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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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RE: They had to
By Reclaimer77 on 7/29/2012 7:15:39 PM , Rating: 0
Why is everyone talking about the Surface like it's already the best thing to come out ever? Have YOU ever used one? I sure haven't. MS couldn't even demo one without the thing crashing. Well functioning? We'll have to wait and see on that.

As far as styling and design, sure, Surface has the looks. But I honestly prefer ANY version of Android to that vomit-kaleidoscope Metro UI. The built in keyboard is nice, but it's an obvious ripoff of the Asus Transformer Prime concept. Nothing new to see here.

The app situation for Microsoft mobile devices is still honestly pretty barren. Maybe a year from now, if Windows 8 takes off, Surface would be a good buy. But for now I wouldn't hold my breath on this thing getting off the ground and instantly being the best solution ever.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes

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