Err, new tablet, Surface.

It's 9.3mm thick, but in most shots I've seen, it looks 2-3x thicker than an iPad which itself is 9.4mm thick. My first impression is that the screen is way too small. They should have gone for something closer to the 10" iPad form factor. Hmm, I think the smallness might again be an issue with the images I've browsed. I just read a quick spec that says it's supposed to be over 10", however in a widescreen aspect. So that sounds good.

I haven't gotten many details yet because Engadget does their liveblog backwards with new content at the top. If it were already impossible to read/follow anything with this kind of layout, the page auto-refreshes so that while you're reading something the text will suddenly jump somewhere else on the page. Brilliant.

One gem I just picked up is that there will be multiple different tablets to cover the different flavors of Windows 8. Troubling.

damn, not even waiting till the event is fully over to come here and trash it. I think this is a record for you :P

The (basic?) ARM version actually looks pretty good. It's just that apart from XBOX (and mice I suppose), MS doesn't have a successful track record with hardware.

I do have an issue with MS's last-minute launch and muddled/fragmented Windows tablet strategy, but I'm hopeful this thing is going to do reasonably well. Apple needs some competition and as consumers we need to see some new original ideas. Apple continues to slowly iterate and Google continues to slowly regurgitate. MS seems to be doing something new - and something they in fact pioneered and put on the miss of the tech crowd in the first place (touch computing in the large-scale Surface product).

I think it looks cool. But I'm not as vitriolic as you so I'm probably wrong.

It doesn't *look* that bad IMO, it's just a bit troubling the lack of information; ok, so maybe it's not a consumer launch (because, well, it's not available yet) but no detail on price, battery life, screen res, wireless connectivity options...?

That seems a bit too handwavey to me. The main thing it would appear to do is to annoy vendors who announced they were going to make windows 8 products, like Asus. Nothing like competing in a market with thin margins against someone who doesn't have to pay an OS vendor!

Looking at it more, I'm intrigued. Probably not enough to jump back to the Windows ecosystem, but more interested then anything RIM or Google and their Android partners has done in the space.

Windows 8 (the Metro part) does work well on a tablet. It's going to be a strong competitor, much more sot then Microsoft's past attempts with XP Tablet edition. With solid hardware and software direct from Microsoft, this is also going to be a strong competitor against some of the companies Microsoft is currently allied with. I wonder how this will strain those relationships.

The keyboards (they have a tactile and pure touch version) looks pretty slick, and nowhere near as bulky as the iPad keyboard solutions out there.

The only thing I'm not sure about is the widescreen aspect ratio. I see this as a mistake that most of the Android tablets also make. Widescreen works well for desktops and laptops, but I personally find I use the iPad more in horizontal mode for reading and browsing. HP seemed to agree with the 4:3 ratio on the short lived Touchpad.

The announcement is a bit strange though with no dates or pricing information for either version. It will be interesting to watch the sales numbers of the ARM and x86 variants. I still believe strongly that desktop/laptop applications have no place on a tablet with a touch interface. The ARM variant is also more iPad like in portability, where the Intel one bumps that up a bit to the MacBook Air range. Microsoft is supporting a pen on the Intel version, so it may become pretty popular with artists. And perhaps the desktop style apps for that market make a bit more sense.

With an Apple iPad, your only decisions are: do you want a 3G modem, and do you want the super-resolution display? That's it.

With Windows, it's already much more complicated. Do you want ARM or Intel? What exactly are the tradeoffs? Performance? Battery life? Legacy compatibility? Which keyboard variant are you getting?

As to the Windows OEMs, I suspect that they're ambivalent about Microsoft's I-love-you-I-hate-you waffling. You engineer an ARM-based tablet. You get it running Android. You get it running Windows RT. You tweak the case a bit so you can give them different SKUs, and you offer both for sale and see what happens.

Since Android is "free" (although you need to hire your own devs to get it working on your hardware) and Windows costs money (and you may or may not need your own devs), it will be interesting to see whether Android devices end up costing less money. If that happens, Microsoft's in trouble, because for many consumers, there's Apple or Other, and Microsoft is lumped into the Other category. We know that Microsoft's solution to this problem is to try to place a patent tax on Android. We'll see how that shakes out.

Android is only free if you are also paying for Windows licenses. Microsoft has made that pretty clear in and out of the court room and it doesn't look like anything is going to change in that department.

Android is a great piece of middleware for many ventures, but for some OEMs and their product lines, it's really nothing but a giant anchor, IMO.

Google is trying to fight Microsoft on the Android patent tax. We also know that Motorola isn't going to pay it, since Google owns them. Maybe that leads to a cost advantage. We'll see how that all shakes out.

Personally, I'm surprised we haven't heard about any Microsoft - Apple patent suits. Maybe they quietly signed a cross-licensing agreement.

Microsoft didn't have anyone serving on the board at Apple, nor were they invited to be a deep part of the iPhone like Google was. Apple targeting Android with patent lawsuits seems to be mostly driven by the sense of betrayal Jobs had for Google/Schmidt, and his opinion that Android has stolen much from Apple.

Most of the other lawsuits Apple have been involved with are more defensive in nature. Nokia, Motorola, RIM, and Kodak filed against Apple first. Apple has been the plaintiff in the Samsung and HTC cases.

I haven't seen Google fighting MS yet where it counts, in the court room. So far they haven't intervened to prevent their OEMs from entering into agreements with MS. Motorola may be the holdout, but considering their position on the totem pole, it doesn't mean much.

But Google has been acquiring patents like a Hungry Hungry Hippo lately, so maybe they'll enter the ring at some point. I don't think it's any coincidence that the legal maneuvers have so far not been between the primary parties themselves.

Personally, I don't believe software or processes of any kind should qualify for patent protection (anywhere), so my ideal outcome would be for every one of these (and other such) patents to be invalidated. I won't hold my breath for that to happen. Things as they are, if MS and Apple ever did pool their efforts to go after Android on a legal front, it would be explosive. The odds-maker in me sees it as at least 10-1 in favor of MS+Apple.

Although in this case beaten in turn by Penny Arcade who were required by their own publishing schedule to trash it before the event even started...

Peter

The way I understand it is the only choice you have is which form factor do you want, tablet or 'ultra-notebook'. Well, that and the size (which is dependent on the form factor). The keyboard and processor are attached to the form, you can't ask for an ARM ultra-notebook - it doesn't work that way.

Of course, if the article I read is wrong, then ignore all this :P

And don't get me started on the keyboard. No-one ever asks if you want a dvorak! It's just qwerty, qwerty, qwerty. I can't even install a dvorak keyboard on my iOS devices, without jailbreaking. Piece of shite, that's what it is. It's goddamned pictures on a screen. How hard could it be? I can't believe Apple gets away with releasing such rubbish.

First time I ever heard of Dvorak was on our //c. It was a push button on the top of the keyboard to switch the layout. Talk about regression.

In the context of a touch screen, it's unclear that either QWERTY or Dvorak is the right answer. Dvorak was optimized for eight fingers going all at once, which isn't at all what you do on a touchscreen. QWERTY was optimized to maximize the likelihood that the type-bars on old typewriters wouldn't collide (so you want a lot of horizontal distance between adjacent key presses). When you think about trying to disambiguate a word being slammed out with lots of errors in it, the QWERTY layout isn't a bad place to begin, because anything that would have lots of near-adjacent key hits would be more likely to be ambiguous.

Consider, for example, the way that Dvorak puts all the vowels together on the home row. That's fine when you're on a keyboard but it's disastrous if you're fat-fingering a smartphone, since there are lots of words with consonants in the same position but different vowels.

I suppose the jury is still out on the absolute optimal way to do text input on a touch screen. I love SwiftKey. Others love Swype.

It'd be nice if iOS allowed the installation of additional keyboards easily. The last I recall apps could define their own but that doesn't extend outside of its sandbox. I would expect that with a taller iPhone screen coming, we may see some keyboard changes in iOS 6. A version with numbers on top would make a lot of sense - PITA having to flip between letters and numbers. But then it's a PITA flipping to reach for a comma or question mark too.

Heh. SwiftKey solves all those problems and has for years.

I can't make this stuff up:

http://www.engadget.com/2012/06/20/microsoft-introduces-windows-phone-8/

So MS can't even support software on phones released in the same year as their new OS. Shameful.

It looks to me that MS doesn't really have any long-term strategy at all. IMO, MS platforms are not a safe bet for investment. I only see them losing more ground in enterprise, despite their new hardware non-announcement.

They put one hand out to greet you and slap you with the other one. Tsk tsk tsk.

I think what we are seeing is their attempt to be a more unified company. It's going to remain messy for a while, and I have to wonder if the management there is even capable of pulling it off right. So many of the problems I've heard at Microsoft stem from way too much middle management, and huge rifts between divisions.

Getting people really hyped up for the Lumia was probably a mistake. Burning the few Windows Phone 7 customers prior to the Lumia probably could have been handled okay. Now they are going to burn a lot of big supporters too, who saw the Lumia as the true start of the real phone effort from Microsoft.

It's going to be interesting to see what happens with Windows 8. I think the tech looks really good- but it also seems that MS is throwing absolutely everything at competing with the iPad. And I suppose they probably have no choice. I just worry that no one will ever compete with the iPad no matter how good the tech is.

Windows 8 is a game changer for sure- but it might be MS jumping the shark and handing the reigns over to Apple.

I just got back from TechEd in Orlando, and what concerns me was the almost total lack of acknowledging that the iPad exists. They talked about tablets in general terms and of course were touting machines that will run Windows 8. And I get it- all they can do is promote their stuff. That being said, talking about tablets and promising developers tools to develop on these platforms without even mentioning the iPad is essentially ignoring the elephant in the room and it's hard to treat the presenters as credible sources of information.

I mean just a simple, "guys, we know the iPad is huge and it's a platform a lot of your potential customers use, but we are confident based on studies that Windows 8 tablets will rival iPads by the year 2014 and you will have a solid customer base to which you can sell your software" would have at least allowed for hope that MS is on top of things. Right now it seems like they are playing catch up and don't even realize it.

I don't think MS is in any danger of going away, but they don't seem to have a clear idea of where it is they're going period. IMO, Windows 8 seems not quite ambitious, but conflicted.

I disagree- I think they are very clear on where they want to go. Whether it is achievable is my question.

And I know they aren't going away any time soon, but if the windows tablet doesn't take off they are going t have lost a LOT of momentum.

Basically, this isn't like Silverlight. That idea failed but they had lots of other competing tech to fill the gap. Here they are putting all their eggs in the basket of Metro apps being the wave of the future- they are going to be hurting big time if they can't get traction in the market.

Meanwhile they have totally alienated phone manufacturers and the developer community...

Surface: I am just sold to the concept. Completely.

I love virtually everything of this thing. It's a tablet form factor, and it's a real PC. And there's a thin cover/keyboard.

And it has Windows 8 which I've come to just >>love<< on both a Lenovo X200 laptop, and on a Asus Nettop, even without a touch screen, and even as a HTPC where the big tiles are just so good on a large Tv screen. I mean, most/all things many hate I just love, which I fing intriguing. The catch-all corners, and the new so-hated-by-many start screen which is just so good and fast, the absence of clutter anywhere, the speed at which you now reach most settings and advanced features, it just good. One for all, the right-click menu you get when you have the pointer at the bottom left, just includes all of the reasons why I would still use the Start button, but it saves you all the submenus and intermediary windows. If they only addressed the Network and Sharing Center crazyness that same way.

in any case, I can't wait to get one, and I am afraid to admit to myself I'll be willing to spend money on it.

I even find it good looking, which is usually never the case for most laptops/ultrabooks/tablets unless it's Apple (which I end up disliking in other more relevant ways, but still find beautiful).

On the other end, I just don't get the RT version. I will never consider it. I dislike just as I do the iPad. Yes, admittedly it comes with a serious version of Office in a dignifying desktop environment, which makes it a bit less useless, but still, no, thanks.

One thing: why it does not come with Thunderbolt?! That's disappointing.

Thunderbolt means PCIe and it is unlikely the ARM RT has PICe anywhere in it.

And apart from that, implementing Thunderbolt is still expensive, too expensive if you are trying to match iPad prices.

And of course the current connector is still far too big for a tablet (though I realise there is no reason why they couldn't use another smaller connector).

Sorry, my wording was confusing: I meant, why Surface Pro does not come with Thunderbolt? Again, RT is of no particular interest to me. I'd happily cash out some more money to be able to expand Surface with, for example, a powerful video card when docked.

Really? It's about half the size of USB-A and about twice the size of microUSB. Hardly gigantic.

It isn't twice the size of microUSB, eyeballing it it looks more like just over 3 times the thickness. The thickness of the Thunderbolt/DisplayPort connector is over half the thickness of the iPad 2. You could only add a Thunderbolt port to a tablet the thickness of the iPad by letting the ThunderBolt port drive the case design (either by making at least one side flat, adding a large hump or some sort of fiddly fold down port).

I guess the x86 Surface will be a bit thicker than the ARM one, so I imagine that one would have space. But I wasn't really thinking about chunky x86 based devices when I was talking about tablets

In fact, it would appear that the 15mm thick Surface Pro does have room for a Mini DisplayPort/Thunderbolt connector, because it does have one (DisplayPort that is)...

AFAIK, Surface Pro comes with DisplayPort but not Thunderbolt: these were the rumors around its presentation times and pictures seemed to suggest that was the case. But, who can tell (yet).

Edit:
Actually, specs from www.surface.com do mention MiniDisplayPort but not Thunderbolt (x86). That sounds somewhat "official" to me. I doubt specs will change for the better as we get closer to release.
Personally, that's too bad. With Thunderbolt and related expansion possibilities, that would have been almost my ideal tablet.

Ok. I'll take that back if the pricepoint of $199 is true, and will buy one on day one. Actually, I may buy one on day one even if it costed $299. In addition to the Surface Pro which I'd buy on day two, if it stays <$1000.

I'm not sure how they'll sell it for $199 while also paying Apple for the design patents. Unless of course they're taking a significant loss.

Surface may guarantee that other OEMs stick with Android. Which may not be such a bad thing for Microsoft considering they're making money there too.

IMO, this was the only reasonable play for MS, it's just a shame they're (so far) realy bungling the positioning/marketing. No more "metro," the UI is now called "Windows 8 Style" - what happens when Windows 9 comes along? MS has really been failing in the strategy department since Windows XP. I'm not confident Microsoft will hold on to their long-established desktop-OS lead long-term.

I actually think $199 (if true) is a winning strategy if the loss per unit (assuming there is) is contained enough, as profits would come in from other sources, assuming sales are as good as one (I, for example) would expect with such a low price. While for some people, as myself, the few existing apps + real office alone (well, and printing, and access to the FS) would make Surface RT a much more interesting option than the iPad even if they had the same price tag, at this price it would be a no brainer choice for many, many customers. This would be a strong push towards the MS Store and related ecosystem, which is the real weakness of MS at this time. MS Mktg to me looks very good in these days. They may even fix brand perception, at some point, which would be unprecedented. Can u imagine? People sticking the MS logo just as they do with the Apple one on the back of their cars. Just the though of it makes me laugh.


P.S.:
"Windows 8 Style" is no more. "Modern" is possibly the new name. or whatever.

I'd expect printing support for Windows RT to be limited similar to iPad printing. Many printers have shifted part of the process into the drivers, and this is going to require a rewrite for Windows RT.

Surface Pro with the x86 Windows 8 won't have this issue, since any driver written since Vista should just work fine, and possibly older XP drivers.

It seems it will be significantly more extensive since day one. We'll see if that's actually true.

There are strong rumors to indicate that Office will be released for iPad this fall. Microsoft would be shooting themselves in the foot not to release it.

Selling Surface at a loss would, without a shadow of a doubt, completely infuriate every Windows OEM on the planet even more than they are now. This would not be a good strategy going forward unless Microsoft intends to sever ties with OEMs as part of their broad goals.

Microsoft has a long road ahead of it. The only traction "Windows" has, is on the desktop. For mobile it's "less than zero." The general public doesn't actually want "Windows" they just want the most popular OS that they perceive is compatible with everyone else. That's always been Windows for the desktop, but Windows RT isn't going to have this draw.

And guess what happens if Windows OEMs stop supporting the platform? Microsoft can't hold the kinds of numbers it used to have without its OEMs. Not in the current market and not with the current company structure/mentality. This would need a long term fundamental shift toward Apple's model.

Yes, and assuming it had the very same feature-set as the "actual" office, that would turn the iPad into a much more useful device for many (myself included). Unfortunately, I doubt it will in fact be released in the short term, unless in a much more simplified version.

Whether MS takes the friendly or hostile approach to the iPad via Office, though, largely depends on the nr. of WinRT units they succeed in selling in the short term. If in high numbers to the point that the average customer start asking himself which way to go, Office as a concurrent driving force towards WinRT (=> increase in Apps and ecosystem) rather than iPad would make more sense. If WinRT is not as successful and the iPad stays the totally dominant device in the non-x86 tablet segment, probably Office on iPad will generate instead more profits.

I don't share at all your confidence in one outcome (or the other); especially at $199, it is well possible to see millions of WinRT sold in the (very) short term. That may change the scenario quite a bit, (and for the better, I would say, considering the hw and software quality of Surface and some other - Lenovo, for example - WinRT devices).

I think time will tell.

Keep in mind I was just relaying the (looking likely) rumor about Office for iPad. However, I don't believe it will make much difference to iPad sales one way or the other. You can already buy Keynote, Pages and Numbers for iPad, Apple's own office-like set of programs. Many will argue the desktop versions are better than their Office counterparts in many ways.

As far as iOS office versus Windows office, who knows. The rumors indicate it will be similar to the RT version. Office for Mac has always been pretty good, and again many would argue even better than the concurrent Windows versions.

Plenty of people think Microsoft is a giant train that's just going to run everyone else down. That may have been the MS of 15 years ago. Today they're still big, but no one at Microsoft is fooling themselves about who the "800 lbs Gorilla" is in the consumer space today. I'm sure some of them even realize that for MS to flourish doesn't mean Apple can't. MS is in much bigger danger from Google at this time (again, the OEM business).

Yes, I think so too.
I was instead considering how MS could use Office to foster sales of Windows RT tablets. Yes, very high Windows RT device sales would indeed impact on iPads sales, but I find hard to say by how much, because tablet market is expanding significantly, and there will definitely be room for more than one big player. I suppose the question is more wether or not MS will succeed in being one of them.

More excitement: Maybe Microsoft will release a $199 tablet. If they're selling hardware at a loss, versus Google breaking even on the Nexus 7, that would be very interesting, for among others the hacker community who would find a way to port Android to the thing.

Yes, I would guess that Android on SurfaceRT will happen in any case, "for fun and profit".

Let's get this myth out of the way right now. Google are *not* breaking even on their tablet. COGS is more than just BOM, and there's no way in hell that COGS is under $199/unit. Costs will drop, but initially, Google are putting a lot more in than they're getting out. That means they're losing money.

Personally, I think MS would be stupid to enter this race trying to play the console game. It's not the same thing and I'm afraid they'll get badly burned for it. There's nothing wrong with a $199 price point, but losing money is not a workable long-term strategy. It's possible, though not probable, that they can make a tiny bit of money at $199. I just don't see how at this time. Maybe their deal with Apple didn't involve any monetary expenses. Maybe they're in this only to disrupt the current market - again, unless you're intending to make money, it's not a workable long-term strategy.

We'll find out soon enough. We'll also see what Apple has planned in a couple of months. There's one thing I know for sure however, it's that Apple will not be selling their product at a loss or even a break-even amount.

The bill of materials on the Nexus 7 is allegedly $152. Manufacturing + shipping, I dunno, but if they're not breaking even, it's certainly close. Also, that's for the 8GB version. Add another $50 for the 16GB version, and maybe they're more balanced. Certainly, they're not making a killing. What they are doing is changing around the market.

I didn't mean to imply they're making money at all, but in fact losing. You can't sell a product with a BOM of $152 at $199 for any kind of profit, that's plainly obvious, but breaking even would still be a pretty big challenge. Remember that this thing is made by ASUS, and it's unlikely THEY're going to eat a loss, therefore there's little to no chance that Google is getting it as low as BOM. Add in manufacturing costs, documentation, packaging... Nevermind the software development....

Back to Microsoft. This giant is really showing it doesn't have balls lately, which is a shame. IMO, the whole "Metro" name debacle should have had Microsoft swinging the big hammer - they should most definitely not have backed down from that name. Metro AG be damned. There are other Metro trademarks around the globe, but the OS UI moniker is hardly a trademark violation against the name of a SUPERMARKET.

Now MS is disallowing the use of the word "Metro" in any app submitted to its store. So forget about a "Metro Map" app. What is even "Metronome" and "Metropolis" get blocked?

I think the point of a $199 price point is to get their foot in the door. If MS can't get into the tablet market, they are going to be hurting in a few years on the desktop side of things. If they can handle a loss and get people comfortable with their OS in tablet form, they can keep their share of desktop users.

I polled my three coworkers today (of the four, two of us have tablets- one iPad and one android). I think all four of us would pick up the $199 model if that's really the price point. I don't know about the other iPad users in the office, but I can see MS getting their new OS/approach to apps out there very publicly if they can pull off $199.

What happens if (when) Apple release a smaller iPad at $199? Should MS try to beat that price point taking a larger loss?

And let's suppose that MS gets in the door as far as unit sales go, and moves to a comfortable number 2 in this space thanks to the loss-leader Surface. How many sales of the higher priced x86 units will they have cannibalized? How many OEM sales suffering the same fate? Where will they make money, from transaction fees on app sales through their store?

It's a tough road - and this isn't the console market where this kind of thing has been done a few times before with marginal success.

They're going to be losing a boatload of money selling a 10" tablet at $200 and probably completely destroy the market for any/all licensees. If they can hold out a few years until the technology costs allow for a profit, I suppose it could pay off. But that's a big if and then some serious deficits to make up for. All in a market that is already completely dominated by someone else. MS has been down this road before with Zune.

Now that this rumor has received such press, what's going to happen if the tablet comes out at $299 or $399?

Indeed a tough road, but your point here is what I find very interesting: tablet's market is VERY similar to that of the console, and from this perspective a consle-like approach could make very much sense. It seems to me that an almost irrelevant minority buys a tablet for what it can do (and indeed it can do good things) - no stats or sources here. Just my best guess -. Most people buy a tablet because it is "fun", because of the games and apps available. Or for what it means socially, or because of some form of peer pressure; or so that "children play with it". I have tens (actually more!) of example in my mind right now where people I know got the iPad for the very same reasons why you would buy a new wrist watch, or a new a bit expensive toy (like a console). Most people I know or hear of, don't have clue of what a Tablet is when they buy it, and yet they do. It's the "to do" thing these days. Clearly it is a set of people who are not in this BBS.
This is entirely different than the PC market.
Microsoft needs to have people touch and feel for themselves how "fun" it is to use a WinRT/8 device (assuming it is. I literally loved using it like no other OS ever, but others supposedly hated it like no other OS ever), and create a social phenomenon around it.
You won't beat the iPad with features only (unfortunately), or price/performance ratios. You have to put it in technologically unaware ppl's hands first, and then make it "cool".
See, now that I think about it, it seems to me that what they also really, really need is a great Facebook App. The iPad one is very limited, Android one is too, WP one is just as bad. Once an hypotetical Facebook App for SurfaceRT becomes widely known as "great", Surface RT will sell like bread for $500, I think I am being sarcastic here, of course, but the idea behind the joke seems to be quite valid, if I observe ppl around me. I'd be curious to read some more accurate mkt research.


A very tough road, and not at all a crazy one.

I agree it's a tough road and very likely to end up at the same place as the Zune, only with more detrimental effects to the company. I also think that MS really needs to connect with a hail Mary here if they want a future. The iPad is a HUGE threat because people are doing on it what they've traditionally done on PCs.

In my own house I almost never use my PC except as a media content provider- and that is certainly not a strength of the OS. Almost everything I used to do on my PC I now do on my iPad. Why? Because its convenient to carry around and just turn on and use whenever I want it.

Sure MS has the workplace for a while, but now many years will it take of people not using their products at home before the natural shift occurs to not using them in the workplace either? Already when we go to our planningmeetings where we need to update our project plan we have a mix of iPads and laptops in attendance.

The whole Windows 8 approach is evidence that MS takes the iPad threat seriously- they are fundamentally changing their OS usage pattern so they can try and compete. This absolutely must not fail from their perspective- this isn't like Silverlight or the Zune where it's a part of their strategy that can be jettisoned if it doesnt work out.

And if they fail (which I don't see unlikely)? We'll all move on and adapt. That's the free market for you. But I do hope someone is able to challenge Apple and give them a good run.

And yes, I typed this post on my iPad.

Jeff, I'm in total agreement with your thoughts.

Taym, the tablet market is not really like the console market and a number of important differences make the loss-leader strategy an entirely different beast especially. Consoles have a product cycle of at least 5 years - that's a significant amount of time to amortize development and to lower BOM costs. Tablets are refreshed every 6 months to a year, constantly pushing the fringe of current technology.

Consoles have only a small number of companies even attempting to monetize the platforms. Traditionally 3-4 hardware producers and a very small number of software publishers. There aren't 20-50 OEMs also trying to compete on hardware sales here. The hardware produces, also the platform licensors, take a large royalty or license fee for every piece of software sold from every publisher.

As far as the "irrelevant minority" purchasing tablets... Apple are already the industry leader in profits. If you include iPad sales, they are also the industry leader in mobile computers by units. By more than double HP in second place as of this past May. I'll give you that "OTHER" tablets may be insignificant, but the iPad is anything but. It's been a major disruption in portable computing.

For an insignificant product it sure did light the industry on fire with absolutely everyone producing or attempting to produce copycat products. And lastly, as Jeff mentioned, Microsoft's entire focus and strategy has shifted. MS is betting large on the tablet.

MS just need to wake up and realize that they are a software company, not a window company. Not everything needs to have Windows and there's plenty of money to be made with other software.

Of course, but not my point. What I mean is: just like consoles, you (=most people today buying tablets, that is not somebody who would be on this board)don't buy a tablet, or I should say the iPad, becouse of its inherent technical feature set, but because of the Apps and Games available, and also very very much because of peer pressure, and other social factors (which I mentioned in my previous post). So it is crucial to create a social dimention to a platform, which explains the attept - assuming the $199 is real - to just bring millions of units in the market to begin with. You need to get a tablet in those people's hands.
Once you succeed in making your platform popular enough, then the ecosystem is there. There does not need to be a Surface2 at $199. Depending on how successful they are with this strategy, this approach may actually make a lot of sense.


No, no, the "irrelevant minority" is that of those buing tablets because of what the tablets can do versus those who buy them for other reasons which I listed before, most times not knowing at all what the iPad can or cannot do. Please, read my post again if you wish and sorry if I wasn't clear. My English may be failing me as it happens.

I didn't know that you knew my wife!

She has an iPad that she got to replace the netbook that she got to replace the laptop that she got to replace the iPod Touch that she got in addition to her iPhone. None of which she knows how to operate in any but the most rudimentary fashion. That is, she makes and receives phone calls on the iPhone. I think she one time looked at an email on the Touch. I put Rosetta Stone on the laptop, but she never ran it. To the best of my knowledge she has never used the netbook. She takes the iPad on trips to read her email. But, by golly, she is proud to know that she has all the latest toys.

tanstaafl.

Taym, I agree about the social/title/app availability thing. Your English is great in fact, but thanks for explaining what you meant with the previous comments, I understand now, and of course you can see I originally thought you meant something else.

So on the one hand I can see the same things and appreciate the motivation for such a fire-sale strategy, I just question its long-term success for this type of product/platform. It's a very risky move and I can't think of any examples where someone has introduced something at a loss and then later started making profit on the device by increasing retail pricing.

That is just... I dunno, words fail me. But, wouldn't you know it, Jeff, just like always when you and I get to talking it is about a difference in religion.

I cannot imagine trying to use an iPad in place of my computer. A quick look through my "Programs and Features" in Control Panel shows a LOT of things an iPad can't do, because an iPad is NOT a computer. Below is a list of just some of the applications I use most regularly. There are many more that are used only occasionally. Probably some of these can run natively or have their complements with an iPad, but there arenone of these that I can do without.

APPLICATIONS
Adobe Acrobat
Agent Ransack (Directory tree print utility)
Audials transcoder & DRM remover (audio)
AVG Anti-Virus
Calibre eBook management & transcoder
Clip-Trak Windows clipboard manager
Copy-Trans Manager
dBpoweramp
Epubor DRM removal tool (eBooks)
Garmin MapSource
HyperTerminal
Infothek scanner software
Karen's replicator (backup software)
LastPass password manager
Microsoft Office 2010
Nero CD/DVD management
Net Transport (fast download utility)
OverDrive Media Console (download audio from public library)
Quake III Arena
Rio Emplode (!)
Rio Music Manager
Rosetta Stone
Switch file transcoder
TomTom Home map updater
Total Recorder
TurboFloorplan (architectural design)
Vuze torrents downloader
Winzip

PERIPHERALS
Maco-capable keyboard
Fujitsu scanner
HP Color laser printer
CD/DVD player/burner
Altec sound system
Webcam
External HDD (2@)
USB charging stations (6@)

Unlike many people, I use my PC for relatively serious (to me, anyway) work. It is not a toy to carry around and do bits and pieces of odd jobs with.

Clearly, YMMV

tanstaafl.

In the 1970s, SunTour and Campagnolo totally dominated the bicycle component market, SunTour on the low end, Campagnolo at the high-end, professional level. Don't laugh, that is a multi-billion dollar business.

Shimano came into the market with equipment priced at or below SunTour level and of equal quality and far better functionality than Campagnolo, selling at a loss for long enough to become the dominant supplier. SunTour is either gone or a very small niche player, Campagnolo is still there but a pale ghost of its former glory, and Shimano components are perhaps the costliest (and best performing) available.

tanstaafl.

In my direct experience, which of course is not a scientific study of any sort, 99% - or maybe more - of the people I know who own an iPad are exactly like Doug's wife, albeit to various degrees and in various ways.

And I don't mean it in a negative sense. It is perfectly fine to me that people buy whatever they wish for whatever reason they choose. It is a fact that I observe. The iPad is very largely a social phenomenon. You can't fight that type of war only with a rich feature set, or with the promise (as real as it may be) to offer the same potential than a laptop if you wish, or stating that you'll bring the effectiveness of the same UX across many devices types, or witha device that can join cirporate domain, access NTFS+ACLs, print on your shared network printer at home or in the office - all great things for me, all reasons that I very much like MS approach with Windows 8, besides liking the OS per se. Those are all order winners to me.

But my point is that's just not enough. You can't rely on customers evaluating some technical benefits if most of your customers could not care less about technical benefits, provided a basic feature set is there.

I think not only MS needs to have many Apps and the right ones; which means establishing a strong ecosystem. But also and even more importantly MS needs a toy to be perceived as a valid alternative to the cool toy - iPad; it needs to be "the latest toy" to make many customers curious and then proud to own it, even if they just use it to scroll pictures or play mp3s. Nothing to do with whether or not it comes with an x86 cpu, or if it can run real office, or if it grants access to the NTFS file system+ACLs, or if it can join your corporate domain, or if it can print on your shared network printer both at home and in the office. , etc. etc.

I actually see little alternatives there other than >also< using a fierce price battle (even though $199 is very, very low and may be too much to sustain) because you need to put the new toy in people's hands to begin with.

Indeed I see interesting things happening before year end.

The $199 price point is magical, in that it gets into many people's "sure, what the hell" toy budget.

Amazon figured this out first with the Kindle Fire. Everybody else is piling in after them. Maybe the $199 Microsoft Surface will be a 7" tablet, just like all the others. Maybe Apple's 7" iPad will also clock in at $199 for the base model. It seems like Amazon established the right baseline, and the next challenge will be who can first hit $149 or $99.

For what it's worth, I've seen a bunch of incoming college freshmen coming through my office this week and it's interesting to see what computers they've pulled out. Most have oversized monster laptops from Dell, HP, and the like. One had a three-year-old netbook. One had an iPad plus Bluetooth keyboard. I didn't see a single MacBook Air or equivalent PC ultrabook. I'm not sure what that says...

It says that they haven't yet realized how much walking they're going to be doing on campus yet.

Maybe Microsoft will release a 7" tablet. But they haven't prepared any developers (that we know of) for that size, with both Surface announcements comprised of 10.6" displays.

The important differences between Apple and Amazon in the tablet space are that Apple won't release hardware that's a dog. And they won't sell it at a loss. That's great for consumers and great for stock holders.

It also says that they haven't learned how these monster plastic-cased laptops have a half-life of two years.

Even the one Mac laptop that I saw over two days of advising was a 15" model, and not the new super-thin variant. This trend, assuming I'm looking at a decent random sample, says that Apple is in some trouble with the college crowd. Used to be you'd look up at a college classroom and everybody had a Mac. My sample, at least, says this trend might be turning. I asked one student about it, and it boiled down to price. Sure enough, Dell will sell you a 15" laptop "starting at $399". Apple doesn't go there. Sure, that Dell is slower (Core i3 processor, 4GB of RAM, 500GB hard disk), but it's still perfectly serviceable. They probably didn't buy the extended warranty.

One student was complaining that her Dell kept rebooting all the time "probably from my anti-virus software".

Sigh.

Dan, I noticed more or less the same. Our freshman students' own laptops are most times huge and one of the recurring reason (sometimes we openly ask) is that they want a "real gaming PC". Interestingly though, since they also receive laptops from us when they enroll, 30% of them ends up picking a Macbook over a Lenovo Laptop. I guess Lenovo laptops we provide are not "real gaming" enough, and Apple increases its appeal compared to that. My guess is that often college students want something that mimics as much as possible a desktop pc in terms of screen size, as they assume as Bitt said that they won't be walikng around much with those. But that's just me guessing.

Yes, my more realistic guesses concerning the $199 are:

* 7" SurfaceRT "Mini"
* SurfaceRT in basic cfg/packaging: no usb cord, no cover/keyboard, small SSD size, simple floppy plastic boxing, no manual, no cds, etc.
* SurfaceRT + some operator 2-year long contract.

Combination of the above.

Hahahaha- well to be fair I DO use a laptop for work and it is quite heavy duty and very powerful.

But at home I mostly just consume content, and for that the iPad is aces. If I was doing more stuff then I'd certainly need something more powerful, but it turns out most of my computing needs are consuming media (music, movies, books), surfing the web, email,and simple games. I guess I get my fill of heavy duty computing at work.

For work, I've got a Dell Precision T3500 with 3 20" widescreen monitors. For working from home (a couple of times a month), I've got a white-box Core 2 Quad with 2 22" monitors. For everything else, I've got my Nexus 7 and my Samsung Galaxy S3. I've not used my netbook for over a month, and my wife's got my 15" Samsung laptop.

From being anti-tablet (the £199 price talked me round to the Nexus 7), I've decided that you should just use the appropriate tool for the job, and I don't understand why people want a full-featured tablet at all. If you're that bothered about functionality and weight, get a MacBook Air or an Ultrabook.

And why not a Surface+cover/keyboard then? Light-weight+features is good, but only as long as screen+keyboard are permanently attached and you don't have real touch UI when you can benefit from it?

Because at $199, it's not going to be powerful enough.

I'd spend just as much, if not more, for a Surface Pro (x86) as I would for an Ultrabook or a MBA.
Just saying.

But I see what your point/assumption is.

Seeing as the Nexus 7 is selling at $199 at break-even, with a smaller screen and battery, the losses are likely to be significant; the cost of the glass and touch goes up at a rate worse than unit area increase.

Those BOM estimates were always hilariously low. Doesn't seem that any of the people in the teardown companies have ever tried making devices; things like the cost of the PCBs and flexes were always handwaved away when in fact they're serious parts of the device cost.

I've always assumed that was the case, good to hear it confirmed by someone who actually knows what he is talking about