Print 27 comment(s) - last by robinthakur.. on Aug 8 at 6:12 AM

By outcompeting its partners, Microsoft is endangering them

"[O]ur Surface devices will compete with products made by our OEM partners, which may affect their commitment to our platform," writes Microsoft Corp. (MSFT) on the fourteenth page of its annual report filed with the U.S. Securities and Exchange Commission.

As noted by The New York Times, the quote represents Microsoft's most forthright comment regarding the fact that the media and public has largely perceived Microsoft's first-party Windows 8 tablet as superior to rival designs from OEM partners.

Microsoft CEO Steve Ballmer says that 10.6-inch Surface tablet is merely "priming the pump" for OEM partners' Windows 8 tablets.  But his filing indicates clearly that he and his company are aware that OEMs may be damaged by their inability to compete with his slick tablet offering.

There's some risk to Microsoft from this approach.  Competing with a customer ruined the relationship of Samsung Electronics Comp., Ltd. (KSC:005930) with Apple, Inc. (AAPL) and likewise Google, Inc. (GOOG) with Apple.  

"Surface" may prove poison to Microsoft's own. [Image Source: Microsoft]

However, not competing is ultimately an even more risky choice.  After all, it's hard to argue that Google is worst off for owning the world's most-used smartphone platform, despite the headaches that decision earned for it.

Likewise, if Surface does well it may create some headaches regarding OEM relations, but it would also be a boon to Microsoft's empire of holdings.

Source: SEC

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They had to
By B3an on 7/27/2012 6:22:11 PM , Rating: 5
I don't think MS had a choice but to make their own tablet. Time and time again the OEM's have proven incapable on making quality, well designed, well functioning tablets with attention to detail. Theres no polish, they just pump this stuff out.

Surface will likely the first tablet i get, partly because the OS will actually make a tablet useful, with the touch cover it can even replace my laptop.

RE: They had to
By ChronoReverse on 7/27/2012 7:02:13 PM , Rating: 3
Google pretty much learnt the same lesson as shown by the Nexus 7. A lot of the manufacturers just don't understand that putting out weak products is going to be noticed and will result in weak sales.

RE: They had to
By Mk4ever on 7/27/2012 7:13:23 PM , Rating: 2
True, but as far as I know, Google's device is meant for developers, but lacks some features that many people deem necessary, such as capacity (limited to 16GB), or memory card slot, or a decent camera, etc.

So in my opinion, their devices are meant to encourage developers, but lack features intentionally to prevent true competition with the OEMs.

Is Microsoft doing the same?

RE: They had to
By augiem on 7/27/2012 7:38:02 PM , Rating: 2
Google's device isn't meant for developers. It's meant to push content consumption through Google Play. They're playing a different game than Apple right now. Apple's making all their money on hardware with meager revenue from media. Google, like Amazon, are betting long term. They probably hope they can get people hooked into their universe of services for life, so they're not trying to make money off the hardware at the moment. Even though current spending on these devices is beans compared to the dough Apple's raking in through hardware sales, eventually the future will probably be much more device agnostic and accessing your "stuff" will be possible through any device you happen to be nearby -- a kiosk/atm, glasses, your car, your phone/tablet, your microwave, a window/billboard at a shopping mall, a mirror in the bathroom, your shopping cart, a neural link, etc, etc. At that point, hardware sales will cease to be important because people will be able to connect to their profile from anywhere. Whoever is providing the service that keeps track of your personal profile and lets you do what you want from all these portals will be the king. Google is probably betting on that future.

RE: They had to
By augiem on 7/27/2012 7:39:44 PM , Rating: 3
I neglected to make the point that the limited local storage is just a way to get you dependent on Google's cloud offerings. It's baby steps toward that future when everything around you is just a dumb terminal for your online profile.

RE: They had to
By TheJian on 7/29/2012 2:43:05 PM , Rating: 2
It also serves to drive down one of apple's cash cows :) If you can make ipod/ipad/iphone commodity items, you're left competing with google on their own turf.

SEARCH. Nicely done google :)

At the same time of course, they end up with a ton of ways to get you to use that search. If you couple that with Gbit internet (up and down) I think they'll win hands down unless others get their own pipe. I agree, google/amazon are looking further out for success rather than today. As long as they lose nothing on the device, google can continue to marginalize apple sales into oblivion (much like MS IE vs. Netscape). Once google has serious gaming going (tegra3/4/5 etc) on a billion devices, devs will have to take notice also in a serious way. Consoles are already looking like their going to be on their way out with the next rev. Ouya is no doubt going to help tegra-nvidia/google in this area (and perhaps all android devices in the end). Many more are on the way as we see with Vizio Co-star doubling it's remote as a gamepad. It sold out in 12 hours and makes ANY HDMI TV google tv of sorts. A touch of gaming and chrome as a browser (with it or not) makes it a fairly attractive item. Any android phone with gamepad support and hdmi out (I'd say this will be norm shortly as all socs will be decent gamers next year compared to today's xbox360/ps3 etc) will continue to make handheld purchases questionable to parents.

The writing is on the wall...This is also the only way android (or any other) can hope to attack the stranglehold Microsoft has on gaming with DirectX. You have to get them written for your platform rather than DirectX to get anywhere.

RE: They had to
By robinthakur on 8/8/2012 6:12:34 AM , Rating: 2
Google are not quite there yet on making their device suitable for content creation though, due to a distinct lack apps. Apple very nearly is (with a bluetooth keyboard, alot of execs where I work are happy to use their iPad in place of their thin clients for the majority of purposes and it plays nicely with Exchange, SharePoint, Lync etc) hence the Nexus 7 is for Consumption only. MS look to be in a good position with their Surface, and assuming it sells ok and doesn't violate Apple's patents on powered, attached keyboards (and doesn't split the market with the two confusing and largely incompatible RT and regular types) then things will get interesting in the tablet space. Google strategy depends on volume of sales though. For this to happen, you need one model to be on the market for a while, and to be seen as the standard for COnsucmers to go to (Apple's strategy) which typically doesn't happen with Android devices, unless the other manufacturers of Android tablets just give up at this point. For the volume they sell, it hardly seems worth the investment.

RE: They had to
By althaz on 7/27/2012 7:39:21 PM , Rating: 2
That's utter crap. Google's device is lacking those features because they couldn't afford to put them in. Google don't make any money from the Nexus 7 directly, it just stops more people buying other tablets.

Microsoft is building a higher end tablet, because their OEMs refuse to do so.

Google built a cheap tablet that's not crap, because their OEMs refused to do so.

RE: They had to
By Cheesew1z69 on 7/27/2012 7:52:12 PM , Rating: 4
Asus built it

RE: They had to
By augiem on 7/27/2012 7:29:45 PM , Rating: 2
No only that but Apple for the past 5 years is proof that selling premium priced hardware can be an excellent revenue and profit source. Hardware sales makes up the vast majority of Apple's income according to their reports. If it weren't for their excessively priced hardware, they'd have never surpassed Microsoft. The trick they managed that nobody else could was to convince their customers to trash their $600-$800 phones/tablets every year to buy yet another one. We'll see if they can keep it up, but for now, they're king because of it. Of course MS wants some of that pie! Mmmm... its lemon meringue!

RE: They had to
By TakinYourPoints on 7/27/12, Rating: 0
RE: They had to
By Cheesew1z69 on 7/27/2012 8:04:27 PM , Rating: 2
And yet, Apple is sold at Best Buy...

RE: They had to
By TakinYourPoints on 7/27/12, Rating: 0
RE: They had to
By Reclaimer77 on 7/29/12, Rating: 0
good for MS
By Strk on 7/27/2012 7:17:15 PM , Rating: 2
MS makes some pretty nice hardware. I think it's about time they took matters into their own hands. Their OEMs can be hurt all they want, but if they are making crap, who's fault is it?

RE: good for MS
By TakinYourPoints on 7/27/2012 8:05:48 PM , Rating: 2
I agree. This is a huge reason why I've assembled my own PCs for over fifteen years, most hardware companies are trash. Lenovo and Apple are the only companies I trust to make something decent these days.

Let the OEMs cry over the Surface, its their own fault for racing to the bottom at the expense of quality and customer service.

RE: good for MS
By StevoLincolnite on 7/28/2012 1:03:05 AM , Rating: 2
Asus and Dell make some good stuff too.
Dell for it's IPS monitors and Asus for the Transformer and the EeePC which were both innovative on release.

RE: good for MS
By TakinYourPoints on 7/28/2012 3:36:31 AM , Rating: 2
Dell makes very good high end monitors, absolutely. Its the mid and low end products that make up the bulk of their consumer sales I have problems with.

RE: good for MS
By Reclaimer77 on 7/28/12, Rating: 0
RE: good for MS
By TakinYourPoints on 7/28/2012 9:22:32 PM , Rating: 3
I know you want to polarize things just to make a strawman argument, but things aren't nearly as black and white as you'd like.

I've praised Lenovo notebooks numerous times, and I also like MSI's gaming laptops if portability isn't a concern. In this very thread you ignore my post where I say that Dell makes great monitors. My own PC is made from Corsair, Crucial, and EVGA components, and my monitors are Apple and NEC.

I've slowed down talking about Android because JB addresses many of the issues I've had with it. Why would I continue to complain about problems that are being addressed?

Unlike some people here who are in denial, I know my complaints are correct and Google is actively trying to fix them. There are still problems with fragmented OSes, hardware, and marketplaces, all of which lead to an inferior app library, but I believe that Google will make measures to fix that as well. They know that they can't play second fiddle to the iOS ecosystem despite having a larger piece of the smartphone market. There's also the lack of upgrades for most hardware, still a major problem, especially given that Samsung is among the worst offender and they're #1 right now. ICS is only on 10% of Android devices despite the fact that a lot of it is capable of running it, and the numbers for JB are unfortunately going to be low as well.

It isn't trolling if its true, sorry to say. I build my own PCs and I have no real allegiance to a single ecosystem. I believe I make better informed complaints than Swash on one side and people like you and Motoman on the other.

At least it can't get banned!!!
By BigEdMan on 7/27/2012 9:32:05 PM , Rating: 3
[Apple attorneys see this device] It's black and rectangular
[Apple lawyers*] We can get it...
[Apple lawyers*] F&*#ing cross licensing agreements.... We can't ban it...

By nico.the.murph on 7/28/2012 2:06:04 PM , Rating: 2
You nailed it.

Hence the whisper campaign that MS is cannibalizing their own. Never mind that a rising tide lifts all boats.

The hinge
By flyingpants1 on 7/29/2012 6:34:19 AM , Rating: 2
The hinge/stand looks fragile, and you can't really use it in your lap.

The designs of the Transformer and Lenovo Yoga design seem much better.

RE: The hinge
By flyingpants1 on 7/29/2012 6:36:16 AM , Rating: 2

Not burned again
By mchentz on 7/27/2012 10:21:56 PM , Rating: 2
Look at how long it took for a OEM to make a decent windows phone. I think that Surface tablet is so Microsoft doesn't get burned again with counting on OEM's to release a decent W8 tablet.

Since Mick doesn't read his posts
By TheJian on 7/29/2012 2:27:30 PM , Rating: 1
Microsoft CEO Steve Ballmer says that 10.6-inch Surface tablet is merely

Missing an "it's" perhaps?

"Google is worst off"
I'm pretty sure this should be worse off...A comparative rather than superlative. But one may be able to argue this...LOL. You are comparing them to themselves (before and after) rather than others, but a better grammar nazi than me should jump in here...ROFL.

"Likewise, if Surface"
if THE Surface? ;)

Heck even Firefox catches me not capping nazi...But they don't deserve a cap...LOL...And apparently Ballmer is only a word in, well..WORD (ok, all MS products I guess). Though I must admit I like Firefox's desire to change it to EMBALMER...ROFLMAO.

By TakinYourPoints on 7/29/2012 10:15:24 PM , Rating: 1
There there, it isn't nice to pick on retards

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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