By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) ? The technology sector is known for many things, including plethoras of bad puns and clich?s to describe new and potentially innovative products.
So to get to the heart of the matter, whether Microsoft Corp. /quotes/zigman/20493/quotes/nls/msft MSFT +2.88% ?is borrowing liberally from others or seeding soil with its new tablet, what the company is doing now is just scratching the surface of a new market.
With the Surface, its first branded entry into the tablet sector, Microsoft is looking to make a splash in a crowded pool already dominated by Apple Inc. /quotes/zigman/68270/quotes/nls/aapl AAPL +0.28% and its iPad, and Google Inc. /quotes/zigman/93888/quotes/nls/goog GOOG +1.87% ?and the various devices that run on its Android operating system.
/quotes/zigman/20493/quotes/nls/msft MSFT 30.70, +0.86, +2.88%/quotes/zigman/68270/quotes/nls/aapl AAPL 587.41, +1.63, +0.28%
/quotes/zigman/93888/quotes/nls/goog GOOG 581.53, +10.68, +1.87%
?It is essential the tablet is properly marketed and shows its full potential if it has any hope of displacing Apple?s iPad in certain segments,? said David McQueen, principal analysts with Informa Telecoms & Media.
As if that weren?t enough of a challenge, Microsoft, in setting off alone with a tablet, is also going to be competing against partners such as Hewlett-Packard Co. /quotes/zigman/229301/quotes/nls/hpq HPQ -1.14% ?and Dell Inc. /quotes/zigman/27952/quotes/nls/dell DELL -1.93% , which have their own tablets in the works running Microsoft?s upcoming Windows 8 operating system.
Shaw Wu of Sterne Agee said the launch of the Surface shows a different side of Microsoft, one that could be for both good and ill. ?On the positive [side], Microsoft is being more proactive in addressing the mobile-device market where it has had little traction,? he wrote in a research note. ?On the negative, this will be cannibalistic [with] Windows partners.?
Of course, how much of rivals? business the Surface will eat won?t be known for several months. But it might be a case of better-the-devil-you-know for Microsoft?s partners ? which given their long history of running Windows on their devices, are expected to be loath to ditch it for Google?s Chrome OS or anything else.
Microsoft Surface tablet computerSome analysts say that Microsoft?s move may end up having a benefit, in that it could force partners to produce better tablets for their largely enterprise-based customers.
Rick Sherlund of Nomura Research said Microsoft will be collaborating with partners and encouraging them to ?prime the pump? around the upcoming Windows 8 launch, but those other parties ?will necessarily need to deliver competing solutions, and we think Microsoft has set a high bar for comparisons.?
At London-based Analysys Mason, principal analyst Ronan de Renesse said the Surface appears to be ?the best Windows-based mobile attempt so far,? and expects it to sell in decent numbers ?as long as it delivers its promises and is priced correctly.?
But de Renesse added that at the end of the day, the Surface is primarily a showcase for the Windows 8 operating system. Also, Microsoft won?t be able to sustain its mobile strategy if it keeps licensing Windows for the tablets of partners that are also rivals, he commented. ?The big question is if Surface becomes as successful as the iPad, will Microsoft choose to stop licensing Windows on tablets??
Microsoft borrows Apple's strategy
Microsoft is taking a page out of Apple's playbook with its first tablet computer. Ian Sherr reports.
The Surface comes as Microsoft has posted a mixed track record for its hardware efforts. Indeed, it?s done very well with peripherals like computer mice and keyboards, and the Xbox videogame console remains a hit with gamers. Yet the company also has failed to ignite and inspire, as seen with its Zune music player and the Kin smartphone.
So far, no single tablet has matched the success of the iPad. For Microsoft to pull away from the surface of the tablet market, it will have get many things right, and maybe break a few more rules along the way.
/quotes/zigman/20493/quotes/nls/msft
US : U.S.: Nasdaq
Volume: 75.25M
June 19, 2012 4:00p
Market Cap$250.68 billion
Rev. per Employee$811,589
/quotes/zigman/68270/quotes/nls/aapl US : U.S.: Nasdaq
Volume: 12.86M
June 19, 2012 4:00p
Market Cap$547.74 billion
/quotes/zigman/93888/quotes/nls/goog US : U.S.: Nasdaq
Volume: 2.07M
June 19, 2012 4:00p
Market Cap$186.76 billion
/quotes/zigman/229301/quotes/nls/hpq US : U.S.: NYSE
Volume: 21.57M
June 19, 2012 4:00p
Rev. per Employee$355,403
/quotes/zigman/27952/quotes/nls/dell US : U.S.: Nasdaq
Volume: 34.52M
June 19, 2012 4:00p
Rev. per Employee$562,240
Rex Crum is a reporter for MarketWatch in San Francisco.
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