Pre-announcing your own Windows 8 tablet a few months before your OEM customers are ready to roll out their own products. Thatís not gutsy, itís just gross.
For years, PC makers have slavishly followed your systems requirements, jumped on your bandwagons (like Windows for Pen Computing), and this is their payment. When you think you have a solid product you rush to get in front of them hoping you can steal their sub-five-percent profit margins.
I suspect few will say anything publicly for fear of hurting their relationships with you, so I will say what they cannot. This is bad business.
You could have taken a lesson from Google. Work closely with one or two OEMs on a killer product that would show off the novel features of your software. Perhaps there really arenít any novel features to show off.
One source told me he heard Acer engineers describe this as a betrayal. ďMicrosoft wants to charge $80 to $90 royalty per Windows RT device while bring out this tablet under its own logoóitís unfair competition which will accelerate more adaption of Android,Ē he said.
(In my own interviews, I was told the per unit cost of a Windows license for OEMs is about $45.)
He reports an ODM company saying they feel they have ďwasted all the investment [on a] promised [Win 8 tablet] business [and] will have to shift focus again.Ē
If I was a mobile PC maker, I would be on the phone to Googleís Android team seeking a tight partnership.
Taiwanís PC makers have told me more than once they see Android as a better road to tablets than Windows 8. Itís free and it already has a well-established user base and ecosystem of apps.
The scant information on the Microsoft Surface tablet is unimpressive. It looks very much like a me-too system. I fail to see any compelling differences over the Apple iPad. At least Samsung was quick to market with its iPad-like Galaxy tablet.
Nvida was quick to note its Tegra powers the Surface. Frankly, this is one design win I would try to distance myself from.
I was amazed to read at their hastily called LA press conference, Microsoft did not even answer questions about OEM conflicts. According to the New York Times report:
"When asked whether Surface would damage those ties, Steven Sinofsky, the president of Microsoftís Windows division, gently pushed a reporter in the direction of a stand of Surface tablets and said, 'Go learn something.'"
Maybe someday Microsoft will reap great profits from a tablet business. But at what cost?
The innovation in the Surface is mainly in its chutzpah.
Rick, it's clear that you are not a Microsoft fan and anything that they would have done would have been met with disdain. Fine, but any Windows user would rather have a tablet that runs windows. In my mind, this creates a much bigger problem. Most Android Apps are free. Most Apple apps are a buck or 3. Most Windows apps are $50 to $500. Thus, if the tablet runs windows apps, how do you handle pricing?
If it is a vote of no confidence to PC industry it is a very bold move...they basically start competing with their own customers, rarely it pays to do that...my personal bet is that this product will be cancelled/sold within 2 years...Kris
How is this different from Google coming out with their own tablet? I tend to agree with the point of view that says Microsoft was compelled to come out with their own hardware because HP, Dell, Acer etc, could not be trusted to field innovative products on their own. It seems to be a vote of no confidence in the entire PC industry.
Perhaps they can get $45 or more for Win 8 Pro on that version of the Surface. MS has said that version will be priced comparably to Win 8 Pro ultrabooks. It seems to be targeted at taking a piece of that ultrabook market.
But the ARM-based version running Win RT is a lower cost unit that seems to be aimed more directly at the iPad and Android tablet market. In that market, the perceived value of Win RT is likely to be much less. MS has said this version of Surface will be priced comparably to other Win RT tablets, but it really needs to be priced somewhere between Android tablets and iPad to generate real market excitement.
The Win RT version of Surface with 64 GB is arguably comparable in hardware specs to a 64GB, WiFi-only new iPad, which retails for $700. A Samsung Galaxy Tab 10.1 with 32GB, WiFi-only, retails for $600.
That's a reasonable argument for setting the retail price range on the Win RT version of Surface somewhere between $600-$700.
It is left as an exercise to the reader to do their own BOM cost estimates (or look them up), but how much is the OS really worth to an OEM who must now compete directly against MS at the retail level?
I feel this is a complete betrayal. If Microsoft sells their own tablets competing with other OEM's like HTC and ACER, how the OEM's will generate enough sales. This will definitely discourage them to use windows 8.
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