Microsoft CEO Steve Ballmer didn’t display any of his trademark over-the-top energy as he unveiled the company’s new Surface tablet computer yesterday at a hipster Hollywood photo studio. There was no fist-pumping, or bellowing, or excited repetition of words. His language was enthusiastic, but his tone was that of a person with a lot of serious stuff on his mind.
Which makes sense, because he’s risking Microsoft’s most important business in an attempt to preserve it.
With the announcement of the new tablet computer on Monday, Microsoft is making one of the boldest moves in its history, and also taking one of its biggest gambles. For more than 25 years, Microsoft has operated one the tech industry’s most profitable businesses by supplying the Windows operating system to a wide variety of PC makers.
Now, in a huge break with tradition, Microsoft is becoming a PC maker itself — competing with its most important partners.
Apple has forced Microsoft into action here. The iPad is taking a bite out of the market for Windows PCs, and Microsoft clearly decided that it needed to take matters into its own hands to combat that threat. Given Apple’s head start, it will be extremely difficult for Microsoft’s new tablet to catch up in the short run. But Surface appears to be a credible competitor, at least.
Microsoft should have done this a long time ago.
That’s my assessment after covering the unveiling in Hollywood yesterday. I’ve contended for a long time that Microsoft should make its own PCs. A computer deserves to be treated a singular product. The end-to-end experience — from operating system and core applications to hardware and accessories — needs to feel like it emerged from one development process, if not from one mind.
With these new tablets, at least, Microsoft seems to finally agree.
“With Windows 8, we did not want to leave any seam uncovered,” Ballmer said during the Monday event. “Much like Windows 1.0 needed the mouse to complete the experience, we wanted to give Windows 8 its own companion hardware innovation.”
It was refreshing to hear Windows chief Steven Sinofsky and other Microsoft executives take ownership of the hardware and express pride in the details of the machine — comparing the casing of the computer to the finish of a luxury watch, and likening the click of the Surface kickstand to the sound of the door closing on a high-end car.
The most interesting example, in my mind, is the “Touch Cover” that doubles as a multi-touch keyboard, with trackpad and special keys for the Windows 8 Metro-style user interface. When the cover snaps into the edge of the tablet, guided and attached by magnets, the Windows 8 desktop can be made to automatically match the color of the cover.
It’s a nice little detail — the type of thing that happens when one company develops the OS and the hardware.
But is this an iPad killer? That’s what everyone is asking. At this point, at least, it seems like a stretch to even put it that way.
First, there are a lot of unknowns. The quality of the overall Surface tablet experience remains to be seen. Along with other reporters at the event, I was able to hold a Surface tablet for a few moments, and get a feel for the quality of the hardware. But the company didn’t give us a chance for anything close to a thorough hands-on with any of the machines.
Price is another big question mark. The company said the pricing will be “competitive” with other ARM-based tablets (such as the iPad) and ultrabook computers. But we’ll have to wait to see exactly what that means. Among other things, we don’t know if the cover/keyboard accessories will come with the tablets or be sold separately.
I was disappointed that the company didn’t spend more time explaining how the core experience (beyond the accessories and chrome) will differ from other Windows 8 tablets. Microsoft was also mum on the question of whether the devices will launch with mobile broadband, a standard expectation for many tablet users these days.
Meanwhile, the company is taking a huge gamble by competing with its hardware partners.
Sinofsky declined to address questions on this topic from reporters after the event, gently rebuffing my inquiry and others. But the subject was clearly on Ballmer’s mind during the presentation, as he paid homage to the PC makers who will be coming out with Windows 8 PCs later this year, calling them out by name — Dell, HP, Asus, Acer, Sony, Lenovo, Toshiba, Samsung and others.
Microsoft is also cushioning the blow with plans to sell the tablets online and in its own retail stores, at first, not competing for shelf space with other Windows 8 tablets in Best Buy and other stores.
Windows sales on new PCs are a primary driver of Microsoft’s business. Maintaining the support of those hardware partners is critical for the company, and it just got a lot more tricky. I still belive it would have been smarter for the company to treat this as more of an extension of the Xbox business, to differentiate it from other Windows 8 tablets and compete with them less directly.
If Microsoft had been more proactive, and come out with its own branded tablet years ago, the market could be very different today. As it is, Microsoft’s chances of truly rivaling the iPad in tablet market share are slim in the short run. It could be many years at this point, on the scale of Microsoft Xbox’s long (and ultimately successful) struggle to catch up to Sony and Nintendo in the console market.
Microsoft is making the right move by attempting to create a credible competitor in the tablet market, and by owning the end-to-end experience. If the end result is a better Windows PC, it’s hard not to like this bet.