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Richard Shim, senior analyst or the PC group at DisplaySearch, a Santa Clara, Calif.-based display analyst, wrote in a Wednesday research report that Microsoft unveiled its Surface tablet PCs in a way that was "out of character" for a company known for creating the operating system and software, but leaving the hardware to its partners.
"Microsoft’s move emphasizes a change in the PC industry highlighting tighter integration between software and hardware," Shim wrote. "Apple is the most noteworthy example of the value of controlling the hardware and software, as well as some services. Microsoft has joined a short but growing list of companies complementing their traditional businesses: Google with Motorola Mobility, HP with Palm and its WebOS. The rate of success for these companies so far has been modest."
Ken Hyers, Ezra Gottheil, and Beau Skonieczny, analysts at Technology Business Research (TBR), a Hampton, N.H.-based analyst firm focusing on IT, telecom and professional services businesses, wrote in a research report that Microsoft is making the Surface tablet PC because the vendor is "dissatisfied with its OEM partners" because of their "tepid" reaction to Microsoft’s plans.
"That response is not very surprising since most of them saw their own high‐priced tablets fail in the marketplace and they’re in low‐margin businesses," TBR wrote. "Microsoft is stealing a page from Apple by fully integrating OS and hardware development in‐house. By doing this, it controls every part of development, from OS to hardware, and makes an elegant piece of hardware that isn’t ruined by an OEM that decides to substitute cheaper components -- cheapening the feel of the entire product."
Microsoft’s approach also echoes that of Google in that Microsoft, by developing the Surface tablet itself, is showing OEMs how a Windows 8 tablet should look and feel, TBR wrote.
"Microsoft claims Surface is intended to 'jump start' the Windows 8 tablet market," the analysts wrote. "This will reassure OEMs that Microsoft wants to keep them viable in the critical tablet market. TBR believes this is accurate. Microsoft will price its Surface devices high enough to allow OEMs to compete profitably. However, once Microsoft is in the market as a hardware vendor it will stay in the market, if only to maintain strong relationships with its ultimate customers -- IT departments."
NEXT: Pricing, Functionality To Determine Surface’s Success
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