Microsoft’s decision to make its own tablet computer is a sign of frustration with its longtime hardware partners and a big bet on the technology giant’s future, according to analysts.
Microsoft’s empire was believed to be at stake in a gamble that it can dethrone Apple’s iPad in the tablet market, and weather the backlash from original equipment manufacturers (OEMs) that license its software.
“It’s a bold move by Microsoft, and it shows just how concerned they are about Apple and the threat Apple is to their ecosystem right now,” Gartner analyst Michael Gartenberg said.
“This is [Microsoft chief executive Steve] Ballmer pushing all the chips to the middle of the table and betting really heavily,” he said. “Microsoft is clearly all-in.”
Microsoft on Monday unveiled its first tablet computer, the Surface, running on Windows software, to take on iPads.
Ballmer described the iPad challenger — complete with ultra-thin covers-cum-keyboards in a range of colors — as a tablet that “works and plays” as he presented it at a press event in Los Angeles.
“It looks like a really nice product; well designed and well thought out,” NPD Group analyst Stephen Baker said.
Microsoft did not reveal when Surface would be available, or the prices for the various models, but it appeared the tablets would debut with Windows 8 operating software later this year and be priced on par with similar devices.
Analysts agreed that Microsoft had the components for success: impressive hardware, stunning screen quality, an online shop for “apps” and troves of films, music and other content at Zune and Xbox Live.
Microsoft recently announced SmartGlass applications that let tablets synch with its leading Xbox 360 videogame consoles and invested more than a half-billion dollars in Barnes & Noble’s Nook e-book business.
Microsoft also owns the Skype Internet telephony service.
The Redmond, Washington-based company has an ample war chest to invest in promoting its tablet.
What remains to be seen is whether Microsoft can put those pieces into a winning formula or whether it will repeat the failure it had when it launched Zune MP3 player hardware to compete with Apple’s iPod devices.
Independent analyst Rob Enderle of Silicon Valley hung blame for the flop on Microsoft’s shoulders, contending that the company did not give Zune the funding and resources it needed to be a market hit.
“This is Microsoft’s chance to show they have learned the lesson from the Zune,” Enderle said.
“This time Microsoft is really going to have to step up,” Enderle said. “With the right resources, this could work.”
While Microsoft could shrug off losing the MP3 player market to longtime rival Apple, it cannot afford to lose a tablet market with the promise of eclipsing and even replacing desktop computers, according to analysts.
“This time, if they lose, it is the desktop computer and with that goes three-fifths of Microsoft,” Enderle said.
“OEMs are saying that the PC doesn’t matter any more and that the tablet really is the future; which is what [Microsoft co-founder] Bill Gates said in the early 2000s,” he added. “It has just been unfortunate that Apple has been proving him right on their platform.”
Forrester analyst Sarah Rotman Epps warned that Microsoft could be “its own worst enemy” if it overwhelms consumers with configuration options and chipset choices instead of focusing on keeping tablets easy to pick and simple to use.