Tuesday, June 19, 2012

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

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

Price may be major stumbling block to real competition, but Windows tablet could be enterprise winner, say experts

By Alexander Jacob
June 19, 2012 04:18 PM ET
Computerworld - Apple has little to worry about from Microsoft's tradition-breaking move to sell its own tablets, analysts said today.
Microsoft's new Surface, a line of 10.6-in. tablets that will run the company's forthcoming 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
The Microsoft Surface tablet, unveiled late on Monday, comes with a built-in "kickstand."

In pictures: Surface -- 'A PC, a tablet and new'
According to IDC, the iPad will account for 63% of all tablets shipped in 2012.
"I don't think Surface is a big hurt on the iPad," said Ezra Gottheil of Technology Business Research. "[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," said Brian White of Topeka Capital Markets, in a note to clients today.
Yesterday, 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.
As radical as that move was -- one analyst yesterday 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 Brian Marshall, an analyst with ISI Group, in an email Monday.
Among other things, analysts said the Surface will probably be too pricey and the specs of its critical components -- notably the display -- won't match those of the iPad. And most important, it's a copycat that may not offer sufficiently-compelling reasons for bypassing the original.
"This absolutely begs the question: If the Surface is going head-to-head with the iPad, why not just buy an iPad?" said Gottheil.
A lot depends on how much Microsoft charges for its Surface tablets. The company declined to disclose price tags yesterday. 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.
On Monday, Microsoft said the consumer-oriented Windows RT Surface would be "competitive with a comparable ARM tablet," while the heavier Windows 8 Pro model would cost about the same amount as "an Intel ultrabook-class PC."
But that leaves room for a broad price range.
Microsoft on Monday unveiled a product aimed directly at Apple's iPad, releasing a tablet called the Surface. The new tablet will be available in two versions: One with the Windows 8 Pro operating system and one based on Windows RT.

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