Smartphones and tablets pose a risk to Microsoft’s traditional Windows business. Meanwhile, the company’s Surface tablet computer will compete with its hardware partners and could make them less loyal to Windows in the end.
Those might seem like obvious statements to anyone who has been following these topics, but up to this point Microsoft hasn’t acknowledged them, at least not so plainly.
That changed yesterday in Microsoft’s annual Form 10K report, filed with the Securities & Exchange Commission. Here’s the relevant passage — a new addition within the larger risk factors section of the filing.
We derive substantial revenue from licenses of Windows operating systems on personal computers. The proliferation of alternative devices and form factors, in particular mobile devices such as smartphones and tablet computers, creates challenges from competing software platforms. These devices compete on multiple bases including price and the perceived utility of the device and its platform. Users may increasingly turn to these devices to perform functions that would have been performed by personal computers in the past. Even if many users view these devices as complementary to a personal computer, the prevalence of these devices may make it more difficult to attract applications developers to our platforms. In addition, our Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform.
Microsoft CEO Steve Ballmer has sought to downplay the notion of Surface competing with partners, recently calling the device “just a design point.” He told the company’s Worldwide Partner Conference, “It will have a distinct place in what’s a broad Windows ecosystem. And the importance of the thousands of partners that we have that design and produce Windows computers will not diminish.”
Elsewhere in the 10K, Microsoft reiterates that Surface will be released at the same time as Windows 8 general availability, on Oct. 26.
By the way, those reports this week about Surface starting at a price of $1,000 were bogus. Microsoft hasn’t yet announced pricing for the new tablet.
- key specs
- reviews • 36
- Form factorTablet
- Operating systemiOS (7)
- Screen size9.7 inches
- Storage typeInternal storage (16 GB, Flash)
- Maximum battery lifeUp to 10 hours
- Dimensions9.45 x 6.67 x 0.3 in
- Weight1 lb