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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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This, in a nutshell, explains the Surface's price
By Mint on 10/26/2012 12:15:44 AM , Rating: 1
They want to set a standard, not become the best seller via low margins and drive OEMs out of business. The Fire and Nexus 7 have basically made the Android tablet market not worth participating in anymore (not that it was all rosy before, but now it's suicidal) unless you're a company that's happy carving out a small niche.

As much as we want to think customers have been itching for high build quality, they will mostly still choose by price (aside from Apple fans), but at least MS can create a reasonably priced halo product to run Windows to show what's possible.

By TakinYourPoints on 10/26/2012 5:43:07 AM , Rating: 2
Except that its display and internal hardware are nowhere near an iPad at the same price. Hell, other Android tablets at the same price also have higher res screens. The Surface chassis and such are good but at that price it doesn't make sense compared to other $500 tablets.

I agree that it is a good thing that Microsoft isn't racing to the bottom with low margin tablets that cut corners, but unfortunately is isn't all the way there yet. It is not a value proposition, nor is it one for quality either, at least not until the beef up the specs. Maybe with the next version.

By NellyFromMA on 10/26/2012 12:44:15 PM , Rating: 2
Other than screen res, every single review that wasn't by an Apple of Android fan (yes I know, hard to beleive) said the screen is better in many ways and in general is quite comparable to the iPad. Saying its nowhere nead an iPad isn't really telling the truth.

Unless, you went hands on and came away with your own impression. If so, I'd be interested to hear.

By NellyFromMA on 10/26/2012 12:47:20 PM , Rating: 2
Er, I should add that indeed there are some points where the iPad display is better, but in general they are comparable overall to end users who know what to look for.

By dark matter on 10/26/2012 3:26:21 PM , Rating: 3
Yes, that's why the iPad mini has a worse resolution than the Nexus 7 at almost twice it's price.

Take your sock puppet account elsewhere.

By TakinYourPoints on 10/28/2012 4:35:50 AM , Rating: 2
I was talking about the iPad, not the iPad mini.

And yes, the iPad mini has a little lower pixel density than the Nexus 7, but the faster hardware and developer support more than make up for it. I don't much care either way, I prefer the larger tablets.

Again, you are so mad...

RE: This, in a nutshell, explains the Surface's price
By km4c on 10/28/2012 9:32:53 PM , Rating: 2
And how does the iPad mini have faster hardware than the Nexus 7?
iPad mini - Dual-core A5 processor at 1gz with 512 mgs ram.
Nexus 7 - NVIDIA Tegra 3 4-PLUS-1 quad-core processor with a 5th battery-saver core at 1.4 ghz and 1 gb ram.
Apple having the better developer support I will agree with, but it not that big a gap anymore. If you already have a iPhone or iPad, get the iPad mini because you already have the software. Anybody else should be getting the Nexus 7. The Nexus 7 will also have 32 gb flash for $249 vs 16 gb flash on the iPad mini for $329.

By TakinYourPoints on 10/29/2012 1:53:23 AM , Rating: 2
I should have been more clear since I took the GPU into account. You're right about CPU performance, there's a 10%-20% difference in Sunspider and BrowserMark performance. Taking the GPU into account there is over a 50% difference in performance.

As for there not being that a big gap in tablet apps, I disagree. A gap exists with phones, but it is manageable. Many popular apps are cross platform, and even when the equivalent version of something specific is lower quality than what is on iOS it can generally be found. The gap with tablets is more severe given that Andy Rubin has a fundamental disagreement with tablet and phone apps being two different things.

Rubin actively dislikes the idea of having tablet specific apps. The result of that policy combined with lower tablet hardware sales and lower profitability for developers is that many Android tablet apps are simply rescaled Android phone apps. There is a big difference between that and something that is designed and laid out specifically for a tablet.

Tablets are app machines, and when the vast majority of apps don't take advantage of that big screen I consider that a major problem, especially when it is the purposeful result of a misguided policy. The result is that there are numerous creative and content apps on the iPad that may not ever have an Android equivalent, not when there is so little incentive for developers to optimize.

As for price, I don't like it either way. I don't care for the iPad Mini, and other 7" tablets simply aren't for me due to their size and functional limitations, so I can't give a good opinion. A 10" iPad and a Kindle Paperwhite is a combo that works well for me.

RE: This, in a nutshell, explains the Surface's price
By Da W on 10/27/2012 11:34:37 PM , Rating: 2
You'll get a Surface pro with a core i5 ivy bridge Inside. How's that for internal hardware?

By TakinYourPoints on 10/28/2012 4:37:34 AM , Rating: 2
WinRT means little until it gets more applications. If I'm getting Ivy Bridge I'll just buy an actual laptop instead.

"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller

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