Steve Ballmer watches from the stage as a video plays during the Monday event. (Todd Bishop/GeekWire)

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.

Reporters gather around tables for brief demos at Microsoft's Surface unveiling.

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.

Comments

  • Guest

    We see Microsoft Surface as an evolution of the laptop, not a competitor to media consumption appliances like iPad. Customers will get all the conveniences one expects from a laptop — video out, USB, a keyboard — with the slick interface of a media player. We predict that businesses which create, and which shun iPad for all but customer-facing demos due to its thin capability slate, will upgrade from Windows 7 laptops to Windows 8 devices like this one.

    • BillyBilly

      Who is ‘we’?

    • http://eyejot.com/users/davidg davidgeller

      Then the question for the new devices might be – are they better work devices than ultra-thin laptops built in the style of a Macbook Air? I can’t imagine typing on the new case-keyboard is really better than a real keyboard. And battery life will surely be sacrificed.

      Microsoft is trying to have it both ways – and that could be problematic. These devices, like an iPad, are NOT better for work computing than, say, a traditional, albeit thin, laptop. Apple created a new category and they’re killing in it. Can Microsoft do the same?

      One thing to remember is Microsoft simply can’t compete with their Asian partners for manufacturing. While they may have produced some stunning prototypes, several of the big Asian manufacturers could do a better job – especially in terms of supply chain management. Hopefully these will turn into reference designs.

      Unlike Microsoft, Apple, love them or hate them, have proved that they are masterful in manufacturing and, more importantly, supply chain management.

      • Guest

        We believe that Microsoft Surface will be an excellent work device. Its USB connection makes it compatible with the wealth of standard PC peripherals, making it “disappear” into a traditional workstation. Its Windows operating system will run both newer Metro apps and the legacy apps on which many businesses depend. In short, we feel that as long as Microsoft Surface is priced favorably compared with Apple hardware, which is likely, it will sell well into Microsoft’s current dominant channels.

        We, to address Billy’s inquiry below, are the people familiar with the situation.

        • http://eyejot.com/users/davidg davidgeller

          The USB connection as a “feature” and selling benefit is sort of silly. Except for occasionally plugging in a storage device – why is this important? What are the wealth of PC peripherals? Except for drives and USB dongles – what else did you have in mind? Though, since these two tablets are missing vital cellular data components (which are kind of important for mobile computing), I suppose you could stick in a 3G or LTE data dongle. But, that’s ugly and will suck power like a vampire.

          If “We” is someone from Microsoft (which you claim to be), it’d be more professional to remove the anonymous Guest moniker.

          While these devices might ultimately be successful (I hope so!), they’re searching for a problem to solve that current thin laptops might do better (for work computing) and iPads do mind-blowingly better for consumptive computing and entertainment.

          • Guest

            David,

            Many more devices beyond “drives and USB dongles” support USB 2.0. We encourage you to visit a Microsoft Store to view all of the devices that will make Microsoft Surface more pleasant. Data connectivity is one optional feature, although we would prefer wi-fi tethering to those unsightly data sticks.

            We are not affiliated with Microsoft. We are simply familiar with the situation.

  • Odog4ever

    Microsoft Surface = Google Nexus

    Note to OEMs: Don’t release mediocre hardware and you won’t have any problem competing with the Surface, period.

    Also the author states that people are clamoring to pay for yet another data plan with their tablets. Really? I guess I wasn’t following iPad that closely to notice but it seem unlikely considering the current pricing/data caps.

    • http://geekwire.com Todd Bishop

      Thanks for the comment. Just to clarify, my comment about mobile broadband wasn’t about pricing but about capabilities. People at least want the option of mobile broadband, and Microsoft didn’t say whether that would be available in the device at launch.

  • http://twitter.com/Cloudrocket Todd Shelton

    And remember…three devices and the cloud. Only Microsoft can bring that.

  • Matt

    “Microsoft should have done this a long time ago.”

    You’re right. But they didn’t. From my pov this seems like just another example of how Microsoft does not have the pace, drive or culture to lead in the consumer computing market. Apple and Google are simply too far ahead at this point.

    This move feels desperate and extremely risky.

  • http://www.facebook.com/paulcwatts Paul Watts

    In the short term, this could be successful as an “iPad for the enterprise,” an alternative for all the IT professionals who are tired of supporting the BYOD iPads on their network.

    It’s certainly possible it could make a dent against the iPad in the consumer space, but it will be a long road. Like the Xbox, success in that arena will probably rely on capitalizing on competitors’ mistakes.

    • keith

      how could it be an ipad for enterprise. OUTLOOK IS NOT INTEGRATED IN.

  • Jon

    Whether or not they realize it, the timing of this announcement is rather brilliant. There are quite a few people I know that were in the market for an ultrabook upgrade or buy-in, and they are all in a holding pattern until they see how this plays out. As long as the experience is as seamless as they are suggesting, the pricing is competitive, and they show some humility and make some swift decisions should the road get bumpy, (no more “RRoD isn’t a thing” or complete abandonment like the Zune), this will be the product that will start showing up in college libraries and coffee shops currently illuminated by the glow of Apple’s logo.

    I’m already looking to get the Pro Surface version just in time to use for working on my capstone project for my Masters. The fact that I have stylus support for image editing, a keyboard for coding and documentation, and a touch screen for simple interactions and usability testing makes this the perfect machine for a number of uses and applications. Had Microsoft approved further R&D and user research on the Courier, this would most likely have been the end result. The Courier was too niche; this screams possibilities. I won’t be giving up my iPad, but that’s not the point of this. It’s not to make me choose. It’s to embody what Windows 8 is hopefully going to be: the same experience across every device platform. Hopefully that comes to pass.

Job Listings on GeekWork