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.
Photo: Bloomberg
“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.
Among the reasons that this change of strategy is dramatic is that it promised to make adversaries of partners that license Microsoft software to put into devices.
It appeared Microsoft was taking a page from Apple’s playbook by taking control of the tablet “ecosystem” from the hardware to the software to the delivery of digital content.
“It felt like they were channeling [late Apple co-founder] Steve Jobs at some point,” Gartenberg said of the Surface event. “This whole thing had a very Apple-esque feel and the only company that has been good at being Apple is Apple.”
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is