By Tom Kaneshige
In an epic battle shaping up between Microsoft and Apple, played out over a 10-inch touchscreen, one question rises above all others: Will Microsoft CEO Steve Ballmer put to bear enough resources and aggression to win this one?
For all his sound and fury on the stage, Ballmer often doesn't take the high-risk, high-reward chances necessary to become a star. If he assumes his conservative stance this time, Microsoft's newly announced Surface tablet will likely suffer the same fate as the lackluster Bing, Zune, Origami, Mira, Portable Media Center and, most devastatingly, Windows Phone.
"Ballmer has a tendency with money to underfund everything, taking a required launch budget and cutting it by two-thirds," says tech analyst Rob Enderle. "I am worried that he's going to repeat this mistake of being cheap, and being cheap won't get this done."
This week, Microsoft announced Surface, a Windows tablet with a 10.6-inch screen, that will come in a version running Windows RT and a business-oriented version running Windows 8 Pro. It will be a premium product likely cost compatible with the iPad and sold concierge-style at Microsoft retail stores starting in the fall.
Surface just may be Microsoft's defining moment-for good or ill.
Microsoft has already taken a huge risk with Surface by breaking from tradition and melding software and hardware. By getting into the hardware side of a product that competes with PCs, Microsoft alienates its PC partners. When AllThingsD's Ina Fried asked Ballmer how Microsoft's PC partners felt about the Surface, Ballmer responded, "No comment."
The risk to Microsoft cannot be understated.
"They clearly slapped the OEMs upside the head," Enderle says. "There's a good chance a number of these OEMs are going to leave the PC business. They're not going to buy software from someone that they're competing with. HP and Dell can follow IBM and exit."
Internal strife is bad enough, but Surface is also taking on the hottest tech gadget in the world. By the time the first Surface hits stores, the iPad will have had a two-and-a-half year head start. The iPad clearly holds the high ground with an awesome app ecosystem and millions of adoring fans from the consumer and business ranks.
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Surface, though, does have a key advantage.
Surface will come to market as a fully functioning productivity tool, which stands in stark contrast to the toy-like, media-consumption iPad. With Surface, you'll be able to get stuff done right away using a physical keyboard built into the cover and a kickstand to prop up the screen. More importantly, Surface wields the Excalibur of productivity apps: Microsoft Office.
"With Office alone, it could make the iPad look crippled," Enderle says.
But Office alone won't win the tablet wars; consumers will tally the final decision. Think I'm wrong? RIM tried to court the enterprise with PlayBook and that didn't turn out too well. In order for Microsoft to woo consumers, though, the company will have to embrace a no-holds-barred advertising campaign. Cute, aimless commercials such as the one with Bill Gates and Jerry Seinfeld won't cut it.
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