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Unable to compete, OEM bemoans Microsoft decision to step up

Like King Theoden of The Lord of the Rings, Microsoft Corp. (MSFT), old and gray, watched as Apple, Inc.’s (AAPL) tablets, which were increasingly cannibalizing users' screen time, imperiled its kingdom.  Like the king, Microsoft's advisors whispered false promises of security.  Any day now a successful Windows tablet would come out...

Except it didn't.  So Microsoft, at last awoken, took up the sword unveiling the Surface -- a slick Windows 8 tablet that shocked the tech world.

Now its finding that some of its former allies have taken its awakening quite badly.  Among those is Acer, Inc. (TPE:2353).

Acer played the role of Wormtongue to Microsoft's Theoden, ever lofting big promises in the tablet space, and ever falling behind Apple misstep by misstep.  Now the company hisses at its former ally for taking matters into its own hands.

Comments JT Wang, chairman and chief executive of Acer, in an interview with The Financial Times, "We have said [to Microsoft] think it over.  Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice."

Campbell Kan, Acer’s president for personal computer global operations, adds a not-so-subtle threat, suggesting, "If Microsoft … is going to do hardware business, what should we do? Should we still rely on Microsoft, or should we find other alternatives?"

Microsoft in regulatory filings has acknowledged that its OEMs may be hurt by Surface.  But the key thing to note is that the whole reason that Microsoft entered this face was because its partners failed, miserably, to compete against Apple.

Acer's sour grapes are perhaps a testament to the overall weakness of its tablet line.  J.T. Wang in Dec. 2011 called his company's product's "cheap" and "unprofitable".  Samsung Electronics Comp., Ltd. (KSC:005930) and others have outsold Acer in the emerging Android tablet market.

Even if Microsoft's Surface proves successful, volumes will likely remain relatively low, by Microsoft's own accounting.  Thus companies like Samsung who have promising Windows 8 tablet products should be fine.  

For companies like Acer, who lack viable tablet product of any flavor, there will likely be much bellyaching.  But at the end of the day they forced Microsoft to make this decision in the first place, and if they focused on creating viable products rather than making hollow threats, then they would have far less to worry about.

Source: Financial Times

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This entire article must be a troll
By CZroe on 8/7/2012 5:36:29 PM , Rating: 2
Seriously: How could Microsoft and DailyTech be comfortable with their explanation for Microsoft's actions and position? How can either imply that Acer and others have already failed to compete against the iPad and, thus, failed Microsoft, when Microsoft hasn't delivered on their end yet FOR Acer and others to prove themselves?

Without the Microsoft-provided tablet-oriented OS component Acer and others needed to compete, is Microsoft saying that this is punishment because because they should have already allied with a tablet OS competitor and gone on to compete well against Apple? Perhaps Microsoft is saying that Acer and others should have made their own tablet OS all on their own, accomplishing even what Microsoft has not yet done and done so sooner even while starting from scratch AND having to deliver on the hardware side. Pfft. If either of those things happened, why would they need Microsoft?! Also, wouldn't Microsoft be even MORE inclined to compete with them?

This explanation makes absolutely no sense. It is what it is: It's an excuse to burn their partners because they know they can do better or at least make more money. DailyTech should call them on it instead of repeatedly rubbing it in. I know that they are actually talking about *past* history with phones, tablet PCs, specialized laptops, etc, but Microsoft has always been a HUGE factor in those failing as well. In fact, aren't we counting our chickens before they hatch when in comes to Metro and Windows 8 on ARM?

RE: This entire article must be a troll
By Belard on 8/7/2012 7:40:12 PM , Rating: 2
But the key thing to note is that the whole reason that Microsoft entered this face was because its partners failed, miserably, to compete against Apple.

yeah, I guess everyone missed it when MS released WindowsTab 7, eh?

How could the hardware people compete against Apple or Android with $1200~1600 slates running Windows7. WP7 has sold horribly. Acer and the others need to start selling notebooks and desktops without WindowsOS.

By encia on 8/8/2012 11:05:51 AM , Rating: 2
ACER Iconia W500 tablet was sold at similar price as Apple iPad 2, but Windows 7 can't live without the keyboard/mouse. Windows 7 is not designed as a true tablet OS.

Atm,I have installed Android-x86 4.0 RC2 and Windows 8 PV. I rarely use Windows 7.

By encia on 8/8/2012 11:24:27 AM , Rating: 2
I didn't miss Windows 7 on Acer iconia W500. Windows 7 is just $hit as a tablet OS.

I have installed Android X86 4.0 RC2 on my Acer Iconia W500.

RE: This entire article must be a troll
By xti on 8/7/2012 9:53:52 PM , Rating: 2
why is MS in the wrong? they should share their ability?

its business. goal is to make the most money. You think MS cares that Acer isnt coming to their party next week or something?

By CZroe on 8/7/2012 10:18:24 PM , Rating: 2
I'm not saying they are wrong. I'm saying that DailyTech needs to call it like it is instead of taking what Microsoft says and rubbing it in Acer's face without questioning it despite the GLARING flaws in logic.

Obviously Acer thinks that they might care, hence the threat.

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