Microsoft Attacks Apple
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-06-19 07:09
by Karl Denninger
in Technology
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Microsoft Attacks Apple
 

Hmmm...now this is something to keep your eye on...

Microsoft Corp. (MSFT) unveiled its own Windows-powered tablet computer called Surface, altering its strategy of focusing on software and relying on partners to make the machines in a renewed attempt to take on Apple Inc. (AAPL)’s iPad.

The tablet has a 10.6-inch display and will run the new version of Microsoft’s operating system, Chief Executive OfficerSteve Ballmer said at an event yesterday at Milk Studios in Los Angeles. The device’s cover serves as a full keyboard with a track pad. Surface will be available later this year.

Oh oh.

Rumors are that the ARM-powered versions will also come with Office -- from the factory -- included in the price. 

The various tablet "solutions" have always suffered from the lack of a keyboard and zero expansion capability.  Surface solves both by having a USB port and a build-in keyboard -- albeit not a "full-stroke" one.  To get both it sacrifices little -- or nothing -- in form-factor.

For the corporate user who has been looking at the iPad as a "solution device" this ought to bring a full, hard stop here and now until Surface is released.  The commonality of Office and applications developed for the corporate world, along with bi-modal (touch-screen and keyboard/tracksurface) input addresses essentially all of the complaints that the "tablet" haters have had (myself included) along with being able to run existing Windows applications (at least for the Intel-based versions.)

Microsoft has a checkered past when it comes to hardware, including some spectacular flops (Zune anyone?) but when they get it right (e.g. Xbox) they sell a ****-ton of equipment.  Further, they have the inherent subsidy available that Apple does when bundling hardware and software into one offering.

Things just got a whole lot more interesting in the tablet space.  I've tried them all thus far -- from the Playbook to the Android devices to the iPad -- and I'm not all that impressed with any of them.  Playbook has the best browser (by far) and the iPad has the best application base (by far) with Android simply missing the mark in all regards -- many Android apps do not run properly in the larger form-factor and despite Google's protests the webkit browser just plain sucks as soon as you need to enter anything into a web page.  In addition despite all the oooohhhhhhs and ahhhhhs for the thin form factor I simply can't get away from the need for a keyboard in what I do, and while bluetooth offers a solution carrying two things destroys the argument for the tablet in the first place -- my Lenovo X220 is not much larger or heavier than the combination and it's one piece, not to mention that it has a monstrous amount of storage (500gb) in both SSD and rotating media, besides being able to read media cards and connect to USB devices.  Oh, and in addition it has a real processor with actual power -- so I can do real work on it too.

This is a development to watch.

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Ribbit
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I've been rather unimpressed with tablets as a concept for mobile computing, whoever makes them.

For me, the little 10.1" Asus Netbook I have, has even made a Smartphone redundant, because anything I 'needed' to do on a Smartphone, or would like to have done on a Smartphone (e.g. watching a film), is done so much better on a Netbook.

I haven't used Office on the Netbook (even though it would run it fine), because for me, MS Works (included with the Netbook) easily does everything I actually need.

Like you say Karl, big fast hard drive (500gb I fitted myself, and it was dirt cheap before the prices went up), plenty of ram (2gb of very fast DDR3 ram running 32bit XP), 3 USB ports, and an SD card reader/writer built in, along with a very nice keyboard and a drop dead gorgeous screen, ticks all the boxes. eta: Though to save wear and tear on the built in components, when not traveling, I use a USB keyboard and mouse, which are cheap and easily replaceable.

If they can price this right, I think MS will have a winner (for me it would have to be ballpark the price of the Asus Netbook, which over here was quite a bit less than half the price of an iPad at the time, and not far off a third).

Also hardware wise, MS have a pretty good track record with things like their keyboards, mice, and webcams, so they should be able to get this right hardware wise.

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Crzymorse
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Looks like they are trying to make the tablet into a laptop. Heres a hint, if you need to type alot, answer emails and travel get a laptop. The desktop is now a workstation/typewriter for the majority of americans. Tablets are entertainment devices and are for mainly personal use, i.e. reading the paper in bed again. Laptops are great for business travel. Iphones and Droids are awesome but the blackberry with a keyboard is still the best for business email. If Rimm just stuck with the keyboard they might see a rebound in business over the next couple years. Watch Apple come out with a business phone with a keyboard and snuff Rim out.
Christiangustafson
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Available this fall? Too little, too late.

Microsoft won't sell many of these if we are entering the collapse phase.

Maybe you can attach a number of Surface devices to a beam, and then to an ox, to plow the soil.

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Winstonsmith2009
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They will also have SD slots. Imagine that, standard industry interfaces instead of the artificially hobbled systems that Apple always spews. But the ARM version is basically an ultra-thin netbook with a multi-touch screen. Whether serious work can be done on that version depends on that non-tactile keyboard's usefulness. And the fact that Windows RT will not support running, emulating, or even porting existing x86/64 desktop applications eliminates any potential advantage of the the x86 software base.

Frankly, at least with the ARM version, I see them doing just as poorly as I believe they will with a Win8 phone IF that keyboards turns out to suck. If not, it would be a low-cost ultra-thin notebook replacement. And at least they may force Apple to include an SD card slot on the iPad.

With the x86 version, IF the price is right, they may do well in the ultra-thin notebook market since that machine will have the Windows software library advantage. But I don't see it taking over that sector. It just isn't revolutionary enough. And the current and near future economy won't help either.

And, BTW, every review I've read of Win8 slams it. For isntance, Dvorak did on Marketwatch:

http://www.tomshardware.com/news/Windows....

Excerpt:

John Dvorak from MarketWatch recently uploaded his review of the current Windows 8 Release Preview, calling the upcoming OS an "unmitigated disaster" that could possibly hurt the company and its future as an OS provider. While this opinion may sound a little harsh regarding an operating system still baking in the oven, many of his comments echo remarks made by other journalists in their hands-on reviews, past and present.

"The real problem is that it is both unusable and annoying," Dvorak writes. "It makes your teeth itch as you keep asking, 'Why are they doing this!?' First of all, the system-software product is mostly divorced from all the thought and trends developed by Windows over the years, as if to say that they were wrong the whole time, so let's try something altogether new. No business will tolerate this software, let me assure you. As a productivity tool, it is unusable."

Biscuitt
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I really like what I am seeing from Microsoft. I am confident that Microsoft will get this product right feature wise. The key thing in this though will be the price point for both tablets. If the higher end model is priced similarly to the ipad, i think it will sell, however if it is priced to compete against the Macbook Air, or even a little bit cheaper than the air, i have a hard time believing this will make a huge dent Apples market share
Poodlelover
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Karl makes good points about this being possibly superior to the iPad for the office. Our company is deploying some iPads (to sales reps mainly), and they are somewhat of a chore to work with considering most of our infrastructure is windows based.

For consumers I think the app store is a king on a very high hill. Unless MS comes up with a viable competitor to the many, many quality apps available for the iPad they'll never convince many consumers to get them.
Aliveh
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msft said they will price it similar to ipad.
Jotapay
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I'm pretty excited about this. Given how ridiculously easy it is to develop your own ASP.NET, C# applications with Visual Studio, developers will be able to create production-quality apps for a mobile platform for their customers in a matter of a few days.

With .NET you don't have to worry about all the quirky properties inherent to Android apps, like how it managed the events and state of the whole form/screen. The newest versions of Visual Studio (2010) are pretty slick. I've yet to try VS 2012, but developing a Metro app looks similar to standard ASP.NET development.
Winstonsmith2009
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"Unless MS comes up with a viable competitor to the many, many quality apps available for the iPad they'll never convince many consumers to get them."

And with Win8 RT for ARM, the OS in their new system that comes closest to being an iPad, their software base starts at whatever they and the SW developers working on it right now can come up with before release. The entire x86 Windows software base is N/A for that machine. Their main advantage is the number of programmers familiar with the various Windows IDEs. But now, for ARM devices, one has to choose between developing for Android, iOS, or Win8 RT. I have no idea how easy or hard it is to port between them.
Mezcal
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There's already a relatively large metro app marketplace for Win Phone 7, Winston.
How difficult it is to modify that existing code base to tablet resolutions I don't know.

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Mobi
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I actually have a tablet based on Windows 7 and let me tell you the pros and cons.

PROS:
1. It is a business machine because it runs Office.
2. It is expandable just like any other laptop PC.
3. It has superior user experience to a laptop because of the touch screen.

CONS:
1. Sluggish --> Windows 7
2. Short battery time --> Intel Atom + Windows 7 (and you can't replace the battery yourself, either)

If Microsoft can fix the CONS with this new release, I beleive it will attract business users. Potentially, it is a big market.

BTW, keyborad for Windows based tablet should never be an issue becuase you can always plug in USB lightweight keyboards (,which is what I do.)

Snowmizuh
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I have a x220 Tablet running Windows 7--12.5in, 1,366x768 IPS swivel screen. I have i7 Sandy Bridge, 8 GB of ram. The box rocks. I use it for development. Visual Studio + SQL Server + various VMs. No problem.

On battery, if I am running reduced performance (suitable for browsing/movie watching), I easily get 4-5hrs at about 70% brightness. By the way, I ran Ubuntu on this sucker and it was PITA to get it to run under 12W. All sorts of little hacks and tricks I had to google and try out.

@Mobi, I don't think your problem is Win 7 as much as it is Intel Atom.

The touch screen is very nice, but Chrome doesn't work optimally with gestures. IE does, but I don't like ie... Metro will be very nice for this type of stuff.

I can't wait for Surface! Very impressive. I wonder if it will have the horses to run Visual Studio?
Jeffrey_thomason
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Quote:
John Dvorak from MarketWatch recently uploaded his review of the current Windows 8 Release Preview, calling the upcoming OS an "unmitigated disaster"


I'm not convinced it's an unmitigated disaster on a tablet. I don't see Windows 7 going anywhere for desktops for a very long time...

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Mobi
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@Snowmizuh

Exactly, Chrome does not work too well here for the touch screen but IE works fine for me on my tablet. Mine is a 10in tablet looking like an Android so the battery is small (6-cell or 4-cell, not sure.)

BTW, in the end, we are talking about Windows 7 here. The success of Microsoft's next generation tablet will depend on Windows 8, not 7 though.

Jotapay
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Quote:
I wonder if it will have the horses to run Visual Studio?


At first, I was going to say "no". In my experience Visual Studio runs best on a quad core i5 or i7 CPU and SSD, even if the clock speed is a little low. How many cores does the Surface's Intel Core i5 have?
Lowbeyond
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Quote:
I don't see Windows 7 going anywhere for desktops for a very long time...

Default installation at a big corp where i contract for is Windows XP.

I have win7 on my home comp and see zero reason to upgrade.

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Winstonsmith2009
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"I'm not convinced it's an unmitigated disaster on a tablet. I don't see Windows 7 going anywhere for desktops for a very long time..."

And that reveals another major potential weakness in their strategy. They want Win8 on many desktops so that a large number Win8-specific apps will be developed that can also run on their x86 Win 8 notebook/tablet since they want to evolve from desktop to desktop/mobile. If that doesn't happen, and I don't think it will, their x86 Win8 notebook/tablet won't have that big software base advantage, at least with software designed for mobile use. The large library of existing x86 WinX software will still run on their x86 Win8 notebook/tablet and can be ported to take "advantage" of the Win8 interface, whatever advantage that might be, but in the end what's the huge advantage of their new hardware over the large number of "ultrabooks" that will be showing up. And the ported legacy x86 WinX software may not lend itself very well to the multi-touch interface paradigm of the x86 Win8 on the new notebook/tablet.

For their Win8 RT netbook/tablet, there is absolutely no existing software base advantage. It will have nothing other than what Microsoft and developers can come up with prior to hardware release. All x86 WinX software is completely incompatible with RT.

I think the only potential major impact Microsoft can have here is if the non-tactile keyboard on their ARM machine can be used for productivity in which case they'll have an inexpensive, ultra-light and thin machine that will have huge enterprise popularity. But if that keyboard turns out to suck...
Risingcream
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The i5 version has a full 1080p screen and also has pen support. This will put a big dent in ultrabook sales as well as ipad sales. This by far looks like the best device coming soon.

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Degaston
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How about Visual Studio Express? See http://www.microsoft.com/visualstudio/en.... for details.

I got a laugh out of Poodlelover's post about the "app store". Go to codeplex, Source Forge, MSDN Gallery, or a plethora of websites where you can download apps (including source code, documentation, and have discussions/feedback with the developers/testers) and you'll see that for the sake of Apple product sales that their "app store" is a sales killer for themselves in the long run.

Full disclosure: I use Visual Studio 2010 Ultimate every day, and yes this includes configuring/supporting virtual environments in MTM with Visual Studio Lab Management, plus using architectural diagrams and test driven development to drive the applications' architecture. I also have it well-integrated with Project Server, SharePoint, and the System Center products for supporting the full end-to-end IT processes :)

Making it easy for small-time dev(s) to use freebie dev tools to quickly put out .NET apps will make this tablet take off (if the price is right). And why it'll take off is because people will see a path to going "big" from their smalltime tablet & mom/pop approach. You don't get that if you are pidgeon-holed by the Apple proprietary trap.

And nope I don't think this new Microsoft tablet will yet run a full end-to-end Lab Management environment (including Project Server, TFS, SharePoint, SSAS, SCVMM, Hyper-V, and a good SQL Server farm to house all the config/content databases of these application server products). That's why I still have to have a laptop. It's just so much a given now in the IT world (well at least those corners of the world that plan to be successful) that when you write software you start off with the regression testing and configuration/implementation plan in mind :) That's why I'm a big fan of using Visual Studio end-to-end. Using Excel/Project to manage tasks/dependencies and resources/scheduling in synchronization with all the other tools going against the same well-integrated databases (but with an extensible API to do things however needed) is a big deal. This is where Microsoft is quietly winning the war in technology right now. Look out.

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3/17/2013: Bullish on nothing - 100 percent in cash.
Degaston
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Winstonsmith2009, interesting analysis but you seem to have forgotten (or maybe just don't know) about the .NET framework direction that Microsoft embarked upon about 13 years ago which basically is addressing your points. For the pre-.NET apps its going to be a b**** to get them into Win8. But for .NET apps its pretty straightforward IF the application vendor knows what they're doing. I've been personally writing .NET apps almost every day for the past 11 years from the 1.0 alpha versions thru 1.0, 1.1, 2.0, 3.0, 3.5, 4.0, etc. and the various versions of the key dev tools and server products (i.e. SharePoint, SQL Server, Windows Server 2008 whose kernel isn't .NET but well on the track for getting there) and so forth.

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3/17/2013: Bullish on nothing - 100 percent in cash.

Reason: More .NET info
Publius
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I may actually give this a try. I've never cared for Apple and the iCraze and so never have even messed with a touch/tablet.

It's true that Win 8's Metro is crap for *desktop and laptop* and non-tablet. Trying to force that on the PC market will indeed be an unmitigated disaster. However, for a tablet, Win 8 may just work, but then again, I don't know nuttin bout no tablets.

I've been playing with the Win 8 previews, the developer preview, the consumer, and now the release preview. At some time I expected them to wise up and give you an option to return to the old start menu, but they haven't shown any sign of it. There are some 3rd party apps, such as "ViStart" that will give you a start menu replacement on the desktop, but you still have to fight Metro when it wants to pop up.

Other things I like and Win 8 would be good save for Metro. But again, that's for desktops and laptops. Tablets are different.
Uncleoxidant
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I guess I saw this more as a "hey, wait, don't forget about us!", "me too!, me too!" move from M$FT. Office on a pad isn't a big draw for me. Yeah, the keyboard helps but if I was going to be doing a lot of work with Office I'd want a laptop with a decent keyboard.

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Ckaminski
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If you want a clue as to how the "app store" works at the moment, have a look at the Angry Birds Space debacle - where Rovio announced they weren't porting it to WiMo7, and changed their tune 24 hours later. I wonder how big the bribe was from MSFT to affect that change.
Nohype
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I wouldn't know code if I tripped over it.

So, I'm at the mercy of these sorts of solutions because I need robust applications, including Word's user-unfriendly desktop publishing capabilities, Excel's data analysis/graph generation, and their seamless integration with Powerpoint.

I've used everything from an Amiga (remember those?) to a high-end Dell Latitude (stolen - still miss it) and now a MacBook Pro with Windows7 loaded as a virtual machine. I use the Office suite on both sides (Mac 2011 and Windows 2007). I'm forced to use Google docs once in a while (geographically dispersed teams/clients), and can't wait to get away from it.

I switched from a Blackberry Worldphone to a Droid because I couldn't do a quick Google search on the BB (the operative term being "quick"). I've learned to "type" just as fast using Swype as I ever did on the BB keyboard (then again, I have fat clumsy thumbs).

I use Kindle and Nook apps on both devices. I'm thinking seriously about a traditional Kindle just for the sheer pleasure of being able to stop and read a book in the daylight while out on a hike or camping.

The iPad and its ilk were of no interest to me. On my laptop, I need my true keyboard/trackpad.

Having said all that -- and knowing *nothing* (nor wanting to) about code, or all the acronyms and "geek speak" that developers use -- I will be seriously considering selling my Mac and migrating to this Microsoft device and using their cloud-based storage for my client-shared documents (home USB HD for family photos, taxes, etc.).

Why?

Because they've done this before and they're good at it. They were late to the party with WYSIWYG GUI's, desktop publishing (they killed Quark and PageMaker with incredibly substandard products), XBox, spreadsheets (remember Lotus 123 and PeachTree?), word processing (remember Word Perfect?), and enterprise solutions. They've been late to the game with almost everything. They even stole command line interface from whoever invented UNIX way back when. They did seem to carve the Powerpoint space from whole cloth, but I'm sure they stole that from someone else too. Yes, they failed at mobile. But why? Because they didn't understand the need for packaging consumer solutions into a hardware/software ecosystem as technology progressed in complexity. Thirty-something geeks don't typically understand that their customers no longer enjoy popping the hood. They just want to know when they need to bring it back to the dealer for service, and they want to upgrade every 2.5-3 years.

Microsoft is demonstrating that it gets it now. Have you tried Skydrive or Office 365? If not, you should. That's where it's going. Google pioneered it, Microsoft will own it. I realize that Gen and every other IT gearhead out there will never ever ever part with your hard drives. But customers don't want this. They simply don't know how to do all the small daily processes that keep your systems running smoothly. And they're willing to store their data on a server in Moses Lake in order to get that ecosystem functionality.

And, finally, there's price. Nobody will be able to compete with a keyboarded, ultra-light laptop with WindowsX and Office pre-loaded. Nobody. Hardware is now a commodity. Customers will be buying experience and utility. They will be buying a unit that does everything they need it to, and that can be disabled with a phone call if it's stolen -- and one that doesn't lose all their data if they drop it in the toilet (literally).

Companies will want this too. It allows them to issue a cheap piece of equipment to their employees and set it up as a true slave device. Whats a few hundred bucks added to the cost of a hire? It's an amount that can be easily charged back against even the lowest-paid employee's final paycheck in the event of an abrogation of contract.

I predict a winner here.
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