the same edge. Battery life on an iPad is really good. A fully charged iPad will easily last a working day for an average user doing typical tasks on a computer such as web browsing, text editing, emailing, listening to music and watching videos etc. Without matching the same level of battery life as an iPad, Windows tablets will really struggle to sell. Also let's all hope that Windows 8 will not have the famous 'blue screen of death' that exists in all the previous versions of Windows. iOS does not have that 'feature' that keeps all the users happy.

  2. Barbara Jorgensen
    June 25, 2012

    Ugh, another Apple vs Windows decision. The Surface sounds like it has some neat bells and whistles, but to give up the iPad and iPhone? It's more likely people such as myself that have yet to buy a tablet will make the go-with-Apple or not decision, rather than Apple installed users opting for a Windows device.

  3. prabhakar_deosthali
    June 26, 2012

    In my opinion Windows Surface will not even move the  APPLEcart by an inch. But it will surely get some acceptance in the developing countries if the price becomes attractive.

  4. Laurie Sullivan
    June 26, 2012

    If Microsoft plays out its strategy correctly it can gain the attention and money of consumers with an Xbox, similar to the way Apple attracted iPod users to iPhone and iPad. The real question for me is not if people will latch on to a Windows-OS tablet, but rather will the company want more control of the hardware build and bring some of it back into the U.S.

  5. Laurie Sullivan
    June 26, 2012

    Consumers will soon have a Google tablet decision to make, as well. Analysts expect that announcement this week at Google i/O. It will run the next version of Android OS called Jelly Bean. Gizmodo believes it uncovered a leaked document with the specs.

  6. Himanshugupta
    June 26, 2012

    With new open territories in the horizon it will be foolish not to take risk and try to capture some piece of the smartphone and digital information pie. Whether MS's tablet will be able to capture people's attention or not is still an open question but MS's bold step to jump into tablet and smartphone business is a good sign of thinking more than just software business, which is becoming a minion in today's world.

  7. bolaji ojo
    June 26, 2012

    Laurie, What would be the justification for bringing the production of the Microsoft Surface to the United States? I bet the design was done here and, as research firms repeatedly tell us, that's where the bulk of the profit is. The production assembly itself doesn't add much value to the process and the cost to the OEM like Microsoft is negligible. Why should Microsoft undercut itself in a match-up against Apple by insisting on local production especially when it is looking at global sales rather than just winning in the United States?

  8. bolaji ojo
    June 26, 2012

    Barbara, Right. Current iPad users may remain Apple fans while those who currently don't have a tablet PC or may be dissatisfied with the Android option may go with Microsoft Surface. You neglect a third option and that is those who already have an iPad and want a replacement but don't want to spend another $700 to $900 for a device that essentially performs the same functions as a much cheaper option. The iPad, although some people swear by it, is still a reader and web surfing device. It has nothing compelling that's limited to Apple.

    Microsoft Surface, on the other hand, if coupled with a nifty keyboard (something soft and foldable), USB port for external keyboard and possible attachment to a bigger screen for office use, could also come with the option of Microsoft Office. In effect, I would have the option of getting rid of my current notebook (I don't need the disc drive) and hitting the road all the time with only one device rather than two. That, I would say, might convince me to buy Surface.

  9. bolaji ojo
    June 26, 2012

    Prabhakar, Microsoft isn't targeting the Surface at Android necessarily. It is going directly at Apple. The battle may seem to be just about tablets but that's not Microsoft's main concern. The company has seen that it's software business could be in jeopardy the more successful Apple becomes. Rather than get itself stuck in the PC world forever, it had to decide whether or not it could afford to sit back and let surrogates do the fighting for it. HP failed, so did RIM and Samsung hasn't made any dent in the iPad domination of both the hardware and the operating system. If Microsoft didn't get in it would have its lunch eaten by Apple completely.

  10. SunitaT
    June 26, 2012

    Will consumers and professionals give up their iPads for a Windows OS tablet?

    @Laurie, thanks for the post. I think consumers and professionals dont mind buying Windows OS tablet because many of them are familiar with the Windows OS and moreover many windows applications are already available online.

  11. Ariella
    June 26, 2012

    @tirlapur Yes, I can see going for a Windows tablet because I am used to working with its setup on my home PC and woudl expect to pick up on ioperating it faster than I would with a completely new system.

  12. bolaji ojo
    June 26, 2012

    Ariella, That's the lure. Microsoft wants to play to its strength. It already has an installed user base. The PC partners it had were obviously failing to compete against Apple so it feels it can do a better job. Failure to do something could mean the end of its role in the PC market if smaller form factor devices overtake desktops, notebooks and ultrabooks.

  13. Laurie Sullivan
    June 26, 2012

    Bolaji and Ariella: I have an iPad. Rather than use it like most. It has become storage drive for digital movies. I think I would use a Windows tablet more often than Apple. Although my first computer was an Apple, I moved to Windows and didn't look back. Aside from the Xbox, Microsoft hasn't had much luck in getting consumers to adopt its hardware products. The idea to bring manufacturing back to the U.S. would give the company more control of the quailty. 

    I'm also looking forward to Windows 8.

  14. SunitaT
    June 26, 2012

    I am used to working with its setup on my home PC and woudl expect to pick up on ioperating it faster than I would with a completely new system.

    @Ariella, very true. I think many end users echo your point. They are used to MS office tools and OS. Many of them prefer MS over other open source based OS because of ease of use. 

  15. SunitaT
    June 26, 2012

    I'm also looking forward to Windows 8.

    @Laurie, I am also eagerly looking forward for Windows 8 tablet. Currently I dont own any tablets because the interface of android based tablet is pretty similar to the smartphone I have. So I would like to buy a tablet which is more powerful and userfriendly. I am sure windows 8 tablet will have those features.

  16. SunitaT
    June 26, 2012

    Consumers will soon have a Google tablet decision to make, as well.

    @Laurie, Do you think this move by Google to release its own tablet will make Samsung uncomfortable because Google tablet will directly compete with Samsung Galaxy tablet.

  17. Mr. Roques
    June 26, 2012

    I believe that should be Microsoft's biggest selling point. Full integration with their Office products. 

    The bad thing is that marketshare has big influence in consumer decisions. When you go with a company that has <4% market share, you'd expect the app environment to be the same way... Microsoft can pay companies to develop apps for them but you can't pay all.

    What do you think they can do about this?

  18. SunitaT
    June 26, 2012

    When you go with a company that has <4% market share, you'd expect the app environment to be the same way

    @Mr. Roques, why can't we install the existing softwares directly on this tablet ? Why Do we need another app when we can directly install the softwares because windows 8 is common to all kind of devices.

  19. syedzunair
    June 26, 2012

    Mr. Roques: I agree with you that MS usp is that its products can be seamlessly integrated with enterprise products like Office, Outlook etc. 

    Howvever, this does not mean that they would have a high marketshare because the perception of the consumer goes with the stats. Since, apps for the mobile platform are not that common for MS consumers either prefer iOS or Android. 

  20. Mr. Roques
    August 25, 2012

    Well, you can't simply install the same microsoft office that you have on your desktop/laptop. There has to be some modifications to it (for it to work properly on a tablet – dimensiones, etc).

    Its easier for microsoft software but when a third party can go for a bigger market (android, iOs), the will.

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