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Windows tablet maker Acer (whose Iconia W500 tablet is pictured here, running Windows 7) is unhappy with Microsoft about mandatory hardware requirements for Windows 8 tablets.  (Source: Laptop)

Microsoft has long spelled out supported chipsets and hardware with Windows, but partners are afraid the company will spell out stricter requirements for tablets, a la Windows Phone 7. Windows Phone 7 handsets require an ARMv7 CPU or better, like the NVIDIA Tegra (+chipset) shown here.  (Source: Ubergizmo)
Careful requirements will ensure better experience, but may cut selection

Microsoft Corp. (MSFT) must be thinking "Here we go again!" as it braces itself for another round of criticism from customers and partners over the hardware requirements it plans to impose with Windows 8.  This time around, the noisiest voices don't appear to be on the laptop/desktop side, but rather seem to be coming from the tablet community.

I.  Hardware Restrictions?  What Restrictions?

Judging by the broad selection of Windows 7 notebooks and desktops versus competitors like Apple, it sure doesn't appear at first blush like Microsoft is very picky with what its partners can make.  But in an effort to avoid the compatibility issues that afflicted Vista, Microsoft did indeed impose certain clear limits on what chipsets it deemed "compatible" with Windows 7.  

Similar limits were opposed on Vista, but they proved too loose, and performance suffered on budget machines.

With Windows 7, some of these requirements were relaxed slightly for netbooks and small notebooks, but in other cases Microsoft firmly stood its ground.  Windows 7 was a modern operating system and required hardware partners to provide modern components.

With Windows Phone 7, Microsoft took an even stricter approach.  Hardware partners had to deliver devices with an ARMv7 or better CPU, at least 256 MB of RAM, 8 GB of Flash, a 800x480 pixel screen, Multi-touch, an FM Tuner, Wi-Fi, GPS, and a 5 MP camera with LED flash.  Hardware partners could surpass these requirements -- but they had to at least meet them to get licensed.

The new frontier with Windows 8 is tablets.  And with that frontier, are coming new restrictions, according to Microsoft.  Microsoft announced to hardware partners to expect incoming restrictions, sometime over the course of the next few months.

The critical question is what those restrictions are.  Some speculate Microsoft may merely opt for a Windows 7 approach, telling tablet makers what chipsets it plans to support.  Others worry that Microsoft may go in the direction of Windows Phone 7, explicitly spelling out the exact hardware check list that partners must meet.

II. Hardware Partners are Upset

New Windows Phone 7 handset maker Acer Inc. (TPE:2353) was among the tablet makers to voice frustration at the planned restrictions for Windows 8.

At Computex 2011 in Acer's home nation of Taiwan, Chairman and Chief Executive Officer J.T. Wang commented to Bloomberg, "They’re really controlling the whole thing, the whole process. [Hardware partners] all feel it’s very troublesome."

Mr. Wang did not choose to name any other component manufacturers or tablet makers who expressed similar, thoughts, but his comments clearly indicate that he's talk to other hardware partners and heard similar frustrations.  

The comments are significant coming from Acer, the world's third largest computer manufacturer in 2010.  Acer has seen sales slump recently, but hopes to improve its fortunes with a pair of tablets -- the Android Honeycomb (3.0) A500, priced at $450 USD and packing a Tegra SoC from NVIDIA Corp. (NVDA) and the Windows 7 W500, priced at $550 USD and packing a Fusion processor from Advanced Micro Devices, Inc. (AMD).

Acer plans to release more tablets in the near future, including, potentially, designs powered by Intel Corp.'s (INTC) Atom processor.

Jefferies Group Inc. predicts that this year 70 million tablets will be sold, up from 18 million in 2010.  The firm predicts that 2012 will see sales of 158 million units globally.  

At the same time third parties like Google Inc. (GOOG), makers of the Android operating system, and Microsoft are expected to cut into Apple, Inc.'s (AAPL) industry-leading market share.  Apple controlled about 90 percent of the market in 2010 with its iPad.  That total is expected to drop to about 64 percent by the end of this year, and 41 percent by 2012.

III. Light at the End of the Tunnel?

Microsoft is delivering its keynote at Computex this week.  Windows Vice President Steve Guggenheimer is expected to be one of the key speakers.  At the consecutive All Things D conference in Rancho Palos Verdes, Calif. this week, Windows President Steven Sinofsky is expected to give a presentation as well.

The hope among Acer and other vendors is that Microsoft will at least give the courtesy of laying out a clear set of requirements at the conference.  For better or worse hardware partners -- and customers -- will then have an idea of what they're dealing with.

However, if Microsoft is too strict with its tablet requirements, it may see customers defect to the more liberal Android, which is happy to cater to both high end and low-end hardware.

Windows 8 is Microsoft's first operating system to be designed specifically with tablets in mind.  It's correspondingly the first Windows OS to support ARM CPUs.  Licensed by ARM Holdings plc (ARMH), power-savvy ARM CPUs have dominated the tablet and smart phone scene, grossly outselling designs from Intel and AMD.

According to Microsoft CEO Steve Ballmer, the title of the new OS is indeed Windows 8 and it will launch next year.  A public beta is expected late this year, or early next year.





"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation













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