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A Surface phone is rumored

Should we be preparing ourselves for a Surface phone?  

I. You Ready for a Surface Phone?

That's what Chris Green, principal technology analyst at Davies Murphy Group Europe, claimed to BBC News.  While he says that Microsoft Corp. (MSFT) may never pull the trigger and release the device, he explains, "Microsoft is hedging its bets.  The firm is heavily invested in Nokia succeeding with its Windows Phone handsets but can't allow for its failure to torpedo the platform.  At the very least Microsoft will be developing its own handset to go to market in case Nokia and others don't do better."

That's essentially what Microsoft did with Surface, a 10.6-inch Windows RT-powered tablet.  After watching its partners flounder in the tablet industry, thoroughly outsold by a savvy Apple, Inc. (AAPL), Microsoft sprang into action announcing its own first party hardware.

The results have been mixed.

While there was much initial enthusiasm, Microsoft faced tough questions about its hardware decisions and pricing (though to be fair Apple has seen its own recent hardware choices scrutinized).  And preliminary reviews were hot and cold, arguing the device was unbeatable by some metrics, but rather flawed by others.

Microsoft Surface phone
Microsoft hinted that a Surface Phone might be incoming. [Image Source: Softpedia]

But Microsoft CEO Steve Ballmer tells BBC News that his company won't shy away from trying to "set a new standard" in hardware markets where it sees its partners struggling.  He comments, "Is it fair to say we're going to do more hardware? Obviously we are... Where we see important opportunities to set a new standard, yeah we'll dive in."

"We have committed ourselves on a path where we will do whatever is required from both a hardware and a software innovation perspective and the cloud innovation perspective in order to propel the vision that we have."

II. Microsoft Entrance Scares Some Struggling OEMs

The promise of Microsoft "diving in" is alarming to some OEMs.  Taiwan's Acer, Inc. (TPE:2353"warned" Microsoft to reconsider the Surface tablet.  In an interview its CEO JT Wang commented, "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."

But Acer is not exactly the most self-assured PC maker out there.  Mr. Wang described the build quality of his company's own products last year as "cheap", bemoaning how "unprofitable" his firm was.

More confident firms seem less worried about Surface phones or tablets.

Dell headquarters
Dell says it's fine with Microsoft making its own tablet. [Image Source: TMG Buzz]

Dell, Inc. (DELL) VP Kirk Schell views the Surfaces as an opportunity to introduce customers to the promise of Windows 8, which will in turn drive his company's sales.  He remarks, "The announcement of Surface was necessary to have a proof of concept and to get people excited about what was coming to push application development and create some buzz out there. They've invested so much in Windows 8 it was important to make it work, so I felt Surface was the logical thing to do."

III. Nokia on Surface Phone: "Great!"

When asked about the prospect of a surface phone, former Microsoft Canada executive Stephen Elop -- now the CEO of Nokia Oyj. (HEX:NOK1V) -- offered praise for the idea.  He commented, "[It would be] a stimulant to the ecosystem."

It's possible Microsoft could partner with a third party to produce its vision in the form of Microsoft-branded hardware; if so Nokia would likely be a leading candidate.  That's the approach Google Inc. (GOOG) -- like Microsoft, a software company at its roots -- used to promote Android tablets/smartphones, via its Google-branded "Nexus" devices.

But it's possible that Microsoft will simply design the devices on its own.  As it has shown with the Surface tablet and the Xbox/Xbox 360, Microsoft has evolved into a company thoroughly capable of producing its own intriguing third party hardware.

Microsoft isn't looking to leave its treasured OEM partners behind.  In fact much of its own Surface tablet launch event was dedicated to promoting its OEM's Windows 8 designs, designs which are technically rival's of the event's star attraction.  Talking about Windows 8 and Surface Mr. Ballmer stated, "This is one of two or three big moments in Microsoft's history."

Steve Ballmer
Steve Ballmer called the launch of Windows 8/Surface a top moment in Microsoft's history. [Image Source: Getty Images]

Big indeed, but Microsoft isn't looking to usurp its partner OEMs quite yet, although it's clearly unafraid to give them a friendly push.

Sources: BBC News, Nokia [Surface Phone discussion]

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Microsoft Hardware
By EglsFly on 10/25/2012 8:57:07 PM , Rating: -1
The estimated failure rate of Microsofts other hardware, the XBOX 360, was 33%.

Yea, I think I will pass, I don't want that in my next tablet or phone...

RE: Microsoft Hardware
By FITCamaro on 10/25/2012 9:57:02 PM , Rating: 2
Yet I'm sure you have no issue with Apple hardware using the user as a heatsink.

RE: Microsoft Hardware
By Insurgence on 10/26/2012 6:29:58 PM , Rating: 2
Hey, it's called birth control. Let it rest in your lap, reduce your sperm count, and there you go.

RE: Microsoft Hardware
By StevoLincolnite on 10/25/2012 10:15:33 PM , Rating: 2
The failure rate was for the launch consoles, the Slims are far more reliable, also Microsoft never gave official numbers on the actual failure rate, it could have been half that or double that.

Also, Microsoft paid for the failure rate in terms of Billions of dollars and bad publicity, no company wants to have to deal with that money loosing exercise.

RE: Microsoft Hardware
By TakinYourPoints on 10/25/2012 10:42:53 PM , Rating: 2
Failure rate for launch consoles was much higher than 33%. It was 33% over the lifespan of the product, brought down over the long term because they finally fixed the issues years later. Any of the earlier models had over a 50% chance of failing within the extended warranty period, that is unusually high for any piece of consumer electronics. I myself had two 360s fail. One or two is pretty standard among people I know. A friend of mine had six fail.

It does make a good source of income for the indie game store by me, they still make money repairing RROD 360s (piles of them in the back).

That said, Microsoft's failure with XBox reliability certainly won't carry over to their tablets, phones, and whatever else they decide to make. The Zune HD was a solid device, as are other products they make. It is a huge stretch to say that because the XBox was super faulty, that it will carry over to their other products.

RE: Microsoft Hardware
By lostdummy on 10/26/2012 9:31:50 AM , Rating: 2

Initial fail as reported by MS was 3-5% (i doubt this is accurate though, too low)
Unofficial fail rate for INITIAL xbox 360 version was reported at 30% (by anonymous 'inside source' , so I doubt accuracy of this also, too high)
Public info by 3rd party, for mid 2007 fail rate was estimated at 16% (this one is more believable, and also initial models of xbox were sold by mid 2007)
Estimate also from 3rd party for 2009 version was 4%.
I can only assume later models had even lower fail rate.

Even if 30% fail rate was true for initial version, only 12M units were sold by mid 2007. And about 68M units were sold total by now. So average fail rate would be under 10% over 7 years.

With more believable 16% fail rate for early systems and 4% for later, average fail rate would be just 6% .

RE: Microsoft Hardware
By NellyFromMA on 10/26/2012 12:34:03 PM , Rating: 2
Facts are not welcome. Please stick to conjecture ;)

RE: Microsoft Hardware
By TakinYourPoints on 10/26/2012 5:45:33 PM , Rating: 2
Pick and choose from your survey of choice and they'll have wildly different results.

Microsoft's rate of 3%-5% clearly cannot be trusted.

A 2010 survey I read of 500000 people (quite a big sample size) put failure rate at 42%. Clearly the bulk of failures were from the first couple years and the rate reduced as time went on, but it cannot be overstated how faulty the 360 was over the first several years.

The same survey put PS3 failure at 8% and Wii failure at 1%.

Also, 3%-5% is on the high end of standard failure rates for a piece of consumer electronics, yet you don't hear anything on the epidemic scale of 360 failure among things like smartphones or hard drives (not counting the old IBM DeathStar, which WAS very high at about 30%-40%, or OCZ Vertex 2 SSDs at around 10%), and all of those things have high end failure/return rates of about that much.

To believe that it is at only 6% when so much evidence through both independent research and anecdotal evidence says otherwise is strange.

RE: Microsoft Hardware
By TakinYourPoints on 10/26/2012 5:56:23 PM , Rating: 2
And to be clear because this thread has been so derailed, I think worrying about the quality of the Surface because of the XBox is ridiculous. There is no reason to think that XBox levels of hardware failure is going to affect the Surface. They learned their lesson, plus there is plenty of other MS hardware that has worked fine for years (Zune HD, etc)

RE: Microsoft Hardware
By dark matter on 10/26/2012 3:27:23 PM , Rating: 2
You don't run an Indie game store.

You're actually comic book guy from the Simpsons.

RE: Microsoft Hardware
By TakinYourPoints on 10/26/2012 5:31:01 PM , Rating: 2
Nope, I just shop at one.

It is hilarious how mad you are btw

RE: Microsoft Hardware
By Cheesew1z69 on 10/27/2012 8:34:29 PM , Rating: 1
Because you have some special ability to tell people are mad by the posts...


RE: Microsoft Hardware
By Arsynic on 10/26/2012 9:21:52 AM , Rating: 2
The estimated failure rate of Microsofts other hardware, the XBOX 360, was 33%.

You act like the Xbox 360 is Microsoft's first console or hardware device. What was the failure rate of the original Xbox?

The RROD was an unfortunate incident due to using lead-free solder on the original motherboards. When the temperature of the motherboard got hot enough, the joints failed and the GPU came unseated. MS mitigated this on refurbs by using an X clamp heatsink to keep the chip seated.

How many Playstation consoles had to be turned upside down just to read the disks?

RE: Microsoft Hardware
By kleinma on 10/26/2012 12:08:16 PM , Rating: 4
You are a friggin moron. The original xbox 360 was designed in 2003, 10 years ago. I would much rather buy a product from a company who had a hardware issue, and owned it by extending the warranty, cutting checks for people who paid for repairs, and revamped the product to fix the issue, than the company who hasn't had that happen to them yet. Or worse the company that blames the problem on you (aka Apple). The xbox 360 RROD was something MS learned a few things from.

RE: Microsoft Hardware
By Argon18 on 10/26/2012 12:31:26 PM , Rating: 1
You don't understand hardware or this market. Microsoft screwed a lot of people with their shoddy XBOX build quality and overheating issues. A lot of people. Apple at least stands behind their hardware. I won't buy an Apple product, but I know folks who do, and they've all received spectacular hardware support, up to and including free replacement of the product with a newer better model, even after the warranty has expired. I've never seen a company take such good care of its hardware customers as Apple.

RE: Microsoft Hardware
By NellyFromMA on 10/26/2012 12:35:57 PM , Rating: 2
Microsoft replaced my xbox because it scratched my disc when I accidently moved it.

They didn't screw me over for something that was likely my fault. So, who are you even advocating for? I know of no one that was denied repairs unless they were at fault and even when I was at fault they replaced it free anyways.

RE: Microsoft Hardware
By Argon18 on 10/27/2012 9:40:25 AM , Rating: 2
What makes you think I'm advocating?

I'm saying Microsoft is a greedy corporate machine who screws the consumer, by locking them into a closed proprietary ecosystem.

I'm also saying Apple is a greedy corporate machine who screws the consumer, by locking them into a closed proprietary ecosystem.

But from a hardware support perspective, at least from what I've witnessed, Apple takes their hardware customers a lot more seriously than Microsoft does, and really bends over backwards to make them happy. Neither will get a dime from me however.

RE: Microsoft Hardware
By NellyFromMA on 10/26/2012 12:31:37 PM , Rating: 2
Cool story, I'm sure after all this time they haven't learned ANYTHING at all, right?

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